The 5 Best Blockchain Stocks & ETFs of 2021
Blockchain is the hottest trend in technology. It’s credited as the building blocks that made Bitcoin, a popular and lucrative cryptocurrency, possible. And it is paving the way for reimagining the internet of the future.
It could be the next big thing. Imagine if you could invent a time machine and invest in Alphabet, Inc. before anyone had heard of Google, where would you be today? Putting your money in Blockchain today could be the next version of that analogy.
Cryptocurrencies like Bitcoin have made big headlines in financial news in recent months. There has been a lot of volatility in the value of Bitcoin with prices surging as high as $64K and then falling to $30K. Blockchain technology as part of the bigger picture represents a little more stability as it will shape the future of data for healthcare, banking, supply chain 4.0, and much more.
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What to Know About Blockchain Stocks and ETF Investments in 2021
A blockchain ETF is similar to any other theme-based investment. Each investment is made up of a collection of companies that share a common interest in blockchain technology. Blockchain ETFs capitalize on the benefit that blockchain technology provides to companies, allowing them to streamline operations and save money using decentralized data.
While the future of blockchain is promising, these investments are susceptible to the same risks as any technology-based startup with higher rates of failure than other business models and a propensity to get stalled with regulatory roadblocks.
5 Best Blockchain Stocks and ETFs This Year
Investing in the future of the internet, ranging from content delivery to cryptocurrencies and digital payments starts with finding the right blockchain ETF. While there is risk in every investment and tech investments still have more risk than other business sectors, we’re willing to hedge a bet that blockchain has a strong future.
You’re likely to recognize some big names on this list because there are many companies already established in the financial world and in technology that recognize the power of blockchain technology to transform our digital futures.
Visa Inc. (Ticker: V)
That’s right, Visa as a long-standing credit card company is making big moves towards blockchain technology. Visa has taken a proactive approach by creating a venture capital firm that invests directly n the development of blockchain technology. Visa’s involvement is largely as a collaborator, helping shape the future of finance with an eye on blockchain technology.
Visa’s FinTech Fast Track program is a fast and convenient way to connect the vast resources of Visa as a payment processor with crypto wallets, reaching more than 70 million merchants. Visa Crypto APIs help users buy and sell bitcoin. And the Visa Digital Currency Innovation Hub helps users learn the ins and outs of a complex new digital currency.
Square Inc. (Ticker: SQ)
Square is a subsidiary of Twitter and an early adopter of blockchain technology. Square is a payment processing company built for mobile payments. Their services include merchant services through the Square platform and peer payments through CashApp. The company has had a strong 2021 as the world is moving steadily towards digital money. The company’s profits are up an impressive 91% over their 2020 numbers.
Under the leadership of Twitter CEO Jack Dorsey, Square is embracing the world of decentralized finance (DeFi). DeFi applications facilitate the flow of money using accessible, efficient, and low-cost alternatives to traditional banks.
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International Business Machines Corp. (Ticker: IMB)
Another familiar face in the blockchain basket is International Business Machines (IBM). While the company was originally known as an early computer manufacturer, its eye is on blockchain technology now. In 2017 they began aggressively building out their blockchain projects, now spanning at least 500 individual projects.
One of the most notable investments by IBM is its hyperlogic fabric. It’s a platform designed to build, grow, and govern blockchain solutions in any environment. In short, it helps businesses keep open-source code in check for agile programming that is adaptable to ever-changing business needs.
Advanced Micro Devices Inc. (Ticker: AMD)
Advanced Micro Devices (AMD) is a leading chip manufacturer. They have built a well-established name for themselves in the technology space and jumping feet first into blockchain technology just makes sense. AMD has formed an alliance with Blockchain Gaming Alliance to develop blockchain-powered gaming platforms.
Although the gaming alliance is their primary involvement in blockchain, it’s not their only one. AMD routinely finds itself on the leading edge of blockchain technologies as new niches in entertainment and cloud computing find their way to the technology.
Amplify Transformation Data Sharing ETF (Ticker: BLOK)
Amplify allows investors to put their money in a broad slice of companies across different industries with their hands in the blockchain honey pot. Some of the top holdings in this fund include the likes of Paypal and Square, both established online payment processing companies. If you feel like blockchain technology is still a risky investment, this type of ETF can help mitigate your risk by spreading it out to over 45 different companies in different industries doing different things.
BLOK is the only blockchain ETF that is actively managed, making it a clear and obvious top choice for many investors dipping their toes into blockchain investments. While an actively managed ETF is often more expensive, we argue that BLOK is nearly identical in costs to similar ETFs like Siren. We think that’s a big win!
An Extra ETF to Keep an Eye On: Siren Nasdaq NexGen Economy ETF (Ticker: BLCN)
Siren is another aggregator that helps spread your risk around to different companies in different industries. This ETF currently has 69 holdings, including big names like Paypal and smaller companies like Galaxy Digital Holdings. The fund is growing and up at least 30% from last year as confidence continues to grow in blockchain technologies.
Related: How Do Stocks Work?
Considerations to Keep in Mind
Investing in technology can be a gamble. There are many great ideas that fizzle and drown for a variety of reasons, making investing in technology a little volatile at times. But when they manage to stay afloat, they surge to the top. If you recognize strong names like Paypal, Twitter, AMD, and Visa then you already know where to put your money.
The benefit of investing in blockchain ETFs is the built-in safety in diversifying your investments across multiple companies in different industries with varying amounts of risk. ETFs are the safest way to get your money into blockchain without the nerve-wracking risk of putting all of your eggs into one basket.
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