Bet on these blockchain stocks poised to soar as blockchain expands its role in tech and finance
Blockchain-related stocks are fast becoming a must-have investment for smart investors.
As the backbone of cryptocurrency transactions, blockchain technology offers unparalleled transparency and security in record-keeping. Though traditionally known for its role in cryptocurrencies, its usefulness spans a variety of technological fields and industries, effectively increasing the integrity of transactions across multiple sectors within a decentralized framework.
Moreover, given analysts’ high predictions, blockchain is likely to be one of the most explosive investment sectors in the coming years. According to a report by Fortune Business Insights, the blockchain sector could grow at a CAGR of 52.8% over the next eight years. Moreover, a recent survey by cryptocurrency exchange Kraken showed a growing preference for investing in cryptocurrencies over traditional investment options such as stocks and real estate.
That being said, these three blockchain stocks have the potential to generate superior long-term gains while aligning with rapid technological advancements in their niche fields.
Blockchain Stocks to Buy: Mastercard (MA)
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Mastercard (NYSE:MA) is a giant in the payment processing space that continues to thrive amid the transition to a cashless economy. Despite the challenges posed by the blockchain industry, Mastercard has aggressively adopted and integrated the technology to enhance its services and defend its market position.
Mastercard is leading the way in the blockchain space through its innovative Multi-Token Network (MTN). The robust platform makes transactions easier and more secure through a unique tokenization methodology. Tokens are like a digital version of a bank account, storing money in a safer and more reliable way.
Additionally, Mastercard is evolving into a hotbed of DeFi app development, enabling developers to create unique and powerful applications. Its powerful platform offers a range of APIs and tools covering a full range of services from payments to security. The partnership with MoonPay highlights its commitment to blockchain and Web3, enhancing user trust and engagement across multiple industries.
Block (SQ)
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Fintech giant The Block (NYSE:SQ) is one of the most popular financial services and mobile payments companies. The company is known for its innovative applications such as Cash App, which attracts over 50 million users worldwide. Over the past few years, the company has shifted its focus to blockchain through significant investments in Bitcoin (BTC-USD) and becoming a DeFi app development platform.
The Block has invested a massive $220 million in Bitcoin, which has grown to over $573 million according to the company’s Q1 financial results. BTC’s explosive growth in Q1 has boosted The Block’s total BTC-related profits to $80 million. The company also announced plans to effectively reinvest 10% of BTC profits back into the company. Additionally, the company’s year-on-year (YOY) growth in profitability metrics has surpassed its historical average, indicating impressive growth.
Additionally, recent ventures such as Bitkey, the company’s first bitcoin wallet, now allows Cash App users to transact directly with Coinbase Global (NASDAQ:COIN) Additionally, the company launched a developer platform called TBD to facilitate the creation of decentralized apps.
Riot Platform (RIOT)
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Riot Platforms (NASDAQ:RIOT) is one of the most powerful companies in the BTC mining space, leading the industry with energy-efficient ASIC mining equipment. Given the strength of BTC prices in Q1 and much of 2023, the company is growing its revenue base at an encouraging pace. However, the stock price has not kept up, with Riot shares down over 30% year-to-date (YTD). With interest rate cuts on the horizon, the company’s stock is undervalued and has great upside potential going forward.
The company is financially strong, reporting a massive cash buffer of $688 million in Q1, along with an additional $606 million in BTC assets. With this large cryptocurrency reserve and a debt-free balance sheet, Riot is well positioned to invest aggressively in mining capacity.
Going forward, Riot’s hash rate capacity is expected to increase from 12.4EH/s as of Q1 to 31.5EH/s by the end of the year. Such strategic scaling is expected to significantly increase revenue and EBITDA in 2025. Thus, the company’s healthy financial position, aggressive growth targets, and favorable market outlook make RIOT stock an attractive choice.
As of the date of publication, Muslim Farooq did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author in accordance with InvestorPlace.com’s Publishing Guidelines.
On the date of publication, the editor in charge did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Muslim Farooq is an avid investor and optimist at heart. A lifelong gamer and technology enthusiast, he has a particular interest in analyzing technology stocks. Muslim holds a Bachelor of Science in Applied Accounting from Oxford Brookes University.
