Back to top

Image: Shutterstock

The Smartest Way to Buy Blockchain Stocks

Read MoreHide Full Article

Okay, I get it. You heard about the kid that threw their tax return at an obscure cryptocurrency and became an overnight billionaire…with a “B” not an “M”.  Sort of makes you want to take that $1k you’ve had rotting in that savings account and roll the dice yourself. I mean, if Mikey Millennial can strike it rich with cryptos and NFTs, why can’t you? You like Lambos, too.

Don’t forget, this isn’t the first time this sort of crypto-mania has hit the streets. The public came to know cryptocurrency during its big boom cycle in December 2017. Bitcoin prices had surged from under $2,000 in July 2017 to nearly $20,000.

Fast forward to today, and you’re hearing more blow-outs than blow-ups. Meaning, the landscape is more treacherous than ever. Have you heard of the Luna-Terra Stablecoin debacle? It just cost crypto holders billions of dollars. For every one story about hitting it rich, there are dozens of scams to hear about. It may sound like an easy way to riches, but there is no easy way out.

Prices have suffered as a result. BTCUSD is now trading below $20,000, near levels it traded at the end of 2020. Other major cryptocurrencies like ETHUSD have been hit, too. ETHUSD is close to $1,600, which is a far cry from its highs over $4,800. Investors looking to “Buy the Dip” could be tempted at these levels.

If you’re thinking about diving in headfirst and throwing caution to the wind. Please…DON’T DO IT!

You don't have to have a gambler’s risk tolerance or be a cryptocurrency expert to profit from the boom in Bitcoin, Ethereum, Solana 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 figure out 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 headlines, you'll see that central banks and major retail banks alike have changed their tune about cryptocurrencies. Initially, they scoffed and called them irrelevant. But recently, the discussion has shifted and now they are acknowledging the threat cryptocurrencies bring to their businesses. What they're really saying is that blockchain is revolutionizing the way we account for data.

Futures contracts in Bitcoin have been trading at the CME Group for years. Companies have begun to hold Bitcoin on their balance sheets, right there next to the U.S. dollar. And now, recently, the SEC has allowed the first Bitcoin ETF to trade publicly. This only adds to the legitimization of cryptocurrency as an asset class. Nowadays, crypto is not a pie-in-the-sky idea, it’s a major financial asset which poses a significant threat to traditional payments businesses. As such, it’s an exciting opportunity for investors to get in relatively early in the growth phase of an emerging technology.

Continued . . .


"10X Bigger Than the Internet"

Zacks targets big gains from the innovative businesses behind blockchain – the emerging "Internet of Money." As this technology grows a predicted +2,175% by 2029, shareholders in these companies could make life-changing gains without speculating on volatile cryptocurrencies.

Experts estimate that blockchain technology is "10 times more valuable than the internet." And just like the early days of internet stocks, the profit potential is tremendous. This is your chance to see our top picks for tapping into this phenomenon.

See our blockchain stocks now >>


What is the Blockchain?

In the digital world, a block is a digital list of records, acting as a ledger that can contain information of any kind. When these blocks are linked together, they are secured by cryptography to form the blockchain. This blockchain is an unforgeable record of all the transactions that replicates on every computer on the network. If information in a new block can't be verified by all the other blocks in the chain, it is discarded. In the case of the top cryptocurrencies, a currency's network consists of millions and millions of computers all over the world. This makes it unhackable, as a hacker would need to hack all that computing power simultaneously, a seemingly impossible task.

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 this opportunity we have to separate our thoughts of cryptos from traditional fiat currency. While fiat currency is used to buy cryptocurrency, once bought, cryptos stand on their own. In addition, the smart contract (more on this later) aspect allows cryptos to be not just an exchange of cash, but an exchange of value. In a sense, these currencies are the "Internet of Value".

To simplify, the blockchain is a public registry of assets and transactions that tells us who owns what. These transactions are often referred to as smart contracts, as they are recording a contract between two people, whether it be a transfer of currency, a good or a service.

You can see how this new innovation could be disruptive to traditional businesses out there. Rather than lament this potential disruption, you are in the unique position to profit from it. How, you ask? By investing in the various areas of the market where the blockchain is making noise. There are several different angles here. 

The "Picks and Axes": During the gold rush, the ones who really got rich were the ones selling the picks and axes. That is, the companies which provided the tools for the speculators to go out and try to find their fortunes. In the cryptocurrency world, this refers to the companies which make 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, large consulting companies are beginning to offer services helping companies to integrate the new tech.

Cloud Infrastructure: No other industry has been as dependent on the cloud for its development as blockchain has. The need to distribute a ledger across the world, with no centralized ownership or authority overseeing transactions plays into the strengths of the cloud. Companies which offer cloud-based hosting may suffer, while those which help facilitate this decentralized network will benefit greatly.

Payment Processing: Among the most disruptive industries 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 fee that's much smaller than your typical fees coming from more traditional processors.

Lending: We are just at the tip of the iceberg here on lending. Blockchain tech is perfect for lending, allowing lenders to spread their risk across thousands of loans in an instant, no matter the size of the lender.

Miners: The miners are the most important part of any blockchain and likely the most misunderstood. Miners confirm transactions from node to node by solving the cryptographic problem and are then rewarded in units of the cryptocurrency. Already we are seeing companies which "mine" cryptocurrency publicly traded. These companies mine the currency then immediately sell them on the open market and pass through the gains to shareholders. Think of them as you would a pipeline company in the energy sector. These companies are small now but could become much larger in time.

Investors/BDC: Some publicly traded companies are acting as incubators for other budding cryptocurrencies. We talk about Bitcoin a lot, but there are over 6,000 other cryptocurrencies in the world. These investors and business development companies invest in promising crypto companies before they hit the mainstream.

There are many more companies on the way but how will you know how to separate the pretenders from the contenders? Which of these emerging companies will be built on solid technology and which will be gimmicks? Just like the Dot Com Bubble brought with it several names which added ".com" to their names to get in on the action, companies are adding "Blockchain" to their names, some in a very unscrupulous fashion.

Today, Find the Real Blockchain Companies 

This technology is already having a major impact on almost every industry you can think of, and that impact will only accelerate over time. In fact, experts predict the space will skyrocket +2,175% from $7.2 billion in 2022 to $163 billion by 2029.

Just like the early days when the internet was the new emerging technology, investors have a chance to pocket huge gains. That's why I invite you to look into our portfolio service Blockchain Innovators.

It cuts through the gimmicks and hype to uncover strong, often little-known companies driving blockchain technology – from supplying chips and hardware to fintech firms and payment processing.

We look for stocks with explosive profit potential and long-term sustained growth. In fact, the portfolio is currently riding 7 triple-digit gains reaching as high as +210.3%, +245.3%, even +383.8%

Most importantly, there’s still time for you to get in on them because we believe all 7 still have a long way to grow.

Today’s Unique Market Environment: Strong Economic Signals + Suppressed Stock Prices

Another reason to invest in blockchain now is that nervous investors have created enticing entry points. Pullbacks and inflation have pressed down stock prices. Yet consumer demand and household income are high, the job market is flourishing, and corporate earnings are strong.

Tremendous bargains can be had on selected tickers.

Bonus Report: When you look into Blockchain Innovators, you're also invited to download our newly released Special Report on another fast-emerging industry – NFT Investment Guide: 5 Surprising Picks. “Non Fungible Tokens” are unique and irreplaceable digital assets. This is another space that has almost limitless upside. Already at $35 billion today in revenue, NFTs look to reach $80 billion by 2025.

Your chance to benefit from both Blockchain and NFT ends Sunday, September 11, so I strongly suggest that you look into these potential blockbuster categories right away.

See our Blockchain Innovators stocks and bonus NFT report now >>

Good Investing,

Dave Bartosiak

Dave is Zacks' resident blockchain expert. A successful early crypto investor, he selects stocks and delivers exclusive commentary for our newest portfolio, Blockchain Innovators.

¹ As of 9/6/2022. The results listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research's newsletter editors.


Published in