With the massive sell-off in the crypto market, the best blockchain stocks to buy are now on sale. These stocks play a critical role in the proliferation of blockchain, a technology that will continue to be strong. According to the research firm, MarketsandMarkets, the blockchain industry could grow by a whopping 66.2% to reach $94 billion by 2027. With the crypto market expected to shine over the long term, it’s probably the right time to load up on the sector.
However, it is imperative to understand the risks involved in investing in the space. Anything crypto-related is heavily linked to the actions of the Federal Reserve. With the Fed looking to curb inflationary pressures at all costs, the sector will continue to struggle in the interim. Nevertheless, a combination of blockchain stocks pick-and-shovels and pure plays could give you a healthy balance in your portfolio.
Blockchain Stocks: Taiwan Semiconductor (TSM)
Taiwan Semiconductor (NYSE:TSM) is a top contract chipmaker with a leadership position in the niche. Its chips have a wide variety of use cases for multiple industries, including blockchain with its application-specific integrated circuit (ASIC) chips.
ASIC chips are specifically designed for use in crypto mining, providing the computation power to mine cryptos such as Bitcoin (BTC-USD) and Ethereum (ETH-USD). Moreover, some of the biggest crypto miners in Bitmain source hardware from TSM. As we advance, TSM’s multi-billion dollar investments in the space will continue to grow its market share. Moreover, according to DataIntelo, the global ASIC market will likely grow at a CAGR of 18.6% through 2030. Therefore, there’s plenty of upside potential ahead for TSM, especially once the crypto markets snap back in the not-so-distant future.
Blockchain Stocks: PayPal (PYPL)
PayPal (NASDAQ:PYPL) was the first fintech giant that forayed into the crypto sector. It greenlit Bitcoin transactions back in 2014 and since then has significantly increased its stake in the industry.
The platform now allows users to buy, sell, and hold cryptos with PayPal, with customers using its Checkout with Crypto service. Moreover, users can also move their coins to other exchanges and hold other cryptos apart from BTC, including Litecoin (LTC-USD) and Ethereum. At the end of 2022, PayPal held a whopping $604 million in crypto holdings. Naturally, with the broad-based market correction, the value of its crypto holdings has plummeted but is poised for a massive upside ahead.
Moreover, PayPal operates a robust core business that continues to wow investors despite the market headwinds. It rounded off the year with another strong performance during its fourth quarter, with a massive increase in payment volumes and net new active accounts. Moreover, the icing on the cake was its vigorous fiscal 2023 guidance.
Blockchain Stocks: Riot Blockchain (RIOT)
Shares of Bitcoin-miner Riot Platforms (NASDAQ:RIOT) are up 56% year-to-date, fueling its comeback story. Bitcoin has also been trending higher this year, gaining over 30% since the start of the year. Additionally, with a relatively weak dollar and the Bitcoin halving event next year, RIOT stock could gain immensely in the upcoming months.
During the pandemic years, Riot was posting triple and even quadruple-digit revenue growth rates pushing its stock price to record highs. However, amidst a never-ending crypto winter, growth rates have normalized, and then some. Nonetheless, the firm reported $255 million in cash in its most recent quarter with zero debt. If its recovery sustains, the firm could further grow its capacity.
Its mining capacity increased by a tremendous 213% from the prior-year period to 9.7EH/S, and further expansion will lead to a swelling of digital assets and value creation. The firm already has plans to increase its capacity to 12.5EH/s by the first half of 2023.
Tech giant IBM (NYSE:IBM) has flown under the radar in the sector. Big Blue was slow to embrace the rapid changes in the sphere, with its peers investing in new and more profitable tech verticals in blockchain, cloud computing, consulting, and others. However, all that has changed as hardware-giant IBM now boasts an equally potent, if not more, software suite.
Particularly, with crypto, its strategy revolves around developing a wide range of blockchain solutions. This includes its cloud-based platform, IBM Blockchain, enabling clients to deploy blockchain applications effectively. The platform empowers businesses to digitize transactions effectively through a secured and distributed ledger, significantly boosting efficiency. Also, it offers services and expertise in multiple areas, including smart contracts, crypto wallets, and promoting central bank digital currencies (CBDCs).
IBM’s software strength continues to improve each quarter, helping offset losses from hardware. Its consulting and cloud businesses (including blockchain) have grown by double-digit margins over the past several quarters.
Mastercard (NYSE:MA) was recently named among the 22 financial businesses that made Forbes’ 2023 Blockchain 50 list. The list covers the top billion-dollar companies putting distributed-ledger technology to effective use in the real world. The company’s crypto strategy focuses on integrating blockchain and digital technologies into its robust payment infrastructure. Moreover, it aims to develop new products and services and partner with various exchanges to effectively enable its customers to spend their digital currencies with millions of merchants worldwide.
However, after the FTX and BlockFi debacle, Mastercard is looking to slam the breaks of forging new partnerships. Nevertheless, a company spokesperson states, “Our efforts continue to focus on the underlying blockchain technology and how that can be applied to help address current pain points and build more efficient systems.”
Nvidia (NASDAQ:NVDA) was in the news for all the wrong reasons last summer. The US SEC called out the tech giant for not properly informing its investors about how crypto miners were driving GPU demand. The company eventually had to pay the US SEC $5.5 million in settlement fees, with many investors questioning whether its move into crypto was wise.
During the industry’s boom, Nvidia generated a ton of money from sales to crypto miners. Consequently, it released new cards intended for crypto-mining purposes called cryptocurrency mining processors (CMPs). However, CMP sales have dropped emphatically in recent quarters. For the fourth quarter ending, Nvidia saw a 77% drop in CMP sales from the previous quarter. Nvidia has come out of its regulatory troubles relatively unscathed and can continue investing in its CMP divisions for the foreseeable future. Its businesses continue to fire on all cylinders, and its recent exploits in AI point to an even brighter outlook for the company.
HIVE Blockchain (HIVE)
With BTC’s relatively heartening performance of late, it’s perhaps the best time to pick up some stocks on the comeback trail. Another Bitcoin miner poised for robust gains ahead could be HIVE Blockchain (NASDAQ:HIVE), which languishes in the penny stock territory now. In fact, after plunging over 60% in the last 12 months, HIVE stock appears to be deeply undervalued.
In its most recent quarter, the company reported several positives despite a precipitous drop in sales. It effectively mined 787 BTC during the quarter, translating into a 13% gain from last year. The firm’s mining capacity is at 3.33EH/s as of last month, a 36.7% increase as of September. If the rally in BTC persists, we could see considerable expansion in Hive’s margins in the upcoming quarters.
On the date of publication, Muslim Farooque 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.