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The winds of change have become a storm force. The bitcoin craze began towards the end of 2017, culminating in the trading of bitcoin futures contracts. Prices for bitcoin have approached $ 20,000. The hysteria subsided somewhat and the buzzwords of blockchain, cryptocurrency and bitcoin slowly came out of the headlines as bitcoin prices returned to Earth. Until now…
The hype is back. In a world where central banks have opened the taps and quantitative easing has become the norm, cryptocurrencies are taking on a new role. The next stage in bitcoin is the legitimization of the asset class and the spread of blockchain technology.
Behind the recent market headlines on COVID-related arrests and election fallout, the land grab in the blockchain world has begun. It started as a gimmick, with companies changing their names to attract new investors. Now, it has evolved into established industries that use blockchain technology to reduce costs, improve margins and increase profits. Huge companies like Walmart, UnitedHealth and BMW have adapted blockchain technology to meet their needs. And it’s not just budding concepts and partnerships. Real-world applications for blockchain are already making huge changes in industries around the world. The revolution is only just beginning.
Publicly traded companies here in the United States are starting to load bitcoin reserves into their balance sheets. Yes, you read that correctly. Both companies and shareholders are making the conscious decision to diversify their cash by adding cryptocurrency. We are not talking about a hundred dollars here and there, we are talking about billions of dollars. In total, publicly traded companies hold nearly $ 7 billion in bitcoin. What if this becomes standard practice in all publicly traded companies?
In this article, I will make sure that you will not get hurt by chasing fake blockchain companies and instead, I will guide you towards investment ideas that are still fundamentally sound and built around real and sustainable businesses. Legitimation is the new buzzword surrounding bitcoin nowadays. It has the power to take everyday businesses and turn them into the next big thing.
When you look at the cryptocurrency ecosystem, you find that there are many ways to invest in the blockchain. We can divide these actions into five main categories.
1) The “Picks and Axes” and Miners
During the gold rush, the ones who really got rich were the ones who sold picks and axes. That is, the companies that have provided the tools for speculators to go out and try to find their fortunes. In the cryptocurrency world, this refers to the companies that manufacture the chips and hardware used for mining operations. Examples include a host of semiconductor companies.
Then there are the miners themselves. Miners confirm node-to-node transactions by solving the cryptographic problem and are then rewarded in units of the cryptocurrency. We are already seeing publicly traded companies “undermining” cryptocurrency. These companies mine the currency, then immediately sell them on the open market and pass the earnings on to the shareholders. Think of them as you would a gas pipeline company in the energy sector. These companies are small now, but they could get much bigger over time.
Keep reading…
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Will you profit from the blockchain boom?
According to experts, it is 10 times more valuable than the Internet. This “Internet of Money” is already changing the way the world does business. It is projected to increase 1,300% from $ 3 billion to $ 40 billion by 2023.
Now Zacks is targeting the blockchain technology that drives cryptocurrencies like Bitcoin and others. The goal is to ride the growing boom without the volatility of whiplash by investing in the same cryptocurrencies.
The special opportunity ends Sunday at midnight, November 15th.
Watch our blockchain actions now >>
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2) Cloud infrastructure
No other industry has been as dependent on the cloud for its development as blockchain. The need to distribute a ledger worldwide, with no centralized ownership or transaction oversight authority plays into the strengths of the cloud. However, the cloud is still at risk here, as blockchain technology can deploy storage across the globe, fighting the centralized nature of traditional cloud services. However, this industry can adapt technology to take advantage of it.
3) Payment and loan processing
Among the most disruptive sectors for blockchain is payment processing. Rather than your traditional financial intermediary, blockchain technology allows for a distributed, open, public ledger where transactions are confirmed by other nodes in the chain for a much lower fee than typical fees from more traditional processors.
Blockchain technology is also perfect for lending, allowing a lender to spread their risk across thousands of loans in an instant, regardless of the size of the lender. We are only at the tip of the iceberg in this arena.
4) Investors, Business Development and Consulting Companies
There will be a wave of companies looking for ways to incorporate blockchain technology into their existing businesses. Already today, large consulting firms are starting to offer services that help companies integrate new technology. Gartner has even developed a site dedicated to this purpose.
Some publicly traded companies act as incubators for other budding cryptocurrencies. There are currently over 6,000 cryptocurrencies in the world with a total market capitalization of over $ 461 billion. The total volume of the world cryptocurrency market exceeds $ 110 billion per day. These investors and business development firms invest in promising cryptocurrency companies before they reach the mainstream.
5) Futures and ETFs
Bitcoin legitimacy continues as futures contracts and options on these contracts have started trading on a large exchange in the U.S. Officially, the SEC has yet to approve a bitcoin ETF, although several applications have been worked out. Meanwhile, investors have used Greyscale Investments GBTC as a proxy as it is the only publicly traded entity on a major US exchange that explicitly owns only bitcoin. As cryptocurrency continues to get bigger, it matures even more as an asset class.
Bottom line
There is no doubt that blockchain will have a huge impact on almost any industry you can think of. In fact, experts predict that space could rise by + 1,300% to $ 40 billion by 2023.
Just like the early days of the internet, some companies are able to offer monstrous gains for investors. Others will be a flash in the pan.
That’s why I invite you to check out our portfolio service Blockchain innovators. We’ve cut back on gimmicks and ad campaigns to discover little-known but fundamentally strong companies driving the blockchain revolution.
We aim for explosive profit potential and sustained long-term growth. Right now, six of our positions have already generated triple digit returns, including gains of + 214%, + 395%, + 410% .¹ I think these stocks still have a lot of upside. Also, on Monday, I’m preparing to add more interesting stocks with similar profit potential.
This is the perfect time to capitalize on this booming industry.
When you look inside Blockchain innovators, you are also invited to download our just updated 7 best actions for the next 30 days Special report. Selected from Zacks Rank # 1’s list of 220 strong buys, our experts predict these 7 stocks will be more likely to rise in the next month.
Note: This opportunity is only available until midnight Sunday 15th November, so I suggest you take advantage of it now.
See ours Blockchain innovators stocks now >>
Good investment,
Dave
Dave Bartosiak is Zacks’ resident momentum and technical expert. A successful early cryptocurrency investor, selects stocks and provides exclusive commentary for our latest portfolio, Blockchain innovators.
¹ Starting from 11/09/2020. The results listed above are not (or may not be) representative of the performance of all selections made by the editors of the Zacks Investment Research newsletter and may represent the partial closure of a position
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