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Okay, I get it. You heard about the kid that threw their tax return at an obscure cryptocurrency became an overnight billionaire...with a "B" not an "M". Sort of makes you want to take that $1k you've had rotting in that savings account and roll the dice yourself. I mean, if Mikey Millennial can strike it rich with cryptos and NFTs, why can't you? You like Lambos, too. These get rich quick schemes come and go. Bull markets make it seem like these moves happen every day and to everyone. Well, the harsh reality of Fed rate hikes has splashed a bucket of cold water on things. Risk-off has hit the crypto market harder than any other asset class on Earth. The end of this latest cycle of mania was not the first time cryptocurrency fizzled out. The public came to know Bitcoin and Ethereum during its big boom cycle in December 2017. Bitcoin prices had surged from under $2,000 in July 2017 to nearly $20,000. Today you're hearing more blow-outs than blow-ups. Meaning, the landscape is more treacherous than ever. By now, I'm sure you have heard of the Luna-Terra Stablecoin debacle. It cost crypto holders billions of dollars. For every one story about hitting it rich, there are dozens of scams to hear about. It may sound like an easy way to riches, but there is no easy way out. Prices have suffered as a result. BTCUSD prices came down to $16,000 into December 2022, near levels it traded at the end of 2020. Other major cryptocurrencies like ETHUSD have been hit, too. ETHUSD is close to $1,600, which is a far cry from its highs over $4,800. Investors looking to "Buy the Dip" could be tempted at these levels. If you're thinking about diving in headfirst and throwing caution to the wind. Please...DON'T DO IT! You don't have to have a gambler's risk tolerance or be a cryptocurrency expert to profit fromBitcoin, Ethereum, Solana and others. You don't even have to believe in the long-term sustainability of any of these coins. You just have to recognize the game and figure out a way to profit from the underlying technology. That underlying technology, which powers every cryptocurrency on Earth, is the blockchain. If you've been paying attention to the headlines, you'll see that central banks and major retail banks alike have changed their tune about cryptocurrencies. Initially, they scoffed and called them irrelevant. But recently, the discussion has shifted and now they are acknowledging the threat cryptocurrencies bring to their businesses. What they're really saying is that blockchain is revolutionizing the way we account for data. Futures contracts in Bitcoin have been trading at the CME Group for years. Companies have begun to hold Bitcoin on their balance sheets, right there next to the U.S. dollar. And now, recently, the SEC has allowed the first Bitcoin ETF to trade publicly. This only adds to the legitimization of cryptocurrency as an asset class. Nowadays, crypto is not a pie-in-the-sky idea, it's a major financial asset which poses a significant threat to traditional payments businesses. As such, it's an exciting opportunity for investors to get in relatively early in the growth phase of an emerging technology. Continued . . . | ||||
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| What is the Blockchain? In the digital world, a block is a digital list of records, acting as a ledger that can contain information of any kind. When these blocks are linked together, they are secured by cryptography to form the blockchain. This blockchain is an unforgeable record of all the transactions that replicates on every computer on the network. If information in a new block can't be verified by all the other blocks in the chain, it is discarded. In the case of the top cryptocurrencies, a currency's network consists of millions and millions of computers all over the world. This makes it unhackable, as a hacker would need to hack all that computing power simultaneously, a seemingly impossible task. I already know I've lost some people, but please stay with me. At this point the question within this topic is typically: What does blockchain have to do with currency? Everything. But to understand this opportunity we have to separate our thoughts of cryptos from traditional fiat currency. While fiat currency is used to buy cryptocurrency, once bought, cryptos stand on their own. In addition, the smart contract (more on this later) aspect allows cryptos to be not just an exchange of cash, but an exchange of value. In a sense, these currencies are the "Internet of Value". To simplify, the blockchain is a public registry of assets and transactions that tells us who owns what. These transactions are often referred to as smart contracts, as they are recording a contract between two people, whether it be a transfer of currency, a good or a service. You can see how this new innovation could be disruptive to traditional businesses out there. Rather than lament this potential disruption, you are in the unique position to profit from it. How, you ask? By investing in the various areas of the market where the blockchain is making noise. There are several different angles here. The "Picks and Axes": During the gold rush, the ones who really got rich were the ones selling the picks and axes. That is, the companies which provided the tools for the speculators to go out and try to find their fortunes. In the cryptocurrency world, this refers to the companies which make the chips and hardware used for mining operations. Consulting: There will be a wave of companies looking for ways to incorporate blockchain technology into their existing businesses. Large consulting companies are already offering services helping companies to integrate the new tech. Cloud Infrastructure: No other industry has been as dependent on the cloud for its development as blockchain has. The need to distribute a ledger across the world, with no centralized ownership or authority overseeing transactions plays into the strengths of the cloud. Companies which offer cloud-based hosting may suffer, while those which help facilitate this decentralized network will benefit greatly. Payment Processing: Among the most disruptive industries for blockchain is payment processing. Rather than your traditional financial intermediary, blockchain technology allows for a distributed, open, public ledger where transactions are confirmed by other nodes in the chain for a fee that's much smaller than your typical fees coming from more traditional processors. Lending: We are just at the tip of the iceberg here on lending. Blockchain tech is perfect for lending, allowing lenders to spread their risk across thousands of loans in an instant, no matter the size of the lender. Miners: The miners are the most important part of any blockchain and likely the most misunderstood. Miners confirm transactions from node to node by solving the cryptographic problem and are then rewarded in units of the cryptocurrency. Already we are seeing companies which "mine" cryptocurrency publicly traded. These companies mine the currency then immediately sell them on the open market and pass through the gains to shareholders. Think of them as you would a pipeline company in the energy sector. These companies are small now but could become much larger in time. Investors/BDC: Some publicly traded companies are acting as incubators for other budding cryptocurrencies. We talk about Bitcoin a lot, but there are over 20,000 other cryptocurrencies in the world. These investors and business development companies (BDC) invest in promising crypto companies before they hit the mainstream. There are many more companies on the way but how will you know how to separate the pretenders from the contenders? Which of these emerging companies will be built on solid technology and which will be gimmicks? Just like the Dot Com Bubble brought with it several names which added ".com" to their names to get in on the action, companies are adding "Blockchain" to their names, some in a very unscrupulous fashion. Today, Find the Real Blockchain Companies This technology is already having a major impact on almost every industry you can think of, and that impact will only accelerate over time. In fact, experts predict the space will skyrocket +1,505% from $10.2 billion in 2022 to $163 billion by 2029. Blockchain is still a new and exciting technology. Investors have a chance to pocket huge gains just like the early days of the internet. That's why I invite you to look into our portfolio service Blockchain Innovators. It cuts through the gimmicks and hype to uncover strong, often little-known companies driving blockchain technology from the various categories I shared above. We look for stocks with explosive profit potential and long-term sustained growth. In fact, the portfolio is currently riding 6 triple-digit gains reaching as high as +281%, +380%, and +419%.¹ We're in the green on 15 out of 17 positions, and we believe they can all climb much higher. There's still time for you to get in on them. Today's Unique Market Environment: Strong Economic Signals + Suppressed Stock Prices The tech sector is set to bounce back big time. These stocks are significantly oversold, despite solid fundamentals and strong consumer demand. Fintech was hit especially hard… which is why I see an especially powerful rebound shaping up. Right now, there are still tremendous bargains to be found on selected tickers. Investors who get into the right stocks now will look like geniuses in a few short months (and even more so over the longer term). Bonus Report: When you look into Blockchain Innovators, you're also invited to download Masters of the Metaverse: How to Profit with 5 Surprising Stocks, our urgent Special Report on another fast-emerging industry. The metaverse offers an immersive digital experience that's poised to change the world - and make early investors very rich. Discover five surprising stocks with spectacular upside for this $10 trillion opportunity. Your chance to benefit from both Blockchain and the metaverse ends Sunday, March 5, so I strongly suggest that you look into these potential blockbuster categories right away. See our Blockchain Innovators stocks and bonus report now » Good Investing,
Dave is Zacks' resident blockchain expert. A successful early crypto investor, he selects stocks and delivers exclusive commentary for our newest portfolio, Blockchain Innovators. | ||||
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| ¹ As of 3/1/2023. The results listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research's newsletter editors and may represent the partial close of a position. This free resource is being sent by Zacks.com. We look for investment resources and inform you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms of Service". https://www.zacks.com/terms_of_service Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research is not a licensed securities dealer, broker or US investment adviser or investment bank. The Zacks #1 Rank Performance covers the period beginning on January 1, 1988 through January 2, 2023. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank #1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance_disclosure for information about the performance numbers displayed above. Zacks Emails Zacks Investment Research |
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