Forget crypto, try these 3 blockchain stocks instead

Invest in blockchain stocks instead of cryptocurrencies Bitcoin (BTC USD) can be more of a speculative option. This can lead to higher overall returns. I view investing in blockchain stocks as a type of synthetic leverage. It offers the potential to increase both profits and losses for investors.

While investing in cryptocurrencies exposes investors to certain risks, the risks of investing in blockchain stocks are greater. Investors need to be concerned about company-specific, market-specific and idiosyncratic risks that are not present in the broader crypto markets. However, these risks are also offset by corresponding upside potential. Most blockchain stocks have large amounts of cryptocurrency on their balance sheets. They also have business segments that are entirely dependent on the health and performance of the industry. So if Bitcoin goes up, all other things being equal, the valuation of these companies will also go up.

However, blockchain stocks can also generate profits from other business segments. This can increase their intrinsic value and therefore be worth more in the long term. Furthermore, it is very likely that these companies will pay dividends in the future. Therefore, buying these companies now, while they are still relatively cheap, could result in a significantly lower cost base in the future.

I think investing in blockchain stocks could be a good move as we prepare for the peak of this year’s crypto rally. Here are three companies you should consider.

Riot Blockchain (RIOT)

Riot Blockchain (NASDAQ:REVOLT) focuses on Bitcoin mining. The goal is to become a leading Bitcoin producer in the US, with plans for technological upgrades and expansions.

The company has ambitious expansion plans for this year, despite expectations of a challenging environment. This is due to the Bitcoin halving in 2024, which is expected to halve Bitcoin production. Still, the company is expected to triple its mining capacity in 2024. Therefore, it is still expected that the price of the asset will increase for investors.

The framework for these efforts is the fact that Riot signed a contract in June 2023 long-term purchase contract with MicroBT. Riot ordered 33,280 Bitcoin miners for the Corsicana facility, with another order of 66,560 Bitcoin miners announced in December 2023. Once all of RIOT’s miners are deployed, the company will have a total hash rate capacity of 38 EH/s. This makes it one of the top cryptocurrency mining stocks in the United States.

The consensus among analysts is: “Moderate purchaseRIOT shares. Price targets suggest an upside potential of 11.6% from current price. However, I think it is one of those blockchain stocks to buy. Owning stocks might be the closest thing to owning Bitcoin that stock investors can get. Keep in mind that RIOT also benefits from Bitcoin mining fees, making it an attractive option.

Block (SQ)

block (NYSE:square) operates Cash App and payment processing for businesses. The company has also invested significantly in Bitcoin and is developing crypto technology with its team Spiral.

I think SQ stock could be a good bet this year since it recently upgraded its guidance. The company has increased its Profit forecast for the full year by more than $200 million, representing a profit of at least $2.63 billion, representing growth of at least 15% year over year. For the first quarter of 2024, Block expects adjusted core earnings of between $570 million and $590 million, beating analysts’ expectations of $511.76 million. Despite a net loss of $0.02 per share last quarter, the company’s fourth-quarter revenue rose 24% to $5.77 billion, with a significant portion of that excluding Bitcoin sales.

Wall Street analysts have one Strong Buy consensus. on block, with 32 analysts recommending a “moderate buy.” The average price target for SQ shares is $82.44, suggesting a potential upside of 5.1% from current price.

Cash App has 55 million monthly active users, many of whom are experienced and familiar with FinTech due to the nature of the app, with more coming into the ecosystem every quarter. Furthermore, analysts also expect this on an EPS basis See an incredible jump from 0.02 in fiscal year 2023 to 3.15 in fiscal year 2024; that’s an increase of 15,640.67%!

Predictions like these cannot be ignored, and that is why SQ is one of the blockchain stocks to consider.

Visa (V)

Visas (NYSE:v) has been investing in blockchain since 2016, developing technologies such as Visa B2B Connect for cross-border payments and Visa Fintech Fast Track for crypto wallets.

The company started its 2024 fiscal year on strong note with significant financial growth. In the first quarter of 2024, the company reported a 9% increase in net sales to $8.6 billion. This growth was driven by an 8% increase in payments volume and a 16% increase in cross-border volume (excluding intra-European transactions).

Analysts remain optimistic about Visa’s performance and predicts steady growth. For the 2024 financial year, earnings per share are (EPS) estimates the average at $9.92, with projections rising to $11.16 in 2025. Revenue forecasts also reflect positive growth, with an average estimate of $35.86 billion for 2024, rising to $39.59 billion by 2025.

Visa is simply one of those stocks that offers great value to investors, and its near-term results and prospects make it one of those blockchain stocks that investors should pay attention to moving forward.

At the time of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the author, subject to InvestorPlace.com Disclosure Guidelines.