3 Stocks at the Cutting Edge of Blockchain Technology

Stocks to buy

Blockchain stocks should be on your radar. The halving is coming, and a Bitcoin (BTC-USD) ETF could soon become a reality. When writing, the digital gold trades for around $43,000, well below its all-time high of $68,000. With these powerful catalysts forming a backdrop, now might be a good time to start seriously investing in blockchain stocks as a long-term hold.

Some blockchain stocks are more ahead of the curve than others. This article will dissect the best of the best and illustrate how they plan to build on their progress.

So here are the best blockchain stocks to consider that are pushing the needle forward.

Nvidia (NVDA) 

Source: Shutterstock

Nvidia (NASDAQ:NVDA) is a somewhat overlooked blockchain stock. It’s most well-known for its impressive GPUs and is equally well-known as an AI stock.

NVDA stock has a strong influence over the crypto industry due to its GPUs being able to mine most types of cryptocurrencies. The company has a powerful influence over so-called AI crypto tokens. In a sense, AI tokens like Fetch.ai (FET-USD) are correlated to the earnings and performance of companies like NVDA due to their enormous sway over the industry.

Now might be a good time to load up on shares for NVDA stock. One of the key reasons is that although its valuation remains rich at 60 times earnings on a trailing basis, its forward P/E is just 26.70, so Wall Street is certainly bullish on the continued growth of the company’s bottom line and stock price.


Source: shutterstock.com/LCV

IBM (NYSE:IBM) is another one of those underappreciated titans in the blockchain industry. It has been working on its own enterprise blockchain solutions since the technology was popularized.

Recently it announced a new initiative and a new cryptographic technology designed for managing digital assets in cold storage. This technology, named the IBM Hyper Protect Offline Signing Orchestrator (OSO), improves the security of crypto assets held in cold storage.

Cold storage is the preferred method to store crypto assets due to the security benefits it provides to users. It’s far more secure than leaving coins on a website due to the user being in control of their key pairs and mobile apps that have been subject to hacks, backdoors, and security breaches over the years.

In short, OSO makes cold storage even more robust by introducing measures such as electronic transaction approval by several stakeholders. This helps mitigate some of the weaknesses of cold storage, as individuals may be forced to divulge their cold storage keys via coercion, social engineering, or other attacks that focus on manipulating the user.

The OSO technology is currently being utilized by Metaco, a custody firm owned by Ripple (XRP-USD) and a long-standing partner of IBM in the cryptocurrency space.

This development makes IBM one of those blockchain stocks for investors to consider closely.

Riot Platforms (RIOT)

Source: rafapress / Shutterstock.com

Riot Platforms (NASDAQ:RIOT) is my favorite pick for a pure-play blockchain stock.

The bull case for RIOT stock can be chalked up to a few factors, but most significantly, culminating in a very impressive previous quarter, which saw its share price rally 28%.

As a Bitcoin mining company, RIOT managed to significantly increase its mining power and reduce its cost of mining Bitcoin to almost zero. As The Motley Fool reported, a large part was due to its strategic power use and the power credits it arranges with energy companies. This allowed it to pay around $6,141 per Bitcoin and pocket the premium.

Its power management strategy is a defining competitive advantage, as much of the industry is criticized for its heavy electricity use and high operating costs.

The upcoming halving event is expected to increase the price of Bitcoin significantly. But this could also be a boon for RIOT in a more indirect way by inflating its book value per share. Its equity to book value per share is $1.34 billion, and it currently holds 7,345 in Bitcoin on its balance sheet.

With a higher book value and improved bullish sentiment around the coin, we could see investors flock to the highly efficient RIOT as the whole market rallies, which makes the company a strong buy in my view.

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.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.

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