These investments offer exposure to blockchain. When you hear the word blockchain, chances are good that you think of Bitcoin.…
These investments offer exposure to blockchain.
When you hear the word blockchain, chances are good that you think of Bitcoin. After all, the cryptocurrency has already been making headlines in 2021, with volatility being a key concern. Its price soared to an all-time high of more than $64,000 in April before plummeting below $30,000 in July and slingshotting back around $50,000 in late August. But blockchain, the technology behind Bitcoin, is bigger than just cryptocurrency. The “blocks” in blockchain are chunks of data stored together. When a block is filled, it is “chained” to a new block, building a timeline of data that makes the information in the blockchain secure. That means these digital records are useful for companies involved in industries such as banking, health care, supply chain management and more. How can investors get in on the action with this new, potentially game-changing technology? Start by reading up on six of the best blockchain stocks and exchange-traded funds, or ETFs, to buy in 2021.
Square Inc. (ticker: SQ)
Square clearly believes in the future of blockchain technology. Under CEO Jack Dorsey, also Twitter’s chief, Square owns $400 million worth of Bitcoin and is developing a decentralized exchange for the cryptocurrency. Square, a mobile payments company that provides merchant transaction processing services and peer-to-peer money transfers via its Cash App, has been enjoying an excellent 2021. In the company’s latest earnings report, Square generated a quarterly profit of $1.14 billion, up 91% year over year. Cash App saw 94% year-over-year growth, generating $546 million in profit.
Visa Inc. (V)
Credit card companies have been quick to realize the potential of blockchain technology, but Visa was one of the first to do something about it, with proactive development of innovative payment products. One of its latest investments is becoming a strategic partner in Blockchain Capital, a venture capital firm investing in blockchain-enabled technology. This investment, along with a partnership program called Fintech Fast Track Program, where Visa collaborates with startups and provides resources to help move money quickly and securely to scale their businesses, shows its commitment to becoming one of the biggest players in the growing blockchain industry. Perhaps the most interesting application of Visa’s investments in blockchain has been by connecting credit and debit accounts to cryptocurrency wallets such as Coinbase. By allowing Visa customers to convert cryptocurrencies into cash, or using cryptocurrency as a rewards payment, Visa helps to legitimize the technology — and get a cut of the action.
Advanced Micro Devices Inc. (AMD)
AMD offers central processing unit and graphics processing unit technologies to make blockchain transactions fast and increase security. The chip manufacturer has a strategic partnership with Blockchain Gaming Alliance, a company promoting blockchain in the gaming industry, to further the development of new blockchain-powered gaming platforms. Other AMD partnerships include leading blockchain providers such as Robot Cache, the first online gaming marketplace on the blockchain, and Ultra, the first entertainment platform that’s powered by blockchain. AMD is at the cutting edge of blockchain transformation, offering computing technology to a variety of blockchain-powered services in a variety of industries. Other key AMD partnerships include Halo Holdings, ConsenSys and W3bcloud, which are working together to build out cloud computing infrastructure based on the blockchain. These partnerships are developing software used for government, commercial projects and decentralized applications, creating advancements in blockchain services.
International Business Machines Corp. (IBM)
IBM recognizes that blockchain technology is transformative for businesses. The company established the IBM Blockchain in 2017 with an eye on building out a suite of blockchain services. It’s the industry’s leading blockchain services provider, offering consulting for companies to integrate blockchain and create efficiency in their businesses. Today, it includes more than 500 blockchain projects in the works. Among these are Food Trust, a way for companies such as Walmart Inc. (WMT) to trace their food supply chain, and World Wire, an international digital payments network. IBM is taking a hard look at the technology and betting that it can figure out a profitable angle and is one of the few value plays in the blockchain sector.
Siren Nasdaq NexGen Economy ETF (BLCN)
Blockchain’s growing acceptance among companies around the world means the technology has traction. But it’s still a smart move to hedge your bets by spreading your investment around. One way to do this is by investing in a fund that is focused on blockchain, such as the Siren Nasdaq NexGen Economy ETF, which aggregates companies from a variety of sectors that research, develop and support blockchain technology. The fund has 69 holdings, ranging from blue-chip companies such as Baidu Inc. (BIDU) and PayPal Holdings Inc. (PYPL) to smaller companies such as Galaxy Digital Holdings, giving investors a big basket of stocks to provide a cushion against a sudden turn in the use of blockchain technology. The fund is up more than 30% in the last year, and the more companies begin to use blockchain, the higher Siren Nasdaq NexGen Economy could go.
Amplify Transformational Data Sharing ETF (BLOK)
For investors looking for another diversified blockchain play, the Amplify Transformational Data Sharing ETF has you covered. This actively managed ETF invests at least 80% of the fund’s net assets in companies actively involved in the development and use of blockchain technologies. BLOK invests in companies across a wide variety of industries, with transactional and crypto mining as the fund’s top blockchain industry allocations — areas that are making leaps in transforming industries using blockchain technology. Some of the fund’s top 10 holdings include Microstrategy Inc. (MSTR), PayPal and Square. Investors get a piece of 45 companies focused on blockchain, a strategy that has returned 150% since the ETF’s inception in 2018. Many people believe investing in blockchain can be risky — and frankly, they might be right. That’s why an ETF like BLOK helps diversify your investment in this revolutionary technology.
Six best blockchain stocks and ETFs to buy:
— Square Inc. (SQ)
— Visa Inc. (V)
— Advanced Micro Devices Inc. (AMD)
— International Business Machines Corp. (IBM)
— Siren Nasdaq NexGen Economy ETF (BLCN)
— Amplify Transformational Data Sharing ETF (BLOK)
More from U.S. News
6 of the Best Blockchain Stocks and ETFs to Buy in 2021 originally appeared on usnews.com
Update 08/31/21: This story was published at an earlier date and has been updated with new information.