If you’re interested in learning how to capitalise on the revolutionary technology behind the Bitcoin network called blockchain, then you are in the right place!
In this article, we go through what the technology is, some of the best blockchain companies you need to know about and five top blockchain stocks to invest in this year.
Top 5 Blockchain Companies to Invest in
Below is a quick-fire list of the top seven blockchain companies to invest in. Be sure to read on to learn more about why the companies make the list and how to invest in them.
- Mastercard (MA)
- Amazon (AMZN)
- NVIDIA Corp (NVDA)
- IBM Corp (IBM)
- Riot Blockchain (RIOT)
Each of these companies uses blockchain technology in different ways. Some of them offer blockchain services to their customers, some are focused on building new products from the blockchain network and some are focused on cryptocurrency where blockchain is the underlying framework.
While blockchain technology has been talked about widely in the media it is still in its infancy. That makes some of these blockchain companies well-positioned to take advantage of the long-term growth the technology provides which is now being adopted by businesses and governments all over the world.
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Best Blockchain Stocks to Buy: Research & Analysis
Below we go through the top five blockchain stocks to buy for this year. It’s worthwhile noting that some blockchain companies’ share price volatility can be quite high. This is because cryptocurrencies are notoriously volatile. So, make sure you do some in-depth research and use the list below as a starting point and always be mindful of the risks of building an investing portfolio!
1. Mastercard (MA)
Global payments and technology company Mastercard consistently ranks among the top ten blockchain patent holders in the world. In 2020, the company made the Forbes Blockchain 50 list and is considered one of the top blockchain companies to invest in for some analysts.
The company is already using its blockchain technology, the Mastercard Provenance Solution, to improve food supply chains all over the world and has created partnerships with GrainChain and Wirex.
The latter is a licence to become the first native cryptocurrency platform allowed to directly issue card payments. The company continues to expand its offering and will be one of the top blockchain stocks to watch this year.
Source: Admirals MetaTrader 5, MA, Weekly – Data range: from 1 Jun 2008 to 23 Dec 2021, performed on 23 Dec 2021 at 1:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
In the long-term, weekly chart of Mastercard’s share price above it’s clear to see the uptrend that has developed. While there has been some significant dips in the past, the price has rallied back up strongly.
Mastercard is also set to benefit from the world moving towards a more cashless society, further supporting the share price.
2. Amazon (AMZN)
Amazon is a company that most likely needs no introduction. Not only do they operate the world’s largest e-commerce platform, but they also lead the race in cloud computing services through Amazon Web Services (AWS). This division has now launched Amazon Managed Blockchain which allows users to build and manage their own blockchain networks.
In fact, the newly launched Chia cryptocurrency (XCH) can now be mined on the Amazon Web Services platform. While blockchain services only account for a small portion of Amazon’s revenue, it’s certainly a growth sector for the company – making it one of the top blockchain companies to watch.
Source: Admirals MetaTrader 5, AMZN, Monthly – Data range: from 1 Apr 2011 to 23 Dec 2021, performed on 23 Dec 2021 at 1:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
In the long-term monthly chart of Amazon’s share price shown above, it’s clear to see the long-term uptrend. However, so far this year, the stock price has remained range based with price struggling to break above ~$3,767.00.
This is in line with a broader struggle among the tech giants which have had to navigate a proposed digital tax that is likely to affect their bottom line significantly. Having said that, Amazon is a leader in nearly everything it focuses on so it’s going to be a blockchain stock to watch for the future.
3. NVIDIA Corp (NVDA)
Most investors would have heard of the NVIDIA Corporation. However, not many may know that NVIDIA design graphic processing units (GPUs) that are widely used in the cryptocurrency mining industry, as well as gaming, mobile computing and autonomous driving – making it one of the top blockchain stocks to watch.
NVIDIA’s graphics are so popular with cryptocurrency miners that the company’s 3000 range has been known to sell on the black market for prices 300% higher than retail!
While, most miners of Ethereum are moving away from the proof of work consensus algorithm to proof of stake – limiting the use of graphics cards in the long run – most analysts believe there is still plenty of demand left for NVIDIA’s graphic cards.
Source: Admirals MetaTrader 5, NVDA, Weekly – Data range: from 10 Dec 2017 to 23 Dec 2021, performed on 23 Dec 2021 at 1:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
In the long-term weekly chart of NVIDIA’s share price shown above, it’s clear to see the long-term uptrend. While there was a significant dip in 2018, the share price has recovered extremely well.
The stock is already up to record highs of nearly 30% from the start of the year, while other tech stocks like Apple and Amazon are still trading under their respective all-time high price level.
This shows the underlying demand for NVIDIA’s products which is only likely to grow as more businesses and governments utilise blockchain technology and use blockchain companies for their services.
4. IBM Corp (IBM)
IBM was once a darling of the tech sector but has fallen back dramatically in recent years. The company has tried hard to reinvent itself by focusing on blockchain technology services through the launch of IBM Blockchain in 2017.
Currently, the company is managing more than 500 blockchain projects for a variety of different companies including Kroger, Walmart and World Wire. As more companies adopt blockchain technology, IBM is one of the blockchain stocks that could benefit.
Source: Admirals MetaTrader 5, IBM, Monthly – Data range: from 1 Apr 2007 to 23 Dec 2021, performed on 23 Dec 2021 at 1:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
As you can see from the monthly chart of IBM’s share price above, it’s had a very challenging time since 2013. However, over the past few years, the share price has stabilised into a trading range.
From a technical analysis perspective, if the share price can break through the descending resistance line drawn on the chart, then this could attract more buyers to the market.
However, this type of move would be more suited to value investing due to how depressed the share price. When it comes to picking blockchain companies to invest in, it’s worthwhile thinking about your timeline of investments. Are you more of a value investor or growth investor for example?
5. Riot Blockchain (RIOT)
Riot Blockchain is a Bitcoin mining company that supports the Bitcoin blockchain through large-scale mining operations in the United States. The company is currently focused on building energy-efficient mining operations as shown through its recent acquisition of the 300-megawatt Whinston facility in Texas.
According to some analysts, this would give Riot Blockchain the ability to output as much as 750 megawatts with a cost of just $0.025 per kilowatt per hour. This would be the lowest price in cryptocurrency mining giving the company a huge advantage among blockchain companies focused on this type of work.
Source: Admirals MetaTrader 5, RIOT, Weekly – Data range: from 21 Sep 2014 to 23 Dec 2021, performed on 23 Dec 2021 at 1:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
As you can see from the long-term weekly chart of Riot Blockchain’s share price above it is not for the faint-hearted investor. The stock price is extremely volatile and is often linked to the volatility of Bitcoin which has had a string of negative news this year.
What is Blockchain?
Blockchain is a decentralised technology system where the transactions made in digital currencies are recorded and stored in a linked computer network. The ‘block’ and ‘chain’ elements refer to the list of records called blocks that are chained together using cryptography, producing a distributed ledger.
This is why blockchain is also referred to as Distributed Ledger Technology (DLT).
How Does Blockchain Work?
The purpose of the blockchain is to record all of the exchanges of data. This record is known as the ledger. The exchanges of data recorded on the ledger are known as transactions.
Verified transactions are added to the ledger as a block. Each block has three elements:
- The data in the block.
- A randomly generated 32-bit whole number called a nonce.
- A 256-bit number attached to the nonce called the hash.
Miners can create new blocks on the chain through mining. While every block has its own nonce and hash, it also references the hash of the previous block in the chain.
This means that miners need to use specialised software to solve the complex math problem of finding a nonce that generates an accepted hash of which there are around four billion combinations that need to be mined before finding the right one.
This process makes it extremely difficult to manipulate the blockchain. Once a block is successfully mined and is accepted by the nodes on the network the miner receives a financial reward. Nodes are electronic devices that keep a copy of the blockchain and keeps the network running.
While blockchain technology is still in its infancy it is rapidly growing, garnering the attention of many investors. Some of the world’s most well-known companies such as Amazon and Mastercard have adopted the technology and are positioned to be some of the top blockchain stocks to focus on this year.
Finding companies that already have a strong presence but can potentially boost their growth through offering blockchain services, could be an interesting way to diversify your portfolio.
With Admirals, you can choose the best blockchain companies to invest in with low commissions and a ton of extra services and features.
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