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The general public finally learned about cryptocurrency during its last boom cycle in December 2017. Bitcoin prices had risen from less than $ 2,000 in July 2017 to nearly $ 20,000. The world was introduced to the crypto millionaire, the millennial nerd who rolled the dice on Bitcoin early and now wandered the streets in a Lamborghini. Everyone wanted to take action, but when the bubble burst, carnage filled the streets.
You don’t have to have the risk tolerance of a gambler or be a cryptocurrency expert to profit from the boom in Bitcoin, Ethereum, Litecoin and others. You don’t even have to believe in the long-term sustainability of any of these coins. You just have to recognize the game and find a way to profit from the underlying technology. That underlying technology, which powers every cryptocurrency on Earth, is the blockchain.
If you’ve been paying attention to the stocks, you’ll see that central banks and major retail banks have changed their minds about cryptocurrencies. Initially, they mocked them and called them irrelevant. But recently, the discussion has shifted and they are now recognizing the threat that cryptocurrencies cause to their businesses. What they are really saying is that blockchain is revolutionizing the way we account for data.
It has already been several months since Facebook proposed the Libra coin. PayPal’s recent announcement offering customers the ability to buy and sell cryptocurrencies is the latest big cryptocurrency news from a publicly traded company. This only adds to the legitimacy of cryptocurrency as an asset class. Cryptography is not a pie idea these days, it is a major financial asset that poses a significant threat to traditional payment businesses.
What is the Blockchain?
In the digital world, a block is a digital list of records, which acts as a ledger that can contain information of any kind. When these blocks are linked together, they are protected by cryptography to form the blockchain. This blockchain is an unmissable record of all transactions that is replicated on every computer on the network. If the information in a new block cannot be verified by all other blocks in the chain, it is discarded. In the case of major cryptocurrencies, a currency’s network is made up of millions and millions of computers around the world. This makes it unassailable, as a hacker would need to hack all that computing power at the same time, a seemingly impossible task.
Keep it going. . .
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10 times bigger than the Internet
Zacks is aiming for big gains from the innovative companies behind the blockchain, the emerging “Internet of Money”. As this technology grows roughly + 1,300% by 2023, shareholders of these companies could make life-changing gains without speculating on volatile cryptocurrencies.
According to government sources, blockchain technology is “10 times more valuable than the Internet”. And just like the early days of Internet stocks, the profit potential is huge. This is your chance to see our top choices for taking advantage of this phenomenon.
Watch our blockchain actions now >>
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I already know I’ve lost some people, but please stay with me. At this point the question within this topic is typically: what does blockchain have to do with currency? Everything. But to understand we need to separate our thinking about cryptocurrencies from traditional fiat currency. While fiat currency is used to buy cryptocurrency, once purchased, cryptocurrencies stand on their own. Also, the smart contract aspect (more on that later) allows cryptocurrencies to be much more than a money exchange, they are an exchange of value. In a sense, these currencies are the “Internet of Value”.
To put it simply, the blockchain is a public ledger of assets and transactions that tells us who owns what. These transactions are often referred to as smart contracts, as they record a contract between two people, whether it is a currency transfer, a good or a service.
You can see how this new innovation could be disruptive to traditional businesses out there. Rather than complaining about this potential outage, you are in a unique position to profit from it. How do you ask? By investing in the various areas of the market where blockchain is making noise. There are many different angles here.
The “Picks and Axes”: 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.
Consulting: 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.
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. Companies that offer cloud-based hosting may suffer from it, while those that help facilitate this decentralized network will benefit greatly.
Payment process: 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.
Loan: We’re just on the tip of the iceberg here on borrowing. Blockchain technology is perfect for lending, allowing lenders to spread their risk across thousands of loans in an instant, regardless of the size of the lender.
Trading plans: Bitcoin’s legitimacy continues as futures contracts began trading on two large exchanges in the United States.
Miners: Miners are the most important part of any blockchain and arguably the most misunderstood. Miners confirm node-to-node transactions by solving the cryptographic problem and are then rewarded in units of the cryptocurrency. We are already seeing companies that “my” cryptocurrency is traded publicly. 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 could get much bigger over time.
Investors / BDC: Some publicly traded companies act as incubators for other budding cryptocurrencies. We talk a lot about bitcoin but there are over 1,300 other cryptocurrencies in the world. These investors and business development firms invest in promising cryptocurrency companies before they reach the mainstream.
ETF: There are already ETFs buying stocks with blockchain exposure, however, soon there will be officially regulated ETFs for bitcoin and Ethereum. These ETFs will move dollar for dollar with an index, they will not trade at huge rewards for the underlying cryptocurrency like those available in the market today.
There are many more companies on the way, but how will you know how to separate the suitors from the contenders? Which of these emerging companies will be built on solid technology and what are the gimmicks? Just as the Dot Com Bubble brought with it several names that added “.com” to their names to get into action, companies add “Blockchain” to their names, some in a very unscrupulous way.
Bottom line
There are several ways to play the cryptocurrency boom without exposing yourself to the same downside volatility. By spreading your investment across different aspects of the blockchain, diversification can help you smooth out your returns. Add in the proven strength of Rank Zacks and our proprietary company investing system with increasing earnings estimates and you have a powerful one-two punch.
The time to start is now
At Zacks, we have taken a very close look at the blockchain phenomenon. This space is expected to skyrocket from nearly $ 3 billion today $ 40 billion by 2023.
Many investors have already become very rich. But in my view, the most profitable days of the blockchain are still ahead of us.
To take this once in a lifetime opportunity, you may want to look into our portfolio, Zacks Blockchain Innovators.
Right now, we are holding a selection of stocks to ride the blockchain boom from different angles, from providing chips and hardware to fintech companies and payment processing. We aim for big earnings from solid companies. Right now, six of our holdings have already generated triple-digit returns, including gains of + 214%, + 395% and + 410% .¹ I believe these stocks still have a lot of upside and now is a great time to capitalize on their momentum.
Check out Blockchain Innovators today and you can also download our special report 7 best actions for the next 30 days. Drawn from the 220 Zacks Rank # 1 Strong Buys, our experts have selected these 7 stocks as the ones most likely to rise in the next month.
I suggest you review it right away. This opportunity ends Sunday 15th November.
See ours Blockchain innovators stocks now >>
I wish you great financial success,
Dave Bartosiak
Dave is Zacks’ resident technician and momentum expert. A successful early cryptocurrency investor, selects stocks and provides exclusive comments for 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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