- Mastercard (NYSE:MA): Fintech giant has launched two dozen cryptocurrency credit cards over the past year
- Riot Blockchain (NASDAQ:RIOT): Crypto mining company delivered strong top-line growth
- Silvergate Capital (NYSE:SI): Crypto bank’s management noted that a 1% increase in interest rates could result in a 60% boost in net interest income
With over 10,000 cryptocurrencies available, investors may find it difficult to choose the best digital asset for 2002. Yet, investing in blockchain stocks could potentially offer a safer and more lucrative path to gaining exposure to the crypto market.
Many on Wall Street regard blockchain stocks as gateway to the crypto space. They could easily benefit from the rising popularity of cryptocurrencies as well as the technology behind these digital assets. Analysts suggest that blockchain stocks currently carry more momentum than the broad technology sector in the short term.
A recent report by Grand View Research forecasts that the global blockchain technology market size will surpass $1.4 trillion by 2030. Such an increase would mean a compound annual growth rate of 85.9% from 2022 to 2030.
The blockchain stocks in our list are some of the best growth stocks to buy while they still trade at reasonable valuations. In addition, each one has a different angle of exposure to blockchain technology, which may prove helpful when building a diversified portfolio.
With that information, here are some of the best blockchain stocks to buy that offer exposure to the cryptocurrency market.
|RIOT||Riot Blockchain, Inc.||$11.85|
|SI||Silvergate Capital Corporation||$128.26|
Blockchain Stocks: Mastercard (MA)
The first blockchain stock is Mastercard (NYSE:MA), the second-largest payments processor company worldwide. It generates revenue from transaction fees every time its card is used physically or online. InvestorPlace.com readers are well familiar with its popular credit card brands, including MasterCard, Maestro and Cirrus.
Mastercard released fourth-quarter results on Jan. 27. Revenue increased 27% year-over-year to $5.22 billion. Adjusted earnings per diluted share grew 43% YOY to $2.35. Cash and equivalents ended the period at $9.9 billion.
The fintech name has launched 24 cryptocurrency-linked cards, including Gemini, Uphold, CoinJar and BitPay. Mastercard recently partnered with leading digital currency companies Amber Group, Bitkub and CoinJar to introduce the Asia Pacific region’s first crypto-linked payment cards.
In addition, management is working with crypto lender Nexo to launch the world’s first “crypto-backed” payment card. It is likely to appeal to a range of crypto enthusiasts.
MA stock has lost 2% year-to-date. Shares are trading at 34.6 times forward earnings and 18.8 times trailing sales. Meanwhile, the 12-month median price forecast for Mastercard is $434 per share. Also of note, the company is scheduled to release its Q1 earnings later this week. Investors are eyeing big news after the biggest U.S. banks reported that customer spending on credit cards surged in the period.
Riot Blockchain (RIOT)
Next up is Riot Blockchain (NASDAQ:RIOT), a Bitcoin (BTC-USD) mining company that develops, supports and operates blockchain technologies. It came into prominence in 2021 as the value of Bitcoin soared.
Riot announced 2021 annual results on March 16. Revenue increased 1,665% YOY to $213 million, compared to $12 million in 2020. Net loss narrowed to 8 cents per share, down from 30 cents per share in the prior-year quarter. Cash and crypto-assets ended 2021 at $472 million, up from $235 million a year ago.
The Bitcoin mining company benefited from the increase in the price of the cryptocurrency, as did many blockchain stocks. After all, it generates more than 85% of its revenue from mining. Riot also relies on hosting and engineering revenue, allowing third parties to mine Bitcoin using its infrastructure.
Riot Blockchain stock has declined 64% over the past year. Shares are trading at 20.8x forward earnings and 6.6x trailing sales. The 12-month median price forecast for RIOT stock is $45 a share.
Yet we should remind potential investors that volatile Bitcoin prices, soaring competition and crypto regulations could mean strong long-term headwinds for Riot’s financial prospects.
Blockchain Stocks: Silvergate Capital (SI)
Our final blockchain stock is Silvergate Capital (NYSE:SI), a cryptocurrency bank. It operates its own crypto trading network, the Silvergate Exchange Network (SEN), which facilitates money transfers for crypto market exchanges and institutions.
Silvergate Capital surprised investors with the Q1 results revealed on April 19. Net income came in at $27.4 million, up from $12.7 million a year ago. The number of digital currency customers exceed 1,500. At the end of March 31, 2021, it had been 1,104. SEN handled $142.3 billion in transfers in the first quarter of 2022, down 15%.
On the results, CEO Alan Lane commented, “We started off 2022 on a strong note, driven by the power of our platform and continued progress on our strategic initiatives.” Meanwhile, management estimates that a 1% increase in interest rates would lead to a 60% increase in its net interest income.
During the quarter, Silvergate also completed the acquisition of Diem Association, the crypto project launched by Meta Platforms (NASDAQ:FB). The transaction will help the bank launch its own stablecoin later this year.
Despite the growth prospects, SI stock has declined 12% YTD. Shares are trading 29.1 times forward earnings and 17.9 times trailing sales. Finally, the 12-month median price forecast for Silvergate Capital stock stands at $200 per share.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.