How to Invest in Blockchain
Interest in cryptocurrency has been on the rise. Here’s how to invest in blockchain.
While it’s likely that many are unfamiliar with blockchain it’s been around a lot longer than one might think.
In short, blockchain is an underlying method of the digital currency, bitcoin, which allows for permanent records to be had of the blocked transactions. As described here, “at any time people can see those changes in real time,” giving blockchain a sense of transparency.
As it goes with other areas in the world of technology, interest in cryptocurrencies–such as blockchain–has gained traction over time. According to Seamus Cushley, a PwC expert, over $1.4 billion was invested in blockchain startups in the first nine months of 2016. With interest in the sector growing, here the Investing News Network (INN) breaks down the basics of how to invest in blockchain so that investors can better understand how to step into this space.
What is blockchain?
Before asking “how to invest in blockchain,” it’s important to know what the cryptocurrency is first. As mentioned above, blockchain is technology that enabled the digital currency bitcoin to be safe and transferable. The story more or less starts in 2008, when Satoshi Nakamoto published a paper detailing bitcoin and its ability for two people or companies to transfer payments without the need for a financial institution. To guarantee the payment a blockchain ledger was created, connecting the transactions to a digital signature. This was then verified by complex algorithms allowing the new currency to be trusted.
A blockchain begins with a genesis block which births other blocks, or bundles of transactions. The parent block is always the previous block. The ‘tip’ or ‘top’ is the most recently added. Then, the chain becomes fossilized under layers of children and subsequent generations of grandchildren.
More specifically, there are a number of examples of different uses of blockchain. Unsurprisingly, banking is one one of them. As noted, Swiss and UK banks have begun testing blockchain as acceleration methods as tasks in the back-end back and settlements. The publication further examples payment or money transfers, uses in cybersecurity, networking and the internet of things, and online music as areas that have begun implementing blockchain.
How to invest in blockchain
As the technology continues to grow there will be many opportunities for investors. There will be growth from banks and financial institutions that are leveraging the technology successfully. Blockchain is not a physical asset you can purchase but you can buy stock in fast growing public companies who are selling solutions leveraging blockchain technology.
To that end, there are a variety of ways for investors who are looking to the answer on how to invest in blockchain, detailed below.
Stocks
Investing in stocks is the obvious place to start when thinking of “how to invest in blockchain.” While the list of blockchain stocks is relatively short, there are at least several for investors to choose from, including:
•360 Blockchain (CSE:CODE), a company that looks to provide financial services to both private and public companies, including finance advisory, merchant banking, IPO consulting and business advisory services.
•BTCS (OTCQB:BTCS), which is the first publicly-traded blockchain company in the US.
•BTL Group (TSXV:BTL), whose blockchain services are used in a variety of industries, including banks and fantasy sports.
•Coinsilium Group (ISDX:COIN) develops as well as invests in blockchain companies. It was the first blockchain company to file an IPO.
•DigitalX (ASX:DCC) uses blockchain to develop fintech products to build secure ledger systems, particularly in mobile bill payments.
•First Bitcoin Capital (OTCMKTS:BITCF) focuses on acquiring bitcoin startups and funding companies through developing bitcoin software and hardware.
•HIVE Blockchain (TSXV:HIVE), looks to create a bridge between the blockchain market to traditional capital markets, and is strategically partnered with Genesis Mining, a cryptocurrency mining hashrate provider.
Crowdfunding
While it may not be an immediate choice on how to invest in blockchain, crowdfunding platforms are an attractive way for investors to jump into blockchain investing. As Ameer Rosic, CEO of Blockgeeks describes, crowdfunding is an easy way for innovative projects to obtain money.
This is where blockchain steps in. Rosic states blockchain crowdfunding allows startup companies to come up with their own digital currencies to sell.
Examples of blockchain crowdfunding platforms include:
•BnkToTheFuture, whose platform allows for investors to invest in fintech companies and funds.
•QTUM permits the execution of “smart contracts and decentralized applications.” It also provides easy ways for standardizing the workflow of business and smart contract development.
•Waves, which is a crypto-platform for token assurance, transfer and blockchain trading.
Putting it simply, the increase in demand from companies who are putting blockchain at the heart of their operations and consumers demanding the faster and cheaper services blockchain enables continues to drive growth of the sector and, in turn, more opportunities for how to invest in blockchain.
How to invest in blockchain: market outlook
Looking ahead, blockchain’s future outlook is certainly a bright one. As research conducted by Market and Markets suggests, the blockchain market is expected to be worth $2.3 billion by 2021, representing a compound annual growth rate of 61.5 percent between 2016 and then.
Another research firm, Grand View Research, suggests the market will grow to $7.74 billion by 2024, citing the financial sector continuing to adapt new technologies–and healthcare, for that matter–fuelling that growth.
That said, in 2017 it’s expected that at least 15 percent of banks will adapt blockchain technologies, with that number increasing to 66 percent by 2020.
In short, it’s clear to see that the cryptocurrency market is here for the long-haul, which should ease the minds of those who have been wondering on how to invest in blockchain.
Additional information on Blockchain stock investing — FREE
11 Blockchain Technology Stocks
Banks, financial institutions and many others are adopting blockchain technology faster than anticipated. INN takes a look at public companies taking advantage of this rapidly-growing sector.
It’s getting harder to ignore the fact that blockchain is on the rise, particularly as more banks and financial institutions are adopting the technology faster than anticipated.
Case in point, IBM (NYSE:IBM) released a report in 2016 suggesting that 15 percent of all banks will be using the technology in 2017. By 2020, the firm states that 66 percent of all banks will have blockchain in commercial production.
On a broader scale, a Market and Markets report states that the blockchain technology market size will be worth 2.3 billion by 2021, increasing at a compound annual growth rate (CAGR) of 61.5 percent. In other words, there’s room for plenty of opportunities for investors to benefit from in this exciting–and expanding–market.
Global Blockchain Technology Market’s research report is a little more conservative, projecting that blockchain technology will grow at a CAGR of 55.59 percent between 2017 and 2021.
The banking and finance industries aren’t the only ones adopting blockchain technology. For example, it has been used in securing elections, and big companies are also making the leap into blockchain; Capital One has confirmed a blockchain project, partnering with Gem on healthcare claims.
Putting it simply, there’s a wealth of opportunity to be had in the blockchain industry, and it’s only getting started. As such, here is a look at publicly-listed blockchain technology stocks for your consideration. All numbers below are current as of November 20, 2017 at market close.
1. 360 Blockchain (CSE:CODE)
Market cap: $28.99 million; current share price: $0.26
The first on our blockchain technology stocks list is 360 Blockchain, formerly 360 Capital Financial, that changed its name to 360 Blockchain and began trading under the symbol CODE on October 10. Since going public, the company has announced a joint venture with NOS Blockchain, a subsidiary of Nerds on Site, that its acquisition SV Cryptlab entered into contracts to mine ethereum and Zcash, and the establishment of 360 Blockchain USA, a subsidiary to focus on developing and investing in blockchain technologies in the US.
360 Blockchain looks to provide financial services to both private and public companies, including finance advisory, merchant banking, IPO consulting and business advisory services.
2. BTCS (OTCQB:BTCS)
Market cap: $21.92 million; current share price: $0.11
Next on our blockchain technology stocks is BTCS. The company is also the first blockchain-focused public company in the US, and was ahead of its time in exploring digital currency ecosystems. The company self-describes itself as an “early mover” in the digital currency ecosystems sector.
The company’s CEO, Charles Allen, was interviewed by Bloomberg explaining the company’s mission to “gather a currency that can be spent on goods and services”, using bitcoin to buy products like televisions.
In August, BTCS announced it had signed a non-binding letter of intent to merge with Blockchain Global. On October 11, it was announced that BTCS had secured $1 million in financing, $250,000 of that being bitcoin. Near the end of October, BTCS announced it had closed the remaining finance balance in moving forward with its planned merger with Blockchain Global.
3. BTL Group (TSXV:BTL)
Market cap: $194.44 million; current share price: $9.59
BTL is a Vancouver-based company that offers blockchain solutions across multiple industries–from banks to energy, and even to fantasy sports. BTL has a money transfer platform using distributed-ledger-technology and smart contracts, called Interbit.
On that note, the company announced in June that it is “taking steps towards a go-to production phase” of the Interbit, having completed its European energy trading pilot. As noted in the press release, the 12-week pilot included building the framework on an energy trading confirmation solution to BTL’s platform, which was tested in 8 different scenarios.
“At BTL we truly believe that, by using blockchain technology and our proprietary platform, Interbit, there is a better and more efficient way for enterprises to build applications,” Guy Halford-Thompson, cofounder and CEO of BTL said. “Having demonstrated the reductions in risk and cost savings that are achievable we now have an opportunity to deliver the first successful blockchain based application to the energy market. We are also very excited that the pilot has enabled participating companies to better understand the benefits of Interbit and identify other areas in their organizations where they can apply it.”
At the end of August, BTL Group announced the beta launch of Interbit as it becomes closer to being launched in live commercial environment. In early November, BTL Group announced that it had increased the size of the brokered offering led by GMP Securities to $10.7 million through the offering of roughly 2.1 million units at $4.90 per unit.
While the company’s headquarters are in Vancouver, BTL Group also operates in Calgary and Canary Wharf in London, England.
4. Coinsilium Group (NEX:COIN)
Market cap: GB$12.01 million; current share price: GB$11.13
Coinsilium Group is a London-based blockchain technology investor that develops and invests in blockchain technologies, aiding new fintech applications. The company is the world’s first recognized IPO for blockchain technology company and lists on the NEX Exchange, a recognized investment exchange as per the Financial Services and Markets Act 2000.
According to its website, Coinsilium is relatively new in the blockchain field: the company has been actively involved in “accelerating seed-stage blockchain tech ventures” ever since 2014. Since then, the company has accumulated interest from blockchain companies such as Factom, RSK Labs, Minebox and Indorse.
At the beginning of August, the company announced that it had completed the sale of interest in SatoshiPay, a company that processes nanopayment transactions usually in the form of bitcoins. Meanwhile, closer to the end of August Coinsilium Group announced a formation of its wholly-owned subsidiary, Terrastream, which aims to build an enterprise standard blockchain-powered platform for token-based alternative funding solutions. In late September Coinsilium announced a purchase of 5 million shares at 2.25 pence per share. By November, the company had signed a memorandum of understanding with United Mobility Technology. At the end of November, Coinsilium had acquired a 30 percent interested in StartupToken Limited, which has had a positive boost to its market cap and share price.
5. DigitalX (ASX:DCC)
Market cap: AU$109.25 million; current share price: AU$0.23
Next on our blockchain technology stocks list is DigitalX. The company provides ICO advisory services, blockchain consulting services, and blockchain-related software development.
More specifically, its mobile product AirPocket provides consumers secure cross-border payments and remittances from over 30,000 payout locations in 14 countries with a heavy presence in North America and South America. DigitalX’s Bankera launched an ICO on August 28, which will provide payments, deposits, loans, and investments and will be supported in fiat currencies and cryptocurrencies, including bitcoin, ethereum, DASH, NEM, and ERC20 compliant tokens, among others.
In September, it was announced that DigitalX and Stargroup (ASX:STL) have joined forces to develop “two way” bitcoin ATMs to buy and sell bitcoin.
6.eXeBlock Technology (TSXV:XBLK)
Market cap: $92.11 million; current share price: $1.50
eXeBlock is relatively new, having officially begun trading on the Canadian Securities Exchange on November 16. Headquartered in Nova Scotia, eXeBlock’s services include blockchain technology consulting, blockchain application development, and custom blockchain development.
7. Global Blockchain Technologies (TSXV:BLOC)
Market cap: $43.61 million; current share price: $2.38
Formerly Carrus Capital, Global Blockchain Technologies is also relatively new in the blockchain sector, having just announced its name change effective October 5.
Global Blockchain provides investment services and was founded in Vancouver in early 2010.
8. HIVE Blockchain (TSXV:HIVE)
Market cap: $814.12 million; current share price: $3.40
HIVE Blockchain is also relatively new to the scene but is already making a name for itself in the market. HIVE looks to “build a bridge” between the blockchain market to traditional capital markets, and is strategically partnered with Genesis Mining, a cryptocurrency mining hashrate provider.
On October 10, the company announced a $7 million equity investment by Genesis Mining. Then on October 11, HIVE announced it had closed a $30 million bought deal financing. In mid-November, HIVE announced it had closed a $34.5 million bought deal financing, proceeds of which will be used for the second phase of construction of the digital currency mining data center in Sweden.
9. Marathon Patent Group (NASDAQ:MARA)
Market cap: $48.74 million; current share price: $4.82
While not a pure play blockchain company, Marathon Patent Group is an IP licensing and commercialization company that acquires and manages IP rights from a number of sources. Case in point, in early November the company announced it will acquire Global Ventures, a digital asset technology company that mines cryptocurrencies.
10. MGT Capital (OTCMKTS:MGTI)
Market cap: $129.67 million; current share price $2.67
MGT Capital is currently acquiring and adding to its diverse portfolio of cybersecurity technologies, but is also in the business of bitcoin mining. According to its website, MGT is in a strong position to become the “preeminent” crypto-mining enterprise in the US. As it currently stands, MGT Capital has a number of locations in central Washington state.
In mid-October, the company announced an update on its cryptocurrency operations, highlighting that its bitcoin mining operations are projected to generate over $2 million in monthly revenue. On December 5, MGT Capital provided an update on its cryptocurrency operations, stating it had executed a purchase order with Bitmain Technologies for a further 500 S9 Antminer mining rigs, which should be expected to ship in Q1 2018.
11. Riot Blockchain (NASDAQ:RIOT)
Market cap: $124.23 million; current share price: $14.93
Riot Blockchain is also relatively new to the blockchain scene, having changed its name from Bioptix to Riot Blockchain at the beginning of October. Formerly a biotech company, Riot Blockchain is the first mover on the NASDAQ as a pure play blockchain company. Riot hopes to gain exposure to the blockchain ecosystem through investments in the sector, specifically through bitcoin and ethereum. The company has partnered with Coinsquare by way of a strategic investment.
