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Investing in blockchain stocks could cause a hard pass for some investors who believe it is an entry point into cryptocurrency. It is used in peer-to-peer transactions, which is one of the core ideas of digital currencies. But the potential of blockchain technology goes far beyond Bitcoin or Ethereum.
One of the best ways to understand blockchain is that it gives individuals and organizations the ability to store and secure their data without relying on third parties. This means a decentralized environment. As Divya Premkumar summarized Investor PlaceBlockchain, “…has created a paradigm shift in the way we own and manage data while redefining traditional business models.”
This paradigm shift is the reason why the sector is expected to grow manifold average annual growth rate of 52.8% from now until 2032. And that’s why you should think about how you can invest in blockchain stocks that still allow you to own stocks that fit your broader investment philosophy.
Visa (V)
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One of the reasons to believe that blockchain technology is the future is that a company likes it Visas (NYSE:v) took it on so readily. This is about how money is expected to move in the future. And companies like Visa and MasterCard (NYSE:M.A) didn’t want to be left behind.
Cryptocurrency is a big part of the story. After all, Visa’s revenue stream is based on transactions. The company didn’t want to be left out when it came to integrating blockchain and crypto. In fact, Visa has an entire section of its website dedicated to this: “Unlock crypto opportunities” For companies.
My point is that owning V shares makes sense for many investors even without blockchain. V stock’s 10-year total return is 440%. And its investment in blockchain is a proof of concept for the technology and another reason to believe it’s a stock that’s there for you if you need it in the future.
Amazon (AMZN)
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Another option among blockchain stocks that doesn’t require you to leave your comfort zone is Amazon (NASDAQ: AMZN). The company is an e-commerce giant also known for its Amazon Web Services (AWS). Here the company is making progress in artificial intelligence. And here the company also has an emerging blockchain story.
The AWS platform is home to Blockchain managed by Amazon This includes free blockchain training on the AWS Skill Builder. It is an opportunity for AWS customers to create and manage a personal blockchain network.
At the moment this area is left to customers using Web3 projects. But in the future, there will likely be opportunities to use blockchain in the company’s legacy e-commerce business.
The takeaway for investors is that, like Visa, there are many reasons to own AMZN stock today that have nothing to do with blockchain. But Amazon appears to be in a unique position to increase sales of this technology in the coming years.
Global X Blockchain ETF (BKCH)
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Exchange Traded Funds (ETFs) have their place in a portfolio. When it comes to investing in blockchain stocks, the Global X Blockchain ETF (NASDAQ:BKCH) is one of the leading options. The fund launched in 2021 and has over $122 million in assets under management (AUM).
The Fund holds 27 holdings as of July 31, 2024 and 69% of the Fund’s holdings are in U.S.-based companies. But some of them are not household names. For example, you won’t find Visa or Amazon in this fund’s holdings. But you get in touch NVIDIA (NASDAQ:NVDA), which are needed to expand the technology.
The fund has gained over 33% in the last 12 months, but has fallen over 40% since inception. This should reassure you that this is a fund with great upside potential. Additionally, it has a reasonable expense ratio of 0.50% and even pays a dividend, which is currently 2.76%.
At the time of publication, Chris Markoch did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publishing Guidelines.
At the time of publication, the responsible editor had neither direct nor…
indirectly) all positions in the securities mentioned in this article.