If we think about blockchain stocks, mostly cryptocurrencies will come to our mind because it’s the underlying technology that cryptocurrency works on, but blockchain has much more in-house to offer.
Blockchain technology is not a product of one company but a technology upon which numerous companies are using it in their core businesses to improve overall efficacy.
Recap
Blockchain technology is a publicly available digital ledger that records the details of transactions. All transactions are combined to form a block, and each block is digitally signed and given a unique hash code for a record in the ledger.
Cryptocurrencies work in a similar manner, where blocks keep adding to form a new unit of crypto coin.
What are Blockchain Stocks?
Blockchain stocks are shares in a company that uses blockchain technology as a part of their business.
Investors who want to diversify their portfolio can invest in blockchain exchange-traded funds (ETFs) that let investors put money in companies that are using blockchain technology.
Why Invest in Blockchain Stocks?
As a new technology that has a market of its own, blockchain has quite the potential to become a lucrative source of income for investors, but it’s important to note that it’s not an overnight process.
- Organizations using blockchain could become more efficient in their workflow, which will ultimately result in a good profit for the company and investors.
- Blockchain offers robust security and privacy that make the whole trading process hassle-free.
- It is an emerging technology that keeps on luring more people, so the adoption rate is also good.
- Tech giants like Amazon, Samsung, Tech-Mahindra, etc. also utilize blockchain technology.
Famous Companies Using Blockchain
There are numerous public/private companies, airlines, Governments are using or planning to use blockchain technology.
- Barclays: The Second largest bank in the UK, is using blockchain technology for a smooth flow of fund transfers and know-your-customer (KYC) transactions.
- Visa: The well-known company providing debit and credit card services across the globe, is using blocking in business-to-business payments.
- Walmart: A famous multinational retail brand, is utilizing IBM blockchain technology for supply chain management, named ‘HyperLedger Fabric’.
- IBM: Probably the biggest user and implementer of blockchain, helps other businesses utilize this technology through its products.
- DHL: The prominent worldwide shipping company along with Accenture Inc. are working on a proof-of-concept that can track pharmaceutical goods from their origin to the end customer to avoid counterfeiting.
Five Blockchain Stocks
Mentioning five major blockchain stocks.
Note:
All revenue and net income mentioned are from June 2022 to June 2023, i.e., one year.
1. Coinbase Global Inc. (COIN)
Revenue: $2.700 billion- Net Income: $-1.278 Billion
- Exchange: Nasdaq
Revenue: $2.700 billionCoinbase is one of the most well-known companies in the crypto world because its whole business revolves around cryptocurrency exchanges and wallets.
With a mission to create an ‘Open Financial System’ for the world, Coinbase can benefit from the stability cryptocurrencies have achieved in 2023.
2. Robinhood Markets, Inc. (HOOD)
- Revenue: $1.668 billion
- Net Income: $827 million
- Exchange: Nasdaq
Revenue: $1.668 billionRobinhood is a stock trading and investing platform that also offers cryptocurrency trading.
Robinhood also has a sheer user base of 10.6 million monthly active users as of August 2023.
3. Riot Blockchain, Inc. (RIOT)
- Revenue: $256 million
- Net Income: $-276 million
- Exchange: Nasdaq
Revenue: $256 millionAn American-based company that deals in Bitcoin mining, data center hosting, and electronic products
Riot is focusing on expanding the use of blockchain technology through partnerships and investments.
4. Canaan Inc. (CAN)
- Revenue: $329 million
- Net Income: $-279 million
- Exchange: Nasdaq
Revenue: $329 millionOperating from China, Canaan provides high-performance computing software, hardware, artificial intelligence, and newly formed technologies.
Canaan also manufactures ASICs that are used for crypto mining and are more efficient than GPUs that people normally use.
5. Marathon Digital Holding Inc. (MARA)
- Revenue: $259 million
- Net Income: $-353 million
- Exchange: Nasdaq
Revenue: $259 millionMarathon Digital Holding is a digital asset management company that provides the necessary hosting services and infrastructure for crypto mining.
It is also one of the biggest holders of Bitcoin (BTC) among public trading companies, with an effort to make Bitcoin mining as efficient as possible.
What is the Blockchain ETF?
Blockchain Exchange Traded Funds (ETF) help to track the performance of blockchain-related assets like cryptocurrencies and blockchain-based companies that use them in their products and services.
This enables investors to gain entry-level experience in blockchain investment without having to buy shares of particular blockchain assets.
There are many kinds of blockchain ETFs available, like ones that track a wide variety of blockchain assets and some that only track particular sectors of blockchain, like cryptocurrency.
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Top Five Blockchain ETFs
Mentioning five blockchain ETFs according to ‘Assets under Management’.
1. Amplify Transformational Data Sharing ETF (BLOK)
By launching early in the game in January 2018, BlOK has quite established itself as a crucial player in the blockchain ETFs.
BlOK holds around $441 million in ‘assets under management,” making it the largest ETF, shedding light on its dominance and popularity.
Bitwise Crypto Industry Innovators ETF (BITQ)
Despite launching in May 2021, BITQ has seen exemplary success in terms of assets under management, standing at $81 million, making it the second-largest player in the ETF.
Moreover, BITQ maintains an index of 30 companies that are involved in cryptocurrency, crypto mining pools, and its hardware suppliers.
Global X Blockchain ETF (BKCH)
With $66 million in assets under management, BKCH stands third on the list.
Founded in July 2021, it is still fairly new.
BKCH uses its ‘Solactive Index’ that tracks the companies focusing on blockchain development and cryptocurrency.
Siren Nasdaq NexGen Economy (BLCN)
Launched in January 2018, BLCN now has $62 million in assets under management, making it fourth on the list.
BLCN uses the Nasdaq index for tracking blockchain companies.
VanEck Digital Transformation ETF (DAPP)
Launched in April 2021, DAPP has $45 million in assets under management.
It uses the MVIS global digital assets equity index.
FAQs in Detail
Q1: What are blockchain stocks?
A1: Blockchain stocks are shares of companies involved in developing or utilizing blockchain technology for various purposes, such as decentralized finance, supply chain management, or secure data storage. These stocks represent investments in the growing blockchain industry.
Q2: How do I invest in blockchain stocks?
A2: To invest in blockchain stocks, you can open an account with a brokerage firm or online trading platform. Research blockchain companies, choose stocks, and buy them through your brokerage account, similar to investing in traditional stocks.
Q3: What factors should I consider when selecting blockchain stocks?
A3: When selecting blockchain stocks, factors to consider include the company’s financial health, the management team’s experience, the adoption of blockchain technology, partnerships with established companies, and the overall potential for growth in the blockchain sector.
Q4: Are blockchain stocks volatile?
A4: Yes, blockchain stocks can be volatile due to the inherent risks associated with emerging technologies and market sentiment. The stock prices of blockchain companies may experience significant fluctuations based on news, regulatory changes, or market adoption trends, making them potentially volatile investments.
Q5: Are all blockchain stocks the same?
A5: No, blockchain stocks can vary significantly in terms of their business focus, size, and market position. Some companies primarily develop blockchain technology, while others implement it in specific industries like finance, healthcare, or cybersecurity. Researching individual companies is crucial to understanding their unique value.
Q6: What are blockchain ETFs?
A6: Blockchain ETFs are exchange-traded funds that invest in companies utilizing blockchain technology to improve their operations or create innovative blockchain solutions.
Q7: How do blockchain ETFs work?
A7: Blockchain ETFs buy shares of companies involved in blockchain technology, offering investors exposure to the growth potential of blockchain without them directly investing in individual blockchain companies.
Q8: What are the advantages of investing in blockchain ETFs?
A8: Blockchain ETFs allow investors to diversify their exposure within the blockchain sector, providing access to a broad range of companies involved in blockchain technology at the same time They also offer liquidity and ease of trading on stock exchanges.
Q9: What are the risks associated with blockchain ETFs?
A9: The main risks include the volatility of blockchain-related companies, regulatory uncertainties surrounding blockchain technology, and market risk associated with general stock market conditions. Investors need to be aware of these risks when considering investing in blockchain ETFs.
Q10: How can I choose the right blockchain ETF to invest in?
A10: Factors to consider include the ETF’s expense ratio, tracking error, assets under management, diversification strategy, and the fund manager’s expertise. It’s also essential to assess the ETF’s underlying holdings and its exposure to different segments of the blockchain.
