Blockchain stocks are publicly traded companies that incorporate blockchain technology into their business in one form or another.
You may know blockchain as the technology behind Bitcoin and several other cryptocurrencies. However, many investors lack a thorough understanding of blockchain or the best ways to invest in this exciting technological trend.
Here's a brief overview of blockchain technology, followed by some of our favorite blockchain stocks -- and one important principle blockchain investors should keep in mind.
What is blockchain?
Blockchain is a form of ledger technology (also known as distributed ledger technology) that keeps records in a decentralized manner. A bank, for example, can store information (such as payment transactions) on its internal servers, but blockchain technology enables the creation of an immutable public ledger that's accessible to all users. Blockchain ledgers are a highly secure means of storing data since they cannot be modified retroactively, and they can be used anonymously to protect users' privacy.
It's worth noting that blockchain and cryptocurrency are two different concepts. Blockchain is the underlying technology that powers cryptocurrencies, but it has numerous other potential applications that are unrelated to Bitcoin (BTC -0.63%) or other digital currencies.
Think of cryptocurrencies as a car and blockchain as its motor. Sure, you need a motor to power a car, but there are many other potential applications for motors. Just to name a few, blockchain has implications for:
- Digital IDs.
- International money transfers
- Rewards and loyalty programs.
- Copyright protection.
- Digital voting.
- Real estate transfers.
- Medical records.
- Wills.
Best blockchain stocks to consider
Many publicly traded companies now incorporate blockchain into their operations, offer blockchain-related services to customers, or play a role in the cryptocurrency 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 10 excellent blockchain companies to consider if you want exposure to this exciting technology in your stock portfolio.
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Nvidia (NASDAQ:NVDA) | $4.6 trillion | 0.02% | Semiconductors and Semiconductor Equipment |
| Block (NYSE:XYZ) | $39.5 billion | 0.00% | Diversified Financial Services |
| International Business Machines (NYSE:IBM) | $284.0 billion | 2.21% | IT Services |
| Mastercard (NYSE:MA) | $517.6 billion | 0.53% | Diversified Financial Services |
| Amazon (NASDAQ:AMZN) | $2.5 trillion | 0.00% | Multiline Retail |
| Coinbase Global (NASDAQ:COIN) | $65.3 billion | 0.00% | Capital Markets |
| Global X Funds - Global X Blockchain ETF (NASDAQ:BKCH) | $0.0 thousand | 0.00% | Capital Markets |
| PayPal (NASDAQ:PYPL) | $55.6 billion | 0.24% | Diversified Financial Services |
| Mara Holdings (NASDAQ:MARA) | $3.7 billion | 0.00% | Software |
| Riot Platforms (NASDAQ:RIOT) | $5.1 billion | 0.00% | Software |
1. Nvidia
NASDAQ: NVDA
Key Data Points
Nvidia (NVDA -0.61%) is the leading manufacturer of graphics processing units (GPUs), which are essential components in such important technological areas as artificial intelligence, autonomous vehicles, and gaming. For good reason, most investors are paying close attention to Nvidia for its data center GPU chips, which are an essential component of AI technology.
Artificial Intelligence
In addition, GPUs are key hardware components of cryptocurrency mining. In a nutshell, "miners" use specialized GPUs to process transactions on the blockchain and are rewarded with newly minted digital coins.
Although sales of Nvidia's crypto-targeted CMP chips aren't as big a part of its revenue as they once were, the company still produces mining chips, such as the Nvidia CMP Hx. And regardless of what Nvidia's mining chips do, the rest of Nvidia's business is an absolute powerhouse market leader.
2. Block
NYSE: XYZ
Key Data Points
Financial technology (fintech) company Block (XYZ +2.69%), formerly known as Square, has two main components to its business: its payment-processing ecosystem for small businesses and its Cash App personal financial platform. The company also has operations in business lending, a stock trading platform, and buy-now-pay-later (BNPL) financing. Additionally, the company operates the Square Online Store platform, which helps merchants build out e-commerce and omnichannel capabilities.
E-commerce
Block is a blockchain stock in two main ways. Most obviously, Cash App allows users to buy and sell Bitcoin quickly and easily. With the company reporting about $10.1 billion in Bitcoin purchases in 2024 alone, this is a significant part of Block's business.
Also, Block has several other blockchain-related projects. There's the Bitkey self-custody bitcoin wallet. The company offers the Bitkey bitcoin wallet, the Spiral cryptocurrency infrastructure division, and participates in several others.
3. IBM
NYSE: IBM
Key Data Points
4. Mastercard
NYSE: MA
Key Data Points
NASDAQ: AMZN
Key Data Points
NASDAQ: COIN
Key Data Points
7. Global X Blockchain ETF
NASDAQ: BKCH
Key Data Points
Exchange-Traded Fund (ETF)
8. PayPal
NASDAQ: PYPL
Key Data Points
NASDAQ: MARA
Key Data Points
10. Riot Platforms
NASDAQ: RIOT
Key Data Points
Riot's mission is to build the world's leading Bitcoin-driven infrastructure platform. It operates a large bitcoin mining operation both on its own and in data centers, manages supply chain issues, and holds the fourth-largest Bitcoin reserve among all publicly traded companies.
Riot has several key advantages, such as the industry's lowest power cost, as well as excellent financial flexibility with $330 million on the balance sheet.
Pros and cons of investing in blockchain stocks
Blockchain technology is still relatively young and is evolving rapidly. Plus, there are several ways AI technology can enhance blockchain and the companies that operate in the space.
In short, the advantages of investing in blockchain stocks include the growth potential that comes from a rapidly evolving technology trend.
The biggest drawback is volatility. Most of the stocks on this list (with a few exceptions) are more volatile than the average stock. For example, Riot Platforms has a beta of 3.65, which implies that it is almost four times as volatile as the typical S&P 500 stock. So, if you invest, be prepared for a bit of a roller coaster ride.
How to invest in blockchain stocks
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
One important takeaway
Notice that all 10 of these stocks are either well-established businesses or leaders in their respective industries (or ETFs that invest in a variety of companies).
Although blockchain technology has been around for some time, it’s still in the early stages of real-world implementation. Blockchain has the potential to significantly affect finance, technology, and various other industries in the coming years, though its widespread adoption may take longer to materialize. For this reason, it's smart to focus on companies that will benefit from the growth of blockchain technology, but will remain resilient even if their blockchain initiatives don't succeed.
Factors to consider when choosing blockchain stocks
We've now seen 10 excellent companies that do business in crypto or blockchain. Just to name a few things to consider when choosing which are best for you:
- How much of the company's business is dependent on blockchain?
- Does the company have a solid track record of performance?
- Does the company have price-sensitive businesses, such as crypto trading, or does it provide something else, like blockchain infrastructure?
Related investing topics
Strategies for investing in blockchain stocks
Because of their generally high level of volatility, it could be wise to spread your money out among a few different blockchain stocks (or to use an ETF like the one in the list).
It can be especially wise to focus on blockchain stocks that also have substantial non-blockchain businesses, as this revenue diversification can help offset any ebbs and flows in the blockchain industry. You'll notice that while a few of the stocks on the list are pure-play cryptocurrency or blockchain stocks, most are more well-rounded technology or financial companies that happen to derive some of their revenue from blockchain activities.
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