Most people think if you want exposure to the cryptocurrency markets or blockchain, you have to buy Bitcoin or Litecoin or Ethereum, or all 3. While I would start there, this is not the only way to get exposure to these markets.
The biggest thing that marketplace lending and the cryptocurrency world have in common, and why I cover both in my blog, is that they are both about decentralized investments and more investment choices for more people. This is especially true for us retail investors, who have fewer options than other investors.
Here I outline 10 different stocks, yes publicly traded companies that anyone with a Schwab or Fidelity account can buy right now today, that give you exposure to blockchain in different ways. They are split into 2 categories. And do your own due diligence before you buy anything.....
The Big Boys
For those that prefer larger, more established companies, these 3 are bigger firms and making big investments into blockchain technology. If you are a believer that a way to wealth is not to pan for gold but to sell the picks and axes needed, then you will like these companies as an investment. All are providing vital tools necessary for enabling blockchain businesses.
Yes, that IBM. Their IBM Blockchain service was the first BAAS (Blockchain As A Service) offering for large and small businesses, mostly focused on the enterprise. Using Hyperledger's technology, IBM is letting businesses make the leap into blockchain without the huge tech investment typically required. Walmart uses IBM for food safety in their supply chain. As of March, more than 400 companies are using IBM's blockchain. It is a meaningful and fast-growing part of their business.
Amazon (AMZN) is a big player in this space thanks to their fastest growing business, AWS Amazon Web Services. E-commerce may be their best-known business, but it's not their most profitable. AWS is. Amazon, who calls their BAAS solution centralized but distributed, have an enterprise-ready chain using ConsenSys and their Kaleido system. Kaleido uses Ethereum so there is smart contract capability that IBM's BAAS may or may not have. If you are a big believer in the growth and impact of both blockchain AND Amazon's AWS division, then this might be something to consider for your portfolio.
Both BAAS systems (AMZN and IBM), make implementing, using and governing a blockchain much easier for a business or group of related businesses like growers, shippers, and distributors in a supply chain.
NVIDIA (NVDA) is a Northern CA based chip company. Mined currencies like Bitcoin, Litecoin, and Ethereum require the miners to have machines with fast, high memory chips. Two types of chips dominate the market, ASIC, and GPU. The ASIC market is all about China-based BitMain. They are the dominant player. On the GPU side, NVIDIA is one of the leading players as their chips have already been popular with gamers for years. Calculating how much of an impact miners have on NVIDIA's business is difficult since they don't track the difference between a miner or a gamer buying their chips, however, their own CFO said cryptocurrency was a driver of growth for their year-end 2017 and that mining boosted Q4 revenues.
The Little Guys
Most of the companies in this category have 3 things in common. They are publicly traded, they are small-cap companies, and they are trying to use blockchain as a primary driver of their business. This is not picks and axes, this is panning for gold.
One of the best new resources for public companies using blockchain as part of their operations is NXTAlpha, for which I am a contributor. Most of these stocks you can buy with a Schwab, ETrade or Fidelity account since most are OTC stocks or listed in Canada.
GoldMoney (TSX:XAU or OTCQB:XAUMF) is a fintech company in the precious metals industry. The big crypto thing about them is they are in the hot subsector of cryptocurrency custody through their BlockVault subsidiary. They use cold storage technology for their custody like Coinbase does with its vault program. They just signed a deal a couple weeks ago to provide custody for Malbex Resources and their customers. Malbex is a public company too, symbol COIN on the TSX. Here are 2 other unique features about GoldMoney:
- They are profitable
- They are in complete compliance with their government and have a known regulatory path (Canada)
HIVE Blockchain (OTCQB: HVBTF and TSXV:HIVE) describes themselves as the 'first public blockchain infrastructure company.' They are a miner who makes most of their money mining Ethereum and Ethereum Classic and through their partnership with cloud miner Genesis Mining. Their facilities are in Iceland and Sweden, stable countries with low energy costs and costs to keep the miners cool are lower as well. They just had their earnings call a few days ago where they outlined the growth in their mining capacity. This is a pure play on mining without buying the gear yourself.
HashChain Technology Inc. (TSXV: KASH; OTCQB: HSSHF) is another mining play. They differ from HIVE in that they have their mining setup so they can easily mine across many different currencies, not just ETH and ETC, AND they are a DASH Masternode. So if you like DASH, this is a good public company for you. They've added 6000 new miners, primarily for Bitcoin and DASH. Hashchain also has a unit doing cryptocurrency tax and accounting work as well.
Glance Technologies (CSE:GET.CN) (OTCQB:GLNNF) is a mobile payments firm using blockchain for their rewards program, which they are doing through a coin of their own, the Glancecoin. Their whitepaper for Glancecoin is available as a rewards token not just for Glance customers, but as a platform for other businesses to set up rewards programs too. If you like rewards programs as a use case for blockchain, then this is one you should look at.
GH Capital, Inc. (OTCQB: GHHC) is a fintech company working in the cryptocurrency payments space through their subsidiary, ClickDirectPay. Their stated goal is to become the 'Paypal of Bitcoin.' They want to make everything about using Bitcoin and accepting crypto payments easier. Through ClickDirectPay, merchants can accept 8 cryptocurrencies: BTC, BCH, ETH, LTC, Monero, DASH, Verge, and ZCash. If payments is your favorite use case for blockchain and you believe payments leads to adoption or adoption leads to payments, then this is one you should check out.
DMG Blockchain (OTC: DMGGF) does two things: Mining and Supply Chain blockchain fraud support. Their Blockseer unit is setting up a cloud mining, what they call Mining as a Service (MAAS) to target the Japanese market. As part of their fraud program, they have a AML program most often associated with banks. They recently approved a share buyback. Here are their 2nd quarter results, which include the announcement of adding Charlie Lee of Litecoin to their board.
Block One Capital
Not to be confused with Block.one, Block One Capital (OTC: BKPPF) is a direct investor into blockchain companies. Their biggest project is Finzat, a project to streamline the digital mortgage process. They recently sold a 90% stake in one of their projects, TG12 who is a currency miner, to one of the other companies on this list, Hashchain. Per their website, they have 3 active investments. The other two besides Finzat are in the environmental/natural resources space through protection of rainforests and in merchant data intelligence with a shopping app. With this stock, you can buy into an early stage crypto investment like VCs do, but are locked out to retail investors like us.
Remember, I'm no financial advisor so do your own due diligence about these companies. Ask yourself questions like 'Are They Profitable?' or 'Do you see a scenario for them where they could be profitable soon?'. Do you agree with the use case for blockchain they are supporting? Do you have the risk capital? As an advocate for retail investors, we often don't have that many great options but these are at least 10 (there are more) that you could consider if you want to add some crypto or blockchain to your portfolio in addition to or instead of buying Bitcoin.