Photograph of Rishi Deep
Blockchain technology, the software behind bitcoin, has been announced as a potential trillion dollar innovation. But investors have few ways to invest in technology, which is still in its infancy and has attracted many supporters as supporters.
There are more traded funds that hold companies that have invested in blockchain, but their actual exposure to technology is minimal.
What should an investor do? JP Morgan analyst Sterling Auty has some ideas Auty is optimistic about the technology. He thinks that "blockchain without authorization", software like bitcoin that is open to anyone, is comparable to "World Wide Web in 1998", even though most of the companies that currently use blockchain technology are "authorized", which means that they do not allow public access. And in a report last week, he collected three titles that could benefit from the long-term blockchain.
Cloud infrastructure company
(ticker: AKAM) could help companies manage blockchain software as a service, Auty projects. In May, Akamai announced a partnership to build a blockchain-based payment network that according to the company is designed to process more than 1 million transactions per second.
(DOCU), meanwhile, makes electronic signature technology and could also benefit from the blockchain if the company digitizes the entire bargaining process, writes Auty. The company already allows users to link a blockchain to their system, he notes.
(ELLI), a software company that processes mortgage applications, could also benefit, writes Auty. "The use of the blockchain to manage the mortgage process could bring trust between the parties and the use of smart contracts could help automate various activities," he writes.
JPMorgan could be bullish on the blockchain prospects of these companies, but only has a buy rating (or overweight) on two of them: Akamai and DocuSign. The company has an underweight evaluation on Ellie Mae.
Write to Avi Salzman at [email protected]