Despite Bitcoin (BTC-USD) losing its long-term support of $29,000, investors shouldn’t discount the value of blockchain stocks in the short term. If one is bullish on the future of digital currencies and the underlying technology, then technical weaknesses like this might be meaningless in the long run.
One silver lining to the declining price of Bitcoin is lower book values among blockchain stocks. Investors could pick up some potential bargains while the market shows short-term technical weakness. The reason is that cryptocurrencies often make up a sizable portion of the balance sheets for blockchain stocks.
If you are prepared to buy while others run in fear, here are the best blockchain stocks to buy in September.
Greenidge Generation (GREE)
Greenidge Generation (NASDAQ:GREE) operates cryptocurrency data centers and power-generation businesses, as well as cryptocurrency-mining facilities. The company’s stock has seen a significant drop in the past year. However, its competitive advantage lies in its use of green technology to mine cryptocurrency.
The company is also showing some weakness in the short term, which means that bullish investors may be able to snap up some undervalued shares at a bargain. The company reported a Q1 loss of $0.16 per share, missing analyst estimates by $0.06, representing a -60% earnings surprise.
However, since posting these results, the company’s share price has slipped. Its P/E ratio is now just 0.02. This bullish case is strengthened when one examines its target price of $20, suggesting it is an undervalued blockchain stock.
IBM (NYSE:IBM), once a tech sector giant, has been reinventing itself through blockchain technology. The company launched IBM Blockchain in 2017 and is currently managing over 500 blockchain projects for various marquee companies.
One reason I’m bullish on IBM’s position in the blockchain space is through its partnership with Stronghold to create a ‘stable coin’ that’s pegged to the U.S. dollar. Their objective is not just speed and economy but also to democratize financial access, especially in remote areas where traditional banking remains a challenge.
Stablecoins like Tether (USD-USDT) have been a contentious issue in the world of crypto. While traders and users depend on them as safe havens during times of uncertainty, there have been far-flung allegations and conspiracy theories regarding how much of their value is actually backed by U.S. dollars.
Tether also faces allegations of money laundering. Other options, including algorithmic stablecoins, have seen their value plummet to zero, taking investors along for a painful ride to the bottom.
IBM provides a trusted name to an area where trust is desperately needed. It’s a key reason why IBM is a blockchain stock to consider.
Mastercard (NYSE:MA), a global payments and technology company, ranks among the top blockchain patent holders worldwide. The company made the Forbes Blockchain 50 list. Mastercard is already utilizing its blockchain technology, the Mastercard Provenance Solution, to enhance food supply chains globally.
Mastercard’s new Multi-Token Network is an active initiative to bolster security in the blockchain ecosystem. As the use of cryptocurrencies rises and their use becomes more ubiquitous, there’s a pressing need to address some of the sinister elements they tend to attract.
Most people, whether rightly or wrongly, associate Bitcoin with criminal activity (despite cash still being king in this arena). We’ve also all seen the high-profile hacks of exchanges and founders pulling the rug beneath unsuspecting investors’ feet.
Mastercard’s Multi-Token Network is a step in the right direction. It can enhance digital asset security by diversifying risk across multiple tokens, standardizing security protocols, ensuring consistent monitoring, isolating token-specific risks, and facilitating regular security updates.
Like IBM, Mastercard’s presence in blockchain may give people a sense of much-needed trust and comfort in the network they’re using. Most blockchain projects are run by faceless or obscure entities with little moral or legal accountability. The foray of these companies into the blockchain space may help carve out valuable competitive advantages in addition to being solid stocks on their own.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.