Blockchain technology and stocks don’t seem that important at first glance.
At its heart, blockchain is simply a distributed ledger shared across computer nodes. However, immutability is the quality that makes blockchain technology special. The blockchain is a decentralized record of transactions that cannot be altered. That means data can’t be changed, and this is the reason major industries are adopting it. Greater security and decentralized power are immensely valuable.
Investors who like the technology might not necessarily like crypto. For them, blockchain stocks represent an investment in forward-thinking tech without the inherent crypto volatility. Let’s take a look at a few stocks that represent exactly that.
Nvidia (NASDAQ:NVDA) is a company that begrudgingly maintains a strong connection to blockchain technology. It is absolutely one of the best stocks for investors seeking quick gains as 2023 has shown.
The firm dominates the generative AI space which has exploded this year. As a result, Nvidia shares have more than tripled. The market was well aware of Nvidia’s prowess as the stock doubled between early 2023 and mid-May. Then Nvidia let Wall Street know that instead of $7 billion in sales, the firm was expecting $11 billion in Q2 sales primarily due to AI.
So, growth is happening, but it has more to do with AI than blockchain. However, Nvidia’s chips have been applied to blockchain and crypto mining specifically. Nvidia was intent that those chips be used for gaming purposes and artificially constrained them for crypto purposes. Does the company like crypto? It doesn’t seem like it. Can Nvidia make you a lot of money and does it touch on blockchain? Definitely.
MicroStrategy (NASDAQ:MSTR) is one of the biggest blockchain stocks not because of its operations but because of its holdings. The company provides enterprise analytics software and doesn’t really touch on the crypto space in that regard.
However, the company is one of the largest backers of Bitcoin (BTC-USD) and held 152,333 bitcoins as of June 23. The firm has spent $4.17 billion in amassing that holding which equates to an average purchase price of $29,803. As I write this, Bitcoin is trading at $29,813, so MicroStrategy is up $10 per share. Something tells me the firm won’t sell and hasn’t held on this long to realize a meager $1.523 million win.
The strategy has been a bold one given that Bitcoin was trading for less than $17,000 late in 2022. The company uses Bitcoin as part of its debt structure. If Bitcoin increases in 2025-2026, it’s possible the firm could liquidate some of its holdings to satisfy debt while realizing a profit. If Bitcoin surges to its 2021 prices again, MSTR shareholders will benefit massively.
PayPal (NASDAQ:PYPL) is primarily known as a fintech stock that has been a pioneer in that space. The emergence of cryptocurrency has meant that fintech firms have adopted the leading edge tech to remain relevant.
For PayPal that means the ability to send and receive crypto through your PayPal account. PayPal is very clear about the risks of using its service for this purpose and notes that users should be very familiar with address types or risk losing their crypto. Users who want to send crypto from a PayPal account to an outside account will incur a fee for doing so and are limited to transferring $10,000 weekly.
PayPal notes the same general utility of the blockchain in democratizing financial services that most others note. What’s interesting about PayPal in this regard is that it hosts more than 400 million accounts in more than 200 countries. The company certainly has the resources to become a major player in the space if it so chooses. Its vast user base will certainly help.
On the date of publication, Alex Sirois 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.