Why Invest In Blockchain Stocks
Making money trading blockchain stocks takes time and a lot of effort. But even with all the inherent risk associated with any type of investments, investing in blockchain stocks offers some advantages. Lets take a look at some of the advantages of blockchain technology.
We identified 4 reasons why you need to invest in blockchain stocks:
Exchange-traded trusts are trading for less than the cryptocurrency denominations theyre holding. Theres a catch. There may also be a release.
Should I Invest In Blockchain Assets
Blockchain investing should be considered speculative and is best for those with at least some prior investment experience.
Cryptocurrencies can be highly risk and volatile, so its best to avoid investing more than you can afford to lose.
While you could see your blockchain investments double, triple, or even 10x in value, they can also fall to zero. If you decide to invest in cryptocurrencies, do so with caution.
Where To Buy Blockchain Technology Stocks
Its always crucial for investors doing their own due diligence before investing in blockchain companies stock. Its also important to note that most pure-play blockchain stocks are traded on the OTC market. Now, where to buy blockchain stocks?
You can buy blockchain companies stock through online stock brokerage trading firms like:
- TD Ameritrade
- And any other stock trading broker you have an account
For many people, these are the most common to start looking to buy blockchain stocks. Alternatively, if you like the convenience of trading directly from your iPhone you can use the commission-free stock trading app, Robinhood.
The US-based stock and crypto trading App RobinHood allows for trading Bitcoin and crypto-related stocks without paying any fees.
Ready to learn how Robinhood works? Read our RobinHood App Trading Guide.
If youre trying to figure out how to buy blockchain stocks, here are the ins and outs:
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Recommended Reading: How To Buy Crypto Anonymously
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How It Works: Blockchain Explained
Using the bitcoin system as an example, heres how blockchain also known as distributed ledger technology works:
The purchase and sale of bitcoin is entered and transmitted to a network of powerful computers, known as nodes.
This network of thousands of nodes around the world vie to confirm the transaction using computer algorithms. This is known as bitcoin mining. The miner who first successfully completes a new block is rewarded with bitcoin for their work. These rewards are paid with a combination of newly minted bitcoin and network fees, which are passed on to the buyer and seller. The fees can rise or fall depending on the volume of transactions.
After the purchase is cryptographically confirmed, the sale is added to a block on the distributed ledger. The majority of the network must then confirm the sale.
The block is permanently chained to all previous blocks of bitcoin transactions, using a cryptographic fingerprint known as a hash, and the sale is processed.
The concept of blockchain technology first appeared in academic papers from 1982, in a dissertation discussing the design of a distributed computer system that can be established, maintained, and trusted by mutually suspicious groups. But it was a 2008 paper by the pseudonymous Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System that brought an academic theory into real-world use.
for new users after trading $100 or more within 30 days
Also Check: What Purpose Does Cryptocurrency Serve
High Risk: Invest In The Blockchain Itself
Believe it or not, there exists a way to invest in the blockchain itself.
It’s called staking. This involves purchasing from a list of cryptocurrencies and then lending that cryptocurrency back to the blockchain. The blockchain then uses your cryptocurrency to process new data. In exchange for your loan, you get a trickle of crypto right back around 5% APR not unlike a conventional loan.
Staking is the next generation of mining. It uses cryptocurrency not a wall of computer power to validate new transactions. But don’t let the steady 5% trick you into thinking it’s a low-risk investment. Despite steady gains, the crypto you pay $5,000 for today could be worth $3,000 tomorrow.
For more on how to safely invest in crypto, check out How to Invest in Cryptocurrency.
What Are Blockchain Etfs
Blockchain ETFs are thematic exchange-traded funds that own the stocks of companies that use or develop blockchain technology. They tend to invest in a wider variety of assets than Bitcoin ETFs or crypto ETFs, which focus more narrowly on tracking the price of individual cryptocurrencies.
While cryptocurrencies like Bitcoin and Ethereum are the most popular use for blockchain today, the technology offers the potential to serve a very wide range of applications that go well beyond crypto. Take Walmarts Canadian division, which used blockchain technology to create an automated system for managing invoices and payments for its logistics partners.
The ETFs listed above invest in hundreds of different companies. They can be broken down into a few broad categories:
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Why Are Blockchain And Crypto So Closely Related
Blockchain and crypto go hand in hand because crypto is the first authentic application of blockchain technology. Bitcoin, the original cryptocurrency, was born from blockchain. Today, every Bitcoin transaction gets registered on the ledger, which is what makes it a secure currency investment option. Blockchain is self-governing, which allows Bitcoin and other cryptocurrencies to remain decentralized. Today, we have dozens of cryptocurrencies and tokens, each operating on its own blockchain.
Payment Service Provider Stocks
One last option is to invest in payment providers. Big credit card or debit card providers such as Visa, Mastercard, or PayPal are offering crypto on their network. This helps more merchants accept crypto payments and giving buyers more choices. Modern cryptography makes it easy for service providers to accept crypto payments and more options always attract consumers to buy more.
Also Check: Which Crypto Exchange Should I Use
Blockchain Compatibility With Emerging Technologies
Modern technologies such as Artificial Intelligence, the Internet of Things, and immersive technologies will play a transformative role in human lives in the coming decade. When combined with the blockchain, these technologies will have a better value proposition. The compatibility of these emerging technologies will expand their areas of adoption. From an investment point of view, this synergy will provide low risk and high gain opportunities.
The Risks Associated With Blockchain Investments
To say that blockchain and crypto are risky investments is an understatement. Theyre extremely volatile and impossible to predict, for the same reasons that their upside is so high. The decentralized nature of blockchain makes it a unique asset.
The other chief issue with blockchain is that you cant invest directly in it. Instead, you have to invest in the companies developing it or the cryptocurrencies powered by it. This leaves you open to some of the risks inherent to those investment vehicles. There is no pure-play blockchain option.
From a crypto-specific standpoint, theres also regulation to worry about. Right now, Bitcoin and other cryptocurrencies arent heavily regulated as investments. That could change in the future. If it does, it might affect the trajectory of cryptos valuation or growth potential.
Also Check: What’s Going On In Crypto
Consider How Much You Can Invest
Investing is not child’s play. There’s always so much to risk and so little to gain. For newbies, it’s not at all recommended to invest in blockchain without knowing the underlying risks.
You should be aware of what you’re getting yourself into. Dan Tapscotts TEDSummit on Blockchain explains the basics of blockchain and its future potential. We highly recommend checking it out.
But blockchain investments are never sure-fire ways to gain money. Think of it more like youre gambling your money for more money. Its important to know how to invest in blockchain stocks before you start investing.
What Is A Blockchain
Blockchains are digitized, decentralized public ledgers that list all transactions made in their associated cryptocurrencies. Furthermore, computing the next block in the blockchain from new transactions is the mechanism through which digital currencies are mined or brought into existence as a reward that miners receive for successfully doing the complex computation required.
Blockchains are constantly growing as newly completed blocks get added to the public ledger in chronological order that allows cryptocurrency transactions to be monitored and updated without a central record. The record created by a transaction is unalterable and able to be verified by anyone using the blockchain and not just by major financial institutions like banks.
Several industries have successfully applied blockchain technology to solve business problems. These include banks, companies involved in the Internet of Things , artificial intelligence application developers, cybersecurity firms and online music companies.
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Add Value To Your Account
Depending on how you choose to pay, you may have to fund your account before purchasing any crypto. If you’re using fiat currency, most exchanges allow debit and bank transfers. Some also allow you to fund a purchase with your credit card, though this can be a risky move with a volatile asset like cryptocurrency because interest costs can deepen your losses if your investments decline in value.
If you already own cryptocurrency, you can transfer it into your account from a digital wallet or another platform, then use it to trade. Just be sure to verify that your crypto exchange allows trading between the assets you’re looking at. Not all cryptocurrencies can be directly traded for one another, and some platforms have more trading pairs than others.
Another thing to note is that exchanges fees vary depending on what you’re buying and how you’re buying it, so review these details carefully.
Blockchain Technology Market Size In 2022 Regions Will Have The Highest Revenue Important Changes Top Countries Data Which Will Emerge In Importance In The Market Shares And Strategies
PUNE, July 07, 2022 — Blockchain Technology market research report is an experts analysis which mainly includes companies, types, applications, regions, countries, etc. Also the reports give analysis on sales, revenue, trade, competition, investment, forecast. Blockchain Technology market research covers COVID-19 impacts on the upstream, midstream and downstream industries. Also, this study offers a detailed market estimates by emphasizing statistics on several aspects covers market dynamics like drivers, barriers, opportunities, threats, and industry news & trends.
The report focuses on the Blockchain Technology market size, segment size , competitor landscape, recent status, and development trends. Furthermore, the report provides strategies for companies to overcome threats posed by COVID-19.
Technological innovation and advancement will further optimize the performance of the product, enabling it to acquire a wider range of applications in the downstream market. Moreover, customer preference analysis, market dynamics , new product release, impact of COVID-19, regional conflicts and carbon neutrality provide crucial information for us to take a deep dive into the Blockchain Technology market.
Get a Sample Copy of the Report at –
Application & Solution
Key Developments in the Blockchain Technology Market: –
Recommended Reading: What Are Blockchains Used For
Paypal Providing Online Payments Using Blockchain Tech
With online digital payments growth slowing down, PayPal has gone all-in on making sure its app is a one-stop-shop for all financial products and that includes crypto. In late 2020, the company launched its crypto brokerage service which is now used twice as much by its crypto clients than its regular clients.
Furthermore, PayPals crypto rewards from the Venmo credit card have been extremely popular. While its crypto revenues are relatively small compared to the size of the market, the intention of the company is to be a leader in the space. They have even discussed launching their own stablecoin, leveraging all the opportunities blockchain technology can provide.
From the lows of the pandemic, PayPals share price surged nearly 280% higher to a new all-time high in July 2021 around $309.48. However, due to a lower forecasted growth outlook in one of its earnings reports, the stock price collapsed and is now 65% down from its peak. The stock price has now seemed to have stabilised from the recent fall.
If PayPal can continue to create new crypto products to leverage the power of the blockchain then it is certainly a stock to watch as the infrastructure and client base is already in place. PayPal could be one of the best blockchain stocks to focus on for this year.
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The Benefits Of A Blockchain Investment
We have yet to discover what the biggest benefits of blockchain investing will be! This technology hasnt even begun to reach its potential yet. Safe to say, investing today is likely to pay huge dividends far into the future.
Blockchain is also an exciting investment opportunity because its value is still unknown. The decentralized nature of blockchain means that no single person can put a price on it. As a result, its as valuable as investors believe it is just take a look at whats happened to Bitcoin in the last year. Without hyperbole, theres exponential opportunity in an investment in blockchain.
Also Check: Why Are Cryptocurrencies Going Up
The Process Of Transaction
One of Blockchain technologys cardinal features is the way it confirms and authorizes transactions. For example, if two individuals wish to perform a transaction with a private and public key, respectively, the first person party would attach the transaction information to the public key of the second party. This total information is gathered together into a block.
The block contains a digital signature, a timestamp, and other important, relevant information. It should be noted that the block doesnt include the identities of the individuals involved in the transaction. This block is then transmitted across all of the network’s nodes, and when the right individual uses his private key and matches it with the block, the transaction gets completed successfully.
In addition to conducting financial transactions, the Blockchain can also hold transactional details of properties, vehicles, etc.
Heres a use case that illustrates how Blockchain works:
How Can Beginners Invest In Blockchain
Beginners can invest in blockchain assets through a cryptocurrency exchange. Popular exchanges for investors in the U.S. include Coinbase, Binance, Gemini, FTX, and Robinhood. In most cases, you need a funded, verified account to make your first blockchain investment. If that’s not for you, you can consider investing in shares of companies or funds that focus on blockchain technology.
Read Also: How To Buy Bitcoin Stock
Visa Using Blockchain Tech For Crypto Credit Cards
San Franciso based Visa has partnered with more than 60 cryptocurrency platforms to provide crypto credit cards. These include major players such as Binance, FTX, Coinbase and BlockFi.
The 80 million merchants that accept Visa payments can also now accept crypto as payment, as funds are automatically converted into fiat currency. More than $6 billion has been used on Visa crypto cards since the end of 2020 highlighting just how powerful blockchain technology is.
Visa is very well positioned to capitalise on the increased adoption of blockchain tech. They already have a solid network of clients and users, allowing them to expand their products and services with ease.
Since the lows of 2020, Visas share price has risen more than 88% higher, creating a record high in July 2021 around $252.67. The price has since fallen 25% lower but created a new low for this year at $186.67.
Visas share price is now up more than 20% since the lows of the first quarter in 2022. The underlying strength of the stock is one reason why Visa is considered to be one of the best blockchain stocks to buy now.
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