In the dynamic world of investing, keeping an eye on innovative sectors is paramount. Few sectors have garnered as much attention as blockchain technology. Blockchain stocks are often overshadowed by the high-flying crypto coins they underpin. They present a fascinating and potentially lucrative investment frontier for the savvy investor.
While everyone’s chattering about the latest Bitcoin (BTC-USD) rally or Ethereum (ETH-USD)’s newest update, many overlook the infrastructure that keeps these systems running: the best blockchain stocks. With an array of options flooding the market, how does one choose? How can one decipher the top blockchain stocks from the mere pretenders?
Let’s embark on this exploration together, diving deep into the realm of blockchain, ensuring your portfolio isn’t missing out on this technological revolution. After all, in the grand tapestry of investment opportunities, the threads of innovation often weave the most profitable narratives.
Coinbase (COIN)
Coinbase (NASDAQ:COIN), a blockchain titan, has been riding a spectacular wave with a year-to-date return of 133%. In the realm of top blockchain stocks, it’s not just the figures that stand out among the crowd. While the company reported a drop in revenue to $662.5 million in June 2023, marking a decline of 17%, the silver lining came in the form of its earnings per share. Defying analysts’ expectations, Coinbase reported earnings per share (EPS) of 50 cents against the anticipated -62 cents, a stunning surprise of 180%. Furthermore, the revenue beat the expectation by 11%, clocking in at $707.9 million.
Amid this financial landscape, Coinbase hasn’t rested on its laurels. In fact, the company’s Base Layer 2 network showcased its prowess by logging 1.88 million daily transactions, clearly outpacing its competitors. This achievement not only reaffirms Coinbase’s commitment to enhancing user experience, but also to infrastructure robustness. Moreover, the strategic decision to take an equity stake in USDC-issuer Circle and the upscale of its cash tender offer for notes to $180 million further showcases Coinbase’s strategic foresight. Additionally, its latest foray into the institutional sphere with the Web3 wallet launch further amplifies the company’s ambition to remain at the forefront of the crypto exchange arena.
However, with the cryptocurrency volume on exchanges dipping to its lowest for the year in August, there are whispers in the financial corridors questioning the sustainability of Coinbase’s 133% rally. Mizuho’s suggestion of a potential “reality check” looms large.
Yet, given the company’s innovative strides and recent milestones, Coinbase seems poised to weather any challenges. It continues its ascent in the ever-evolving world of blockchain stocks.
Riot Blockchain (RIOT)
Riot Blockchain (NASDAQ:RIOT) has undeniably etched its position among the best blockchain stocks this year, boasting an enviable 210% year-to-date return. As Bitcoin surges ahead, anticipating a Federal Reserve rate pause, Riot Blockchain stands distinctively poised to capitalize.
Notably, while the cryptocurrency volume on exchanges experienced a trough in August, it didn’t deter Riot’s strategic maneuvers. The company brilliantly leveraged energy credits, showcasing an innovative approach to power its Bitcoin mining operations. Moreover, despite a 19% decline in Bitcoin production in August compared to July, Riot Blockchain’s recent financials reveal a Q2 loss that was narrower than anticipated — a silver lining attributed to an uptick in Bitcoin production.
Diversification is key for top blockchain stocks navigating the current crypto ecosystem in today’s dynamic market. Interestingly, JPMorgan (NYSE:JPM) notes that prominent Bitcoin miners are venturing into alternative business areas. This includes potentially Riot, shedding some dependency on cryptocurrency. This shift aligns with Riot’s forward-thinking ethos and its massive expansion in Bitcoin mining, affirming our optimistic outlook on its trajectory.
Altogether, Riot Blockchain stands out in the grand tapestry of blockchain stocks, exemplifying how strategic positioning and a dash of innovation can lead to significant rewards. While Bitcoin’s narrative continues to evolve, one thing remains certain. Riot is not just partaking in the blockchain revolution — it’s leading it.
PayPal (PYPL)
Amidst the surging interest in blockchain stocks, PayPal Holdings (NASDAQ:PYPL) presents an intriguing narrative. The company’s foray into the financial year wasn’t met with overwhelming enthusiasm, recording a year-to-date return of -16%.
Yet, when diving deeper, there are glimmers of promise. The latest earnings unveil a tale of resilience and fortitude. In June 2023, PayPal reported a revenue of $7.29 billion, marking a 7% uptick year over year. Moreover, a staggering 402% increase in net income, reaching $1.03 billion, showcases its potential to navigate turbulent waters.
Noteworthy is the bold decision by PayPal to integrate stablecoin payments, signaling its intent to remain at the forefront of financial technology and innovation. However, it’s imperative to tread with caution. Analysts from MoffettNathanson have adjusted their stance to “market perform,” attributing this to a somewhat lackluster gross profit outlook. Soros Fund Management’s recent addition of PayPal to its portfolio further complicates matters. With a P/E ratio standing at 17.4, the valuation is attractive, but does it truly encapsulate the company’s competitive edge?
As blockchain continues to reshape the financial landscape, top blockchain stocks vie for supremacy. PayPal’s journey is one investors should monitor closely. Whether it will emerge as one of the best blockchain stocks remains a thrilling anticipation. However, one cannot deny its allure.
On the publication date, Faizan Farooque did not hold (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.
