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“The stock market is a device to transfer money from the impatient to the patient.” - Warren Buffett
“So is the crypto market.” - Bitcoin Market Journal |
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In today's issue:Many people believe the only way to invest in the booming blockchain industry is to buy digital currencies and crypto assets, but there's another way to build wealth.
Investors can buy stock in traditional technology companies that invest heavily in blockchain.
In today's edition, we’ve updated our top picks for best blockchain stocks based on past performances and the future market outlook. Read on. |
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| | | Must Read Today's most important story for crypto investors. |
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In another piece of good news for followers of our Future Winners Portfolio, it looks like Uniswap (one of our top investments) may soon be deploying to BNB Chain (another of our top investments).
It's still in the proposal stage, but 80% of the Uniswap community voted in favor, which makes it likely that BNB Chain will be supported in the future. Read the full proposal here.
Reminder that Uniswap was originally built on Ethereum and has since been expanded to Polygon, Arbitrum, and others. BNB Chain would represent an entirely new market, not to mention a great deal of additional liquidity.
The proposal estimates a 5-7 week timeline for expanding to BNB Chain if and when the final decision is made to go forward. We're bullish on both UNI and BNB, and we see this as good news for both (in the short and long term). |
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| Best Blockchain Stocks, Rated and Reviewed for 2023 by Anatol Antonovici |
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Many people believe the only way to invest in the blockchain industry is to buy digital currencies and crypto assets, but there's another way to build wealth.
Investors can buy stock in traditional technology companies investing heavily in blockchain. In this article, we’ll review our top picks for blockchain stocks (which we call “block stocks”). |
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IBM (IBM)
IBM has established itself as a major player in the enterprise blockchain solutions space.
The New York-based technology powerhouse provides a Blockchain-as-a-Service (BaaS) solution and has been involved in many DLT trials across the globe since 2017.
IBM’s permissioned blockchain solution has been implemented by dozens of companies across various industries including banking and financial services, supply chain, healthcare, and government. The tech giant offers industry-oriented solutions like blockchain transparent supply (designed for supply chain management), and IBM Food Trust (a blockchain-based solution that benefits participants in a food ecosystem).
Some of the companies implementing IBM’s blockchain solutions are: Renault – the French automaker built the XCEED blockchain project used to process millions of automotive compliance documents. IPwe – the global IP platform uses IBM’s blockchain and Watson AI solutions to tokenize patent assets and churn big data. The Home Depot – the company gains real-time visibility into its inventory throughout the shipping and receiving processes.
Despite IBM's success with blockchain, some of the company’s major DLT projects have shown signs of infeasibility. IBM and shipping giant Maerskannounced in November 2022 their joint blockchain platform TradeLens would be shut down at the beginning of 2023. The platform requires full global industry collaboration, which has not been achieved. (BMJ Score: 4.5) |
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J.P. Morgan (JPM)
J.P. Morgan is the largest investment bank in the world. While its core business is banking, the Wall Street giant has also been heavily involved in the development of new financial technology.
J.P. Morgan’s main venture into blockchain technology was its enterprise-ready disunited ledger platform Quorum, which provides “high speed and high throughput processing of private transactions” on a permissioned blockchain.
The banking giant sold Quorum to ConsenSys in 2020 and launched its proprietary blockchain platformONYX a few months later. The inaugural project on ONYX was its proprietary coinJPM Coin, which acts as a USD-based stablecoin used for payments.
JPM Coin leveraged ONYX’s coin systems, but the platform offers three other solutions: Liink – a bank-led payment solution that uses Confirm, a global account validation service meant to improve cross-border payments. Onyx Digital Assets – a trading platform for digital assets. Blockchain Launch – an enterprise-oriented solution helping companies implement blockchain technology for various use cases.
Besides its proprietary blockchain solutions, JPMorgan has explored decentralized finance (DeFi) applications. In November 2022, the bank conducted its first-ever cross-border transaction on DeFi. The trade was facilitated by the Monetary Authority of Singapore’s (MAS) Project Guardian. (BMJ Score: 4.5) |
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Microsoft (MSFT)
Microsoft has the potential to become another major player in the blockchain industry. Its blockchain journey started with the launch of the cloud-based Azure Blockchain-as-a-Service platform in 2015. Microsoft was the first to offer a cloud-based blockchain solution for businesses and was involved in a wide range of DLT trials across the globe.
However, the tech giant shut down the service in September 2021 and has instead encouraged its partners to migrate to ConsenSys’ Quorum platform, which was acquired from JPMorgan.
Since then, Microsoft has invested in multiple blockchain companies. In 2022, it took part in ConsenSys’ $450 million series D round. As for the company itself, it has been focusing on theMetaverse trend more than blockchain in recent months. (BMJ Score: 4.5) |
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Goldman Sachs (GS)
Goldman Sachs is one of Wall Street’s leading investment banks.
Even though CEO Lloyd Blankfein has been regarded as a crypto skeptic, Goldman Sachs has been investing heavily in blockchain startups like Axoni, BitGo, Circle, and Veem. It has even shown interest in crypto. For instance, it launched a bitcoin derivatives offering for a select group of clients several years ago.
In anop-ed piece published in the Wall Street Journal, Blankfein said blockchain was more than crypto and had a bright future. Goldman also has adedicated page listing the benefits of the technology.
In 2022, the bank got even closer to blockchain and crypto. For example, it allowed a borrower to use bitcoin as collateral for a cash loan andoffered over-the-counter (OTC) crypto options trading in partnership with Galaxy Digital.
In January 2023, Goldmanlaunched its new digital asset trading platform GS DAPTM, which was developed with the help of Digital Asset’s Daml smart contract language and its blockchain protocol Canton. The European Investment Bank became the first user of Goldman’s new platform, issuing the first fully-digital bond on blockchain.
Meanwhile, Goldmanis looking to spend millions on buying crypto firms at a bargain after the collapse of FTX. (BMJ Score: 4.5) |
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Nvidia (NVDA)
Nvidia, listed on the NASDAQ as NVDA, is another major semiconductor and GPU manufacturer competing with AMD and Intel. Nvidia is a leader in artificial intelligence (AI) hardware and software.
While Nvidia manufactures a wide range of products, the crypto community is interested in it for its mining processors, including GPUs.
It seems the impact of crypto mining on the company’s revenue has been larger than it previously admitted. In May 2022, Nvidia paid $5.5 million to settle accusations from the U.S. Securities and Exchange Commission (SEC) that claimed the company had failed to inform investors about how much GPU revenue relied on crypto miners.
Still, Nvidia has GPUs that have been designed specifically for crypto mining. One example is NVIDIA Cmp Hx, which was built for Ethereum mining, though that makes less sense now that the blockchain network has adopted the proof of stake (PoS) algorithm. (BMJ Score: 4.5) |
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MasterCard (MA)
New York-based MasterCard is the world’s second-largest payment processor after Visa. The company has been involved in several blockchain and crypto initiatives and was an early supporter of the technology.
MasterCard’s Crypto Card Program helps businesses and merchants accept digital currency for everyday transactions. The company also offers crypto consulting services and is helping central banks with the design of central bank digital currencies (CBDCs).
The Start Path Crypto is a global engagement program that supports blockchain, crypto, and digital asset startups trying to jumpstart projects. In November 2022, the company’s crypto acceleratoradded seven more startups, some of which focus on Web3 solutions.
In October 2022, MasterCard announced the launch of Crypto Source, a new program to let banks offer crypto trading solutions to their clients. (BMJ Score: 4.5) |
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Intercontinental Exchange (ICE)
The Intercontinental Exchange (ICE), which owns the New York Stock Exchange (NYSE), is one of the most interesting financial stocks that offer blockchain exposure.
In 2018, ICE launched a bitcoin futures trading platform called Bakkt. This is the first exchange to offer bitcoin futures with physical delivery. Bakkt was spun off as a separate public company.
Besides launching Bakkt, ICE made a strategic investment in blockchain firm tZERO at the beginning of 2022. As part of the investment, ICE’s chief strategy officer David Goone became CEO of tZERO and joined the company’s board of directors. (BMJ Score: 4.0) |
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Investor Takeaway
Usually, the most popular stocks are blue chips. They tend to attract the most investors. Nevertheless, some small-cap stocks can see higher trading volumes than blue chips, especially if the latter are perceived to be overvalued.
For example, IBM’s average daily volume is 4.5 million shares, while RIOT’s average daily volume is over 15 million. It happens that IBM’s high price of $140 doesn’t attract retail investors as much as RIOT does (even though IBM’s float is almost 900 million shares, which is over five times as much as that of RIOT).
That being said, top blockchain stocks usually have attractive prices for retail investors. They're popular, and they have strong fundamentals. Blue chips remain our safest bets, but more enterprising investors can look at COIN, RIOT, and AMD. |
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Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It's created by John Hargrave, Nick Marinoff, Steve Walters, Anatol Antonovici, Ben Burn, Preetam Kaushik, and Daniel Joel.
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