If You Want Exposure To Digital Assets Your Options Are Growing Here’s A List Of Cryptocurrency Stocks To Dip Your Toes Into This Expanding Technology
Bitcoin recently suffered one of its biggest monthly drops on record in May. The price of the digital asset crashed all the way from a mid-April high over $64,000, to $30,000 by late May dragging many cryptocurrencies and cryptocurrency stocks down with it. That was followed by a quick rebound to $40,000, and since then, prices have been stuck in the $30,000-$40,000 range.
The volatility in Bitcoin and by proxy, cryptocurrency stocks this year has rekindled excitement in retail investors in a way it hasn’t since the digital coin last peaked in 2017.
Professional investors, billionaires and even publicly traded companies have maintained a keen interest in cryptos, too. This involvement in both Bitcoin, other cryptocurrencies and blockchain the secure authentication technology behind digital currencies are already showing up as a new source of revenue for many companies in mid-2021.
It’s partly thanks to the pandemic. COVID-19 helped accelerate a number of digital reforms in companies large and small. “We’ve seen two years’ worth of digital transformation in two months,” Microsoft CEO Satya Nadella stated last April when the pandemic was running rampant.
Data is as of June 23. Earnings growth rate, profit margin and return on equity provided by Yahoo! Finance.
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- Quarterly earnings growth rate : 1,206%
- Profit margin: 22.8%
- Return on equity trailing 12 months : 29.4%
Seven Top Blockchain Companies To Consider
Dozens of publicly traded companies incorporate blockchain tech into their operations, offer blockchain-related services to customers, or play a role in the crypto industry. Some are exclusively focused on blockchain innovation and/or cryptocurrencies, while others are using blockchain-related products and services to complement an existing successful business.
With that in mind, here’s a list of seven excellent stocks you may want to consider if you want to invest in blockchain technology.
Blockchain Stocks: 10 Of The Best Blockchain Stocks To Invest In Right Now
Blockchain stocks are the most active stocks today, but is it a worthwhile investment? Here are the best blockchain stocks.
At the heart of the fast-growing cryptocurrency market is blockchain technology. Lets take a close look at some of the best blockchain stocks investors can buy right now.
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How Does Blockchain Work
The purpose of the blockchain is to record all of the exchanges of data. This record is known as the ledger. The exchanges of data recorded on the ledger are known as transactions.
Verified transactions are added to the ledger as a block. Each block has three elements:
Miners can create new blocks on the chain through mining. While every block has its own nonce and hash, it also references the hash of the previous block in the chain.
This means that miners need to use specialised software to solve the complex math problem of finding a nonce that generates an accepted hash of which there are around four billion combinations that need to be mined before finding the right one.
This process makes it extremely difficult to manipulate the blockchain. Once a block is successfully mined and is accepted by the nodes on the network the miner receives a financial reward. Nodes are electronic devices that keep a copy of the blockchain and keeps the network running.
Ways To Invest In The Blockchain Boom
The concept is not simple. A blockchain works like a massive digital spreadsheet or ledger in which every transaction is recorded. It confirms, validates, and archives information, and it can be accessed, virtually in real-time, by all participants.
While blockchain technology was crucial in the development of Bitcoin, its potential for adaptation to other uses has opened a number of possibilities for investors, both related and distinct from cryptocurrency.
Blockchain technology is becoming known by another moniker, distributed ledger technology .
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Digital Assets And Cryptocurrency
Cryptocurrency is the most common method of investing in blockchain and its fairly simple. It is enough to set up an account on a cryptocurrency exchange like Coinbase or Gemini and start trading. Investments in cryptocurrency are at high risk due to speculation based volatility.
Digital asset investment is a broader area. Anything from gold to art to real estate can become a digital asset through the tokenization process. Tokenization allows the conversion of anything that has value into a digital token that exists on the blockchain.
For example, imagine that you are an art investor but do not have enough funds to buy an artwork that costs $1 million. An art dealer tokenizes this artwork into one hundred token and values each token at $10,000. By buying two of those tokens, you can now own 2% of the artwork. All the while blockchain guarantees proof of ownership, and that your investment is safe.
Individual Blockchain Stocks: Crypto
Alternatively, there are some publicly traded companies that either offer crypto-related services or are directly exposed to cryptocurrency:
- Grayscale Bitcoin Trust
- Intercontinental Exchange
- CME Group
As cryptocurrency becomes more mainstream in its uses, it’s likely that more crypto firms will be publicly listed. For example, Coinbase the largest crypto-exchange in the U.S. is planning to hold its IPO in early 2021.
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Why Would Someone Be Interested In Canadian Blockchain Stocks
If youre on the fence about investing in this new asset class, thinking theyre riskier than other Canadian stocks, lets run through a few of the reasons you might be interested.
Firstly, Bitcoin and other cryptocurrencies are designed with inflation in mind. Unlike regular dollars, which you can create out of thin air, there are a limited number of Bitcoins.
Once theyre all mined, thats it. Theres no more. People like that protection.
Secondly, Bitcoin transactions are anonymous. This appeals to a certain subsection of investor, folks who like being able to exchange money without anyone knowing about it.
Privacy protections are built right in Bitcoin is designed to ensure your coins belong to you, but its very hard to tell who the parties are in each transaction.
Create And Verify Your Account
Once you decide on a cryptocurrency broker or exchange, you can sign up to open an account. Depending on the platform and the amount you plan to buy, you may have to verify your identity. This is an essential step to prevent fraud and meet federal regulatory requirements.
You may not be able to buy or sell cryptocurrency until you complete the verification process. The platform may ask you to submit a copy of your drivers license or passport, and you may even be asked to upload a selfie to prove your appearance matches the documents you submit.
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Why Invest In Blockchain Shares
Blockchain technology has revolutionised transactions in many industries by slashing costs, saving time, and increasing transparency. It has numerous other applications while DLT is increasingly being adopted in the fintech space. The 2020 pandemic triggered a flood of new funds into these new asset classes, so most players in the blockchain field are enjoying substantial financing. Additionally, there has been a rise in clinical data sharing, and blockchain stocks positively respond to these developments.
Immunity passports and vaccination proof can be easily obtained using blockchain technology and without compromising privacy. Therefore, blockchain technology will be able to take advantage of these new opportunities as the world seeks to repair and heal from the havoc caused by the pandemic.
Best Cryptocurrency Exchanges And Investing Platforms
Here is our list of the 10 best cryptocurrency exchanges and investing or trading platforms. The cyrpto offers that appear on this site are from companies from which The College Investor receives compensation. This compensation may impact how and where products appear on this site . The College Investor does not include all cryptocurrency exchanges or all crypto offers available in the marketplace.
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There Is Extensive Risk With Blockchain Stocks And Crypto
Dont get me wrong, its not all roses with bitcoin and Canadian blockchain stocks. A ton of investors looking to learn how to buy stocks dont truly realize how volatile cryptocurrency and blockchain stocks are. They see high flying plays like Shopify and get the idea they want to catch the next big thing before it becomes big.
Bitcoin is volatile, with the value of one coin often rising or falling by 5-10% per day. Thats much more volatile than any other major world currency, which indicates the asset class has plenty of speculation moving its price.
And although there are more websites that are starting to accept it as payment, most people end up selling and then converting their Bitcoins into cash.
There are also security risks when buying Bitcoin. Yes, your coins are kept secure in a digital wallet, but thats only as safe as the underlying company.
You might remember Quadriga, a Canadian cryptocurrency exchange that went under in 2019 after the owner unexpectedly passed away in India. Nobody has been able to access his laptop, where all the coins were held. Thousands of customers were out a collective $200 million.
Because of situations just like this one, the safer way is to invest in cryptocurrency stocks on a major stock exchange. You cant buy Bitcoin directly on the TSX, but you can invest in Canadian stocks that mine Bitcoin. Lets take a closer look at the three top Canadian cryptocurrency stocks of 2020.
How Much Does Blockchain Stock Cost
You cant buy specific shares of blockchain so there is no blockchain stock price.
Where to invest $500 right now
Lots of new investors take chances on long shots instead of buying shares of great companies. I prefer businesses like Amazon, Netflix, and Apple theyre all on my best stocks for beginners list.
Theres a company that called these businesses long before they hit it big. They first recommended Netflix in 2004 at $1.85 per share, Amazon in 2002 at $15.31 per share, and Apple back in the iPod Shuffle era at $4.97 per share. Take a look where they are now.
That company: The Motley Fool.
For people ready to make investing part of their strategy for financial freedom, take a look at The Motley Fools flagship investing service, Stock Advisor. They just announced their top 10 best buys now across the entire stock market. Whether youre starting with $100, $500, or more, you should check out the full details.
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How To Invest In Circle
Until this announcement, investing in Circle as a private company would have meant you were both wealthy and well connected. Some other options you could have explored included or The Private Shares fund, which holds equity in Circle.
Now, with the announcement of their listing later this year, anyone will be able to buy Circle stock on the NYSE once the companys shares start to trade in the secondary market.
We just see an incredible opportunity to grow rapidly and grow around the world, and we think that this set of transactions and becoming a public company really sets us up to be a trusted platform in this in this digital currency industry. Circle CEO Jeremy Allaire
Circle has chosen the route of listing with a SPAC, which is a special purpose acquisition company. SPACS have become increasingly popular. There was only one SPAC IPO in 2009, this grew to over 50 by 2019 raising $13B, and 2020 saw 248 SPAC IPOs raise more than $80B.
If you wait till the merger happens and the new entity is listed on the NYSE, you will have to decide when to buy. Looking at the recent example of Coinbases listing, the price came down after the hype of the listing faded. This could happen when Circle lists or the price could climb higher if the market sentiment is bullish.
Bitcoin Market Journals CEO Sir John Hargrave wrote in a recent newsletter:
Riot Blockchain Share Price Volatility
Over the last 12 months, Riot Blockchain’s shares have ranged in value from as little as $3.076 up to $79.5. A popular way to gauge a stock’s volatility is its “beta”.
Beta is a measure of a share’s volatility in relation to the market. The market beta is 1, while Riot Blockchain’s is 4.4958. This would suggest that Riot Blockchain’s shares are significantly more volatile than the average for this exchange and represent a higher risk.
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Adoption Of Blockchain Technology Top Brands And Governments
An increasing number of companies and governments are adopting blockchain technology to increase the efficiency of their management. Some of the leading companies that have integrated the technology in their operations are IBM, Amazon, Bank of America, Mastercard, Microsoft, and Google.
These companies understand that blockchain investments will give them a competitive edge. On the other hand, many governments around the world are implementing blockchains for a variety of operations. Individuals must be quick to spot this investment opportunity backed by large companies and governments.
How To Invest In Blockchain Technology And Gain The Highest Returns
Blockchain technology development by world’s leading tech companies and its adoption promising economic growth potential for businesses has opened up lucrative investment opportunities. Nevertheless, market players need to have the knowledge and awareness of the prospects of this new technology, the investment options, and key market players before making any decisions.
Historically, blockchain technology was best known as the transaction ledger of Bitcoin. Nowadays, blockchains transcend cryptocurrency applications and emerge as a promising transformative technology in many industries, such as financial services, logistics, energy, healthcare, retail, and many more.
The main drivers of growth behind blockchain technology are the need to simplify business processes and the need for reliable supply chain management. These drivers will push the estimated growth of the blockchain market from $3 billion in 2020 to a projected $39.7 billion in 2025.
Counting on the earlier market performance, and the future predictions painting an encouraging financial picture, an increasing number of businesses are looking for ways to integrate blockchain technology and gain revenues. Read on to learn about some of the most profitable ways to invest in blockchain.
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Invest In Companies Connected To Cryptocurrency
If youd rather invest in companies with tangible products or services and that are subject to regulatory oversightbut still want exposure to the cryptocurrency marketyou can buy stocks of companies that use or own cryptocurrencies and the blockchain that powers them. Youll need an online brokerage account to buy shares of public companies like:
- Nvidia . This technology company designs and sells graphics processing units, which are at the heart of the systems used to mine cryptocurrency.
- PayPal . Already a popular choice for people buying items online or transferring money to family and friends, this payments platform recently expanded to allow customers to buy and sell select cryptocurrencies with their PayPal and Venmo accounts.
- Square . This payment services provider for small businesses has purchased over $220 million in Bitcoin since October 2020. In February 2021, the firm disclosed that Bitcoin made up around 5% of the cash on its balance sheet. In addition, Squares Cash App allows people to buy, sell and store cryptocurrency.
As with any investment, make sure you consider your investment goals and current financial situation before investing in cryptocurrency or individual companies that have a heavy stake in it. Cryptocurrency can be extremely volatilea single tweet can make its price plummetand its still a very speculative investment. This means you should invest carefully and with caution.
Open A Trading Account
Opening and funding a live trading account is the first and the simplest step in the process. You will need to provide a username, password, email, and address to open an account. The trading platform will insist on identity verification which can be done by providing identification documents to comply with Know Your Customer regulations.
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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:
Blok Blcn And Legr Are The Three Blockchain Etfs For Q4 2021
Blockchain exchange-traded funds own stocks in companies that have business operations inblockchain technology or profit from it in some way. Blockchain is made up of complex blocks of digital information and is increasingly used in banking, investing, cryptocurrency, and other sectors.
While blockchain is a relatively new technology, many of the companies that operate in the space are well established. Some examples include International Business Machines Corp. , Oracle Corp. , and Visa Inc. .
Many investors may be wary of risking an investment in blockchain due to the technologys association with the volatile cryptocurrency market. However, blockchain is not the same thing as cryptocurrency, and blockchain ETFs invest only in stocks of regulated companies, many of which are big blue-chip technology firms and not directly in cryptocurrency.
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