Are blockchain stocks a good investment? 5 best blockchain stocks to buy
Are blockchain stocks a good investment? Cryptocurrencies may be the most famous application of blockchain technology, but the function of blockchain far exceeds digital currencies. Many organizations use blockchain technology to improve their operations -especially for complex and decentralized systems. The following are the methods of investing in the blockchain and some factors that should be considered before investing.
Can you invest in the blockchain?
Let us first solve a common problem that point to the misunderstanding of the blockchain. We are sometimes asked if they can invest in the blockchain. The answer is not directly, we will explain the reason.
There are more than one blockchain, there are many. Blockchain is a distributed digital classification account, which means that it is essentially a database. The "distributed" part means that the classification ledger is not stored in the central position like a commercial ledger, but is distributed between users.
Blockchain technology is a technology that allows to protect data and ensure its accuracy to add data to the database. Therefore, any simple way of thinking is that you cannot invest in the blockchain, but you can invest in blockchain technology through investment to support blockchain, use them or explore its potential use.
Why start investing in the blockchain?
As a new technology that has potentially subversive influence on the commercial world, the blockchain is naturally attracted to the investment community. The following are several factors that make it attractive:
Blockchain can help organizations improve efficiency and release higher profitability over time.
The blockchain is receiving great attention from large technology companies such as Amazon (AMZN) and Salesforce.com (NYSE: CRM).
Due to COVID-19, the world is rapidly steering digitalization. Blockchain is handled with other adjacent technologies, such as cloud computing, e -commerce and artificial intelligence.
There are also some risks to consider, especially blockchain investment involving cryptocurrencies:
Many new cryptocurrencies appear with the underlying blockchain projects, and many of them have not succeeded.
Cryptocurrency prices fluctuate greatly, and buying them may cause principal losses.
Should you invest in cryptocurrencies or stocks?
Before we explore how to invest in blockchain technology, we want to solve the question of cryptocurrency investment and whether this is a good idea.
If you have been paying attention to the cryptocurrency world, you may have seen some extraordinary numbers, these numbers may make you believe that you can get rich by investing in cryptocurrencies. Let's talk about the reality of encrypted transactions.
Indeed, some people have made a lot of money through transaction cryptocurrencies. However, it is also true that people have lost a lot of money. The reason is that there are some major risks to buy cryptocurrencies -although any stock is the case, there are some special risk factors in cryptocurrencies:
Lack of supervision -cryptocurrencies are scattered, which makes them different from legal currencies such as the US dollar. Because there is no regulatory agency, there may be risks to buy cryptocurrencies. The reason why virtual currency is valuable is because people believe that they are valuable and have no support of gold or anything else.
Volatility -cryptocurrency prices may fluctuate violently. Bitcoin is the oldest and most stable cryptocurrency. It has proven that the deviation of each hour is close to 1%. Compared with other investment, this deviation is high. Some digital currencies have a deviation of 7% or 8% per hour, which makes it risky to buy them.
Cryptocurrency fraud -Like any financial transaction or investment, there are people who try to deceive you the risk of fake cryptocurrency investment. Always do your research.
The market is adopted -although the use of cryptocurrencies is rising, the market adoption rate is still very low. It may be difficult to spend if you need to do so.
Liquidity -extracted funds from cryptocurrencies may encounter some difficulties, which makes lack of liquidity a problem of some investors.
We should notice that volatility is the risk of any stock investment. The stock market is constantly changing, and world events and other factors may lead to the rapid rise or decline of stock value.
A good way to buy cryptocurrencies is to buy a small amount first, don't look at it every day, unless you have a high ability to withstand risks. This is a new type of asset category. As of March 2022, the market value exceeded $ 2 trillion. It is meaningful to include it into your investment portfolio, but it must be cautious.
How do beginners invest in blockchain technology?
If you want to invest in blockchain technology, there are some steps here to help you understand how beginners start blockchain investment.
1: Understand blockchain technology
You don't need to be an expert in blockchain technology, but we do suggest that you first understand the history of blockchain technology, the working principles of the technology, and its potential use before choosing investment. A solid knowledge foundation will make you a more successful investor.
2: Keep in mind risk
As we mentioned above, there is a major risk of investing in blockchain technology and cryptocurrencies. Cryptocurrency itself is a new asset category, and its volatility makes it a venture capital. The same risk is also applicable to investment in companies directly engaged in cryptocurrency transactions. It is important to enter the blockchain and cryptocurrency investment with the correct risk mentality.
3: Study a stock before purchasing
Anyone who wants to invest in encryption or blockchain technology should know the importance of research, which is suitable for any stock investment. The risk of buying any company's stock is that if the company goes down, you will lose your investment. Thousands of cryptocurrencies are available for purchases, and some of them will undoubtedly disappear.
If you decide to invest in individual companies, be sure to conduct in -depth research on them. Many large companies have begun to use blockchain technology, including Wal -Mart and Amazon. Compared with buying stocks for startups, the risk of buying stocks for mature companies is small. Using investment applications can help you find the information needed for stock selection.
Highly returned blockchain investment
When considering blockchain investment, the most often thought of cryptocurrency. However, it also has practicality in other fields, such as stocks, ETFs, startups, etc. They promise higher return on investment (ROI), less related risks and speculation.
Blockchain company stock
Blockchain companies are a relatively broad term, including companies that specialize in blockchain products and services, as well as companies that only implement the technology in their operations. Blockchain companies' stocks are similar to ordinary stocks and are widely considered to be one of the safest ways of investment.
Most companies specializing in development of blockchain products and services are relatively new markets. Investing in these companies are considered high -risk and high returns. The smaller risk choice is to use blockchain technology as a part of its business operations, such as Fedex, IBM or Microsoft.
Exchange traded funds (ETF)
ETF is an investment fund traded on a stock exchange, similar to stocks. Simply put, ETF can be regarded as a stock basket that satisfies specific targets. Similarly, the Blockchain ETF owns public business shares in companies with blockchain products and services or blockchain technology support.
ETF is a brand new emerging investment field. Behind ETF has a professional management team that actively trades and manage stocks. This is to a certain extent for the tedious decision -making process. ETF cost is low, easy to buy, and provides diversification of reducing risks.
With the widespread use of blockchain technology, the value of ETF may increase. Before investing in the blockchain ETF, you must study the options and compare their market parameters.
Digital assets and cryptocurrencies
Cryptocurrencies are the most common ways to invest in blockchain, and they are quite simple. It is enough to open an account on cryptocurrency exchanges such as Coinbase or Gemini and start transactions. Due to speculative volatility, there is a high risk of investing in cryptocurrencies.
Digital asset investment is a wider field. From gold to art to real estate, everything can be used to become digital assets through the tokenization process. The tokens are allowed to convert anything valuable to digital token existing on the blockchain.
For example, suppose you are a art investor, but there is no enough funds to purchase artworks worth $ 1 million. A art dealer transformed this art token to 100 tokes and valued at $ 10,000 per token. By buying two of them, you can now have 2% of artworks. Blockchain always guarantees ownership proof and your investment is safe.
Blockchain startup company
Since many blockchain companies have not reached the public offering level, the more feasible profit method is through angel investment. Angel investors are usually the first batch of people to provide funds for startups and get company equity as a return.
Innovative startups using blockchain technology regularly appear in the market. Generally, these startups cannot achieve the value of commitment and no longer exist in the first three years. However, those successful people usually become very valuable and become an excellent opportunity to get a good return on investment.
There is a way to earn cryptocurrencies by making useful mining and contributing to the blockchain, such as Bitcoin. The main reason for investing in cryptocurrency mining is to obtain tokens as verifying blocks and add it to the blockchain. In other words, cryptocurrencies are a kind of incentive to inspire people to support, legalize and monitor the blockchain network.
Miners who discovered the hash problem solutions first received the award to the tokens. Mining is a probability game. Becoming the first opportunity to solve the hash problem is related to the total mining ability on the Internet. Investment more computing power can improve the opportunity to get returns.
Due to the relatively high costs related to mining (computing equipment, electricity bills), investors can participate in the so -called mining pool, and a group of miners join their computing power and share rewards. The return on investment in cryptocurrency mining depends on the actual cost of mining and the mining computing power involved.
Ho and shovel investment is a term created during the California gold rush hot period. During this period, Ho and shovel manufacturers made more money than gold miners themselves. This is a strategy that promotes the investment of products and services rather than the ultimate output itself. It is usually considered a small risk strategy because you don't have to endure market risks.
As far as the blockchain is concerned, this means any other mechanism required to invest in infrastructure, software or blockchain operation. For such investment, you can choose to purchase stock options or invest in startups. Some of the most popular software picks in the market are IBM and Amazon, and the successful hardware pick is Bitmain and NVIDIA.
Is blockchain stock a good investment?
Yes, the following will be introduced in detail to the most worthwhile company stocks, hoping to help your investment.
1. Riot blockchain (RIOT)
Market value: $ 788.9 billion
Stock price: $ 6.21
Dividend yield (%): 0 yield per share per share
(EPS): $ 0.19
Blockchain attention: 5
Riot Blockchain, INC is a Bitcoin mining company headquartered in the United States. It focuses on expanding its mining business by increasing Bitcoin mining hash rate.
The company is listed on Nasdaq with a stock code of RioT and formerly known as BIOPTIX. It was renamed Riot Blockchain in 2017 and changed its business direction to push the stock price to the level of record at the time.
In the first quarter of 2022, Riot's mining revenue soared from US $ 23.2 million in the same period in 2021 to a record of $ 57.9 million, because the company produced a record of 1,405 BTC, which was almost three times the first quarter of 2021.
Bitcoin mining stocks such as Riot Blockchain follow the price of Bitcoin. If Bitcoin soars, the price of Riot Blockchain will rise. If Bitcoin depreciates, Riot Blockchain will also depreciate. However, as of September 27, the transaction price of Riot Blockchain was lower than $ 7 per share. Therefore, for most people, this is a reasonable investment, and analysts give them a "strong buy" rating.
2. Coinbase (coin)
Market value: $ 17.5 billion
Stock price: $ 66.69
Dividend yield (%): 0 yield per share per share
(EPS): $ 9.78
Blockchain attention: 5
Coinbase Global, INC is listed on Nasdaq, the stock code is Coin, operating the largest cryptocurrency exchange in the United States, processing about $ 1 billion per day.
Although the spot trading platform is the flagship product, Coinbase also provides other cryptocurrency -related services, including cryptocurrency mortgage borrowings, credit cards using cryptocurrencies, non -alternative tokens (NFT) solutions, income products and intangible homogeneous homogeneous quality Products. Provide enterprises and other online cryptocurrency custody solutions.
As of today, Coinbase has nearly 100 million verified users from more than 100 countries.
The company was founded in 2012 by former Airbnb engineer Brian Armstrong. It was listed on Nasdaq through direct stocks in April 2021.
Coinbase Global, Inc. (Nasdaq: Coin) is an excellent investment opportunity for investors who want to contact the cryptocurrency and blockchain industry. The company has become the leader of the industry, and its mission is to create an open financial system for the world. Coinbase Global, Inc. (Nasdaq's stock code: Coin) is in a favorable position and can benefit from the development of digital currency and blockchain technology, because the company has established itself as the most trusted and safest figure One of the currency exchanges. Coinbase Global, Inc. (Nasdaq's stock code: Coin) is among the best in the currently worth buying blockchain stocks.
3. OverStock (OSTK)
Market value: $ 1.38 billion
Stock price: $ 30.85
Dividend yield (%): 0 yield per share per share
(EPS): -D $ 7.99
Blockchain attention: 4
Online retailer Overstock is a pioneer of Bitcoin and blockchain.
It is one of the first batch of Bitcoin companies in 2014, and has since developed into a de facto blockchain company.
Through its subsidiary Medici Ventures, it has become the main investor of the blockchain company and launched the token -based securities trading platform TZERO.
OverStock is an Internet retail company and is one of the earliest companies that accept Bitcoin as a payment method. In 2018, the company launched TZERO, a security token trading platform, allowing investors to trading tokens. OverStock also founded Medici Ventures, a company that invests in blockchain companies that invest from finance to agriculture. Medici Ventures now has Grainchain's $ 2.5 million shares. Grainchain is a agricultural blockchain company that tracks production and distribution.
Market value: $ 126.5 billion
Stock price: $ 141.18
A dividend yield (%): 4.67 income per share
(EPS): $ 6.09
Blockchain attention: 3.5
IBM has become the main participant in the field of corporate blockchain solutions.
The technical giant headquarters in New York provides a blockchain service (BAAS) solution and has participated in a series of DLT tests worldwide.
IBM (New York Stock Exchange code: IBM) is progressing slowly in software and Internet services that adapt to today's leading markets, but it will bet the IBM blockchain platform will help improve efficiency and reduce risks. IBM is stable, so if you want to get involved in the blockchain pond, it may be a good starting point. Despite recent fluctuations, analysts still rated IBM shares as "buy".
5. Microsoft (MSFT)
Market value: $ 2.02 trillion
Stock price: $ 270
A dividend yield (%): 0.92 yield per share
(EPS): $ 9.58
Blockchain attention: 3
With its cloud -based Azure blockchain, the service platform has become another main participant in the blockchain industry.
In 2015, Microsoft took the lead in launching cloud -based blockchain solutions facing the corporate platform, and since then participated in a wide range of DLT tests worldwide.
In addition, Microsoft has begun to connect other platforms and software to its blockchain solution so that users can transmit data from these platforms to the cloud, and then transmit them from there to the blockchain.
The above introduces whether investment blockchain stocks are a good way of investment. There are many ways to invest in the blockchain, such as buying blockchain companies and ETF stocks, and starting corporate enterprises to invest angel investment, transaction cryptocurrency and tokens assets, shovel strategies and encrypted mining. Some of these opportunities are at high yields with high risk factors, and some of them are at a gentle level of risk and require long -term investment.