While it’s hard to look past blockchain’s important role in driving the cryptocurrency ecosystem and leading coins like Bitcoin (BTC-USD) as a whole, the industry has a vast range of use cases that can help to drive innovation throughout the financial sector, cybersecurity and introduce next-generation digital ownership across virtually every industry.
The blockchain technology market size is expected to grow at a rapid compound annual growth rate (CAGR) of 68% to a value of $69 billion by 2032.
This rate of growth is significant to the industry’s investment prospects. Short-term volatility has heavily impacted the cryptocurrency landscape in recent weeks, with Bitcoin falling more than 14% in the first 5 days of August. However, blockchain stocks remain a solid investment option due to their long-term potential.
Given that we’re already seeing evidence of blockchain paving the way for the future of decentralized finance (DeFi), which helps to offer innovative solutions like smart contracts and peer-to-peer (P2P) lending, the growth of the technology is already bringing tangible benefits in the technology sector.
With cryptocurrency markets reeling to begin the month, August could be an excellent time to pick up some of the best blockchain stocks.
Coinbase (COIN)
Due to its proximity to cryptocurrency markets, leading crypto exchange Coinbase (NASDAQ:COIN) has performed exceptionally well in 2024 thanks to the sustained growth of cryptocurrencies like Bitcoin.
Coinbase offers embedded finance for users to freely trade cryptocurrencies via its app around the world, helping to democratize the world of crypto for retail investors.
The stock ended the first half of 2024 28% higher, and despite recent volatility in the cryptocurrency market, COIN remains on course for an excellent year of growth. And that’s after suffering as negative growth swept through the crypto landscape in 2022 and early 2023.
Coinbase’s strong performance this year is backed by its impressive fundamentals. In its Q2 2024 earnings report, COIN posted net revenue that more than doubled to $1.4 billion, while net income climbed to $36 million, in comparison to a loss of $97 million over the same period last year.
Although cryptocurrency markets are weaker today, optimism remains strong for a bull market to drive cryptocurrencies higher in 2024 and 2025. Should this occur, we’re likely to see COIN’s growth outpace the S&P 500 comfortably.
Wall Street guru Cathie Wood wasted no time buying the dip in Coinbase shares in the wake of the crypto downturn, picking up 93,797 COIN worth $17.8 million on August 5. For investors who believe in the long-term capabilities of blockchain and cryptocurrency, Coinbase is an attractive stock to pick up at August’s discounted rate.
Nvidia (NVDA)
At its current rate of growth, it’s hard to discount Nvidia (NASDAQ:NVDA) from any innovative tech stock rollcall.
Although the semiconductor giant isn’t best known for its involvement in the blockchain landscape, the stock plays a pivotal role in powering the growth of the blockchain industry as a whole.
At a CAGR of 68% over the coming 8 years, the sheer level of processing power required to enable blockchain technology to realize its potential is likely to be delivered by Nvidia, making the stock a hot prospect for blockchain-focused investors.
In June, Nvidia briefly became the world’s most valuable stock, and its astonishing growth of around 745% between Q1 2023 and Q2 2024 underlines its invaluable role in powering technological growth throughout a number of emerging industries.
There are plenty of signs that Nvidia is delivering on its promise, too. This is a major boost for the stock, given the speculative nature of the generative AI boom helping to facilitate its growth in recent years.
Nvidia’s Q2 earnings project a 107% year-over-year (YOY) revenue growth to $28 billion. The firm’s status as a market leader in the semiconductor landscape means technological innovations can only grow the stock’s prospects looking to the future.
Block (SQ)
There may be no stock more enthusiastic for blockchain on Wall Street than Block (NYSE:SQ).
Best known as a payments app, Block has a keen cryptocurrency focus and an in-house team of Bitcoin developers that work on Block’s open-developer platform for blockchain applications.
The stock dipped 15% in the first half of 2024, making it a more attractive price for investors to buy in August ahead of what could be a bullish end to the year for Bitcoin and the wider cryptocurrency landscape.
While announcing Q2 2024 gross profit growth of 20% YOY to $2.23 billion, Block also announced an internal reorganization designed to foster more growth and accelerate go-to-market strength for the company.
For a firm that has identified both banking and Bitcoin as drivers for future growth, CEO Jack Dorsey’s enthusiasm for blockchain technology may see Block’s restructuring focus more squarely on emerging blockchain and cryptocurrency markets.
With Block investing 10% of its gross profit from Bitcoin products into buying Bitcoin, the company is in line to grow alongside the wider blockchain and cryptocurrency industry. That makes its weaker 2024 performance a possible strong buy-in opportunity for a stronger end to the year.
On the date of publication, Dmytro Spilka did not hold (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.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
