There’s a lot of hype surrounding bitcoin these days, even with prices hovering below $20,000 as of Sept. 27 — a significant decline since November, when prices exceeded $67,000. Still, unless you’re Elon Musk, that’s a pretty steep investment.
If you don’t have a few extra million lying around to invest in bitcoin, read on to learn about the seven best blockchain stocks, which are less expensive investment options but still packed with potential.
7 Blockchain Stocks To Buy Now
Bitcoin is a digital currency that uses blockchain technology, but it’s not the only player in the game. If you want to get in on the blockchain action, here are the seven stocks you should look at:
- Riot Blockchain
- Bit Digital
1. Riot Blockchain
Riot Blockchain (Nasdaq: RIOT) focuses on bitcoin mining. Mining involves adding transaction data to the global public ledger of past transactions, creating new coins as those transactions are confirmed. Riot Blockchain intends to be the largest and lowest-cost producer of bitcoin in America.
It recently appointed a new CEO, Jason Les, but he has served on the board since 2017 and plans to upgrade and expand the company’s mining technology. This expansion could give revenue a boost and make Riot profitable for the first time in 2022, according to an analysis by Seeking Alpha. The company is making good headway toward that goal, announcing record revenue for the first quarter of the year and increased revenue in the second quarter.
Bitcoin mining stocks such as Riot Blockchain closely follow the price of bitcoin. If bitcoin soars, Riot Blockchain prices rise. If bitcoin loses value, so will Riot Blockchain. However, Riot Blockchain is trading at less than $7 a share as of Sept. 27, so it’s a reasonably priced investment for most, and analysts give it a “strong buy” rating.
2. Block (Formerly Square)
Square changed its name to Block (NYSE: SQ) in December 2021. The company operates Cash App, a peer-to-peer payment app that allows you to pay anyone from your waiter to your therapist. It also features payment processing for small businesses.
Square allowed customers to start using bitcoin in 2018, and that seems to have added value to Block.
Before the name change, Square had invested $170 million in bitcoin, and the CEO, Jack Dorsey, is a personal fan of digital currency. The company has its own team of crypto coin developers dedicated to advancing bitcoin, according to a company press release. The initiative’s name was changed from Square Crypto to Spiral in December 2021. Shortly after that, the company revealed plans to integrate bitcoin into Cash App and merchant operations. Cash App users can now buy and sell bitcoin from within the app.
Visa (NYSE: V) has been investing in blockchain technology since 2016. It has developed Visa B2B Connect, which processes cross-border corporate payments using blockchain. It also has Visa Fintech Fast Track, which uses crypto wallets to help users pay at more than 100 million merchants globally along with buying and selling bitcoin.
Visa customers made $2.5 billion in crypto-linked payments in the first quarter of fiscal 2022, according to CoinDesk, reporting on an earnings call with Visa CEO Al Kelly. Nearly 25% of small businesses plan to accept cryptocurrency payments this year, according to a Visa survey of small business owners in nine countries.
If you’re not a big fan of risk, Visa offers a more stable introduction to blockchain investing.
4. Bit Digital
Bit Digital (Nasdaq: BTBT) is a New York-based bitcoin mining company operating in North America. The company has exploded onto the blockchain landscape and is currently one of the largest bitcoin mining companies listed on Nasdaq. The stock price is affordable at $1.21 as of Sept. 27.
Bit Digital is a risky investment because the company has yet to show consistent profits. However, its overall performance has been good over the last several years, and its strong financials could result in a long-term increase in value, Simply Wall St reported.
IBM (NYSE: IBM) has been slow to adapt to the software and internet services that dominate the market today, but it’s betting the IBM Blockchain platform will help improve efficiency and reduce risk. IBM is stable, so if you want to dip your toes in the blockchain pond, it might be a good place to start. Despite recent volatility, analysts rate IBM stock a “buy.”
Amazon (Nasdaq: AMZN) is not only the biggest retail site on the planet, but it also hosts the largest cloud-based service. Right now, you can indirectly use bitcoin to pay for Amazon goods by using bitcoin to purchase prepaid Amazon gift cards.
There’s also some indication that Amazon plans to launch its own cryptocurrency project with Mexico as the pilot country. It would allow customers to convert money into digital currency and then spend it on any of the services or goods Amazon provides.
Long before Square, there was PayPal (Nasdaq: PYPL), and the two are battling it out not just in person-to-person cash transfers and payment processing but in the cryptocurrency space as well, where PayPal provides a centralized platform for users to buy, hold and sell bitcoin, ethereum, bitcoin cash and litecoin.
In addition to fully ramping up its buy-sell-hold cryptocurrency services to Venmo users last year, PayPal announced it would acquire Paidy, one of Japan’s leading payment platforms and “buy now, pay later” solutions, which could significantly expand PayPal’s global market share. The $2.7 billion deal closed in early September, according to Pymnts.
In its second-quarter 2022 earnings release, PayPal announced that total payment transactions per active accounts were up 12% on a trailing 12-month basis. In addition, the company struck a deal with Amazon that will allow PayPal users to use their Venmo accounts to make purchases on Amazon.com and the Amazon mobile app, CNBC reported, signaling a milestone in PayPal’s transition away from serving as eBay’s payment processor.
What Is Blockchain?
Blockchain is a digitized ledger that records information in a decentralized location, allowing parties to send payments or data without having to go through a third party, such as a bank. It’s called blockchain because all the transactions are sorted into blocks. Only one block can be added at a time, and every block contains mathematic proof that guarantees it comes next in the sequence.
Because every block rests on every other block that came before it, it’s more secure. You can’t alter the most recent block without also tampering with the mathematical formula of every other block. Blockchain has a number of advantages:
- Potentially more secure than sending cash
- Faster to process international transactions
- More transparent — everyone can see everyone else’s entries
- No possibility of data loss
Good To Know
Blockchain has progressed from an open-source technology to becoming a major component of finance, supply chains and even film and voting systems. Bitcoin outperformed every other asset class in 2020, and since the adoption of bitcoin and blockchain is increasing, it was a lucrative investment in 2021. Bitcoin was created in response to the 2008 financial crisis, which some say mirrors the financial environment created by the COVID-19 crisis.
Blockchain technology has generated a buzz around Wall Street, but be careful before you jump in. Some experts think that bitcoin and blockchain are part of an investing bubble. It’s usually a smart idea to diversify your portfolio, so if you can afford it, transferring some of your assets to blockchain stocks may pay off. Just don’t invest more than you can afford to lose.
GOBankingRates’ Crypto Guides
- What Is Cardano? (ADA)
- What Is Bitcoin Cash? (BCH)
- What Is Chainlink? (LINK)
- What Is Dogecoin? (DOGE)
- What Is Litecoin? (LTC)
- What Is Polkadot? (DOT)
- What Is Ripple? (XRP)
- What Is Stellar? (XLM)
- What Is Tether? (USDT)
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Sept. 27, 2022, and is subject to change.
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- CoinMarketCap. 2022. "Today's Cryptocurrency Prices by Market Cap."
- Riot Blockchain. 2022. "Riot Reports Second Quarter 2022 Financial Results, Current Operational and Financial Highlights."
- PayPal. 2022. "Second Quarter 2022 Results."
- Reuters. 2022. "A quarter of small businesses across nine countries plan to offer crypto payments -Visa survey."