Profit from the blockchain potential without the Bitcoin risk with these Bitcoin stocks
Bitcoin went on a wild ride in 2017, surging 25-fold before running into problems towards the end of the year. The cryptocurrency and blockchain technology could be the future of digital payments and security which could mean that those massive returns aren't over.
But anyone investing in Bitcoin through the last two months of the year knows just how dangerous it can be.
The price of a Bitcoin plunged 40% in just a few days and a lot of new investors panicked, losing thousands of dollars.
I’ve got a way for you to beat that fear of missing out, to get in on the huge returns in bitcoin but without all the risk of bitcoin investing.
I've found three companies that share in that long-term Bitcoin potential but without all the risk. These three stocks returned an average of 39% last year, more than twice the huge run in the stock market
These stocks have more than just bitcoin going for them so you don’t have to worry about a crash.
I’m going to be adding a lot more great investing strategies to the YouTube channel this year including a weekly Q&A video to answer your questions about the stock market and reaching your investing goals.
I’m excited about reaching the community on a whole new level through these videos. Click through to subscribe to the channel so you don’t miss a single video.
Will Bitcoin Investing Still Make You Rich?
I posted last week why all the new Bitcoin investors would regret the decision eventually. It isn't because of the potential for a huge drop in the price, like we've seen, but in the investing behavior making money will create.
Bitcoin turns investors into gamblers and all gamblers eventually lose.
If you've made money in Bitcoin, I'm happy for you. If you've been able to get your money out and do something with it, that's great. But understand that Bitcoin isn't a long-term investment. There are no fundamentals, there's no intrinsic value for the cryptocurrency.
There is a huge potential in the blockchain technology. The new global ledger-system is a level of security that we've never seen, security we desperately need against the rise of hackers. The Blockchain technology could touch every industry.
That potential could be one of the biggest investment themes of the decade.
So how do long-term investors tap into that blockchain potential without stressing out over bitcoin investing?
3 Bitcoin Stocks with 10-Fold Potential but Without Bitcoin Risk
I went back to my equity analyst roots to find three companies benefiting from the rise of blockchain and Bitcoin.
The three stocks below are better than Bitcoin because they benefit from the short-term investor interest but they also have solid business models that go beyond Bitcoin. All three companies could survive a Bitcoin bust and will continue to make money for years.
HIVE BlockChain Technologies (HIVE) is the first publicly listed blockchain infrastructure company. It’s mining cryptocurrencies at an industrial-scale and has the potential to participate in the future of blockchain. The market’s still divided on whether Bitcoin is a bubble but blockchain is here to stay and could touch every industry.
Hive is still a very small company at just under $300 million but is growing revenue at 16% a year. It’s going to be volatile, especially if the price of bitcoin falls but it should keep growing as blockchain becomes widely accepted and used.
NVIDIA Corp (NVDA) is a leading designer of graphics chips, especially for gamers and data centers. Its chips are in many of the future of computing including self-driving cars and artificial intelligence. Where NVIDIA is connected to bitcoin is in the use of these graphics cards to mine cryptocurrencies. The company recently reported sales up 56% from last year, driven by the boom in crypto-miners.
The company rolled out a new chip, the Volta, a few months ago that is 100-times faster on AI jobs than its previous generation of chips so this is a company that is innovating and has a huge future. It’s bounced 87% this year and trades for 47-times earnings so there may be times when the price will sell off but it’s a great long-term pick.
CME Group (CME) operates the Chicago Mercantile Exchange, like the stock market except for futures trading. The futures market is used for risk management by companies as well as by investors so we’re talking trillions of dollars changing hands through trades and the CME makes it’s money on every single transaction. The exchange just started offering Bitcoin futures, a way to invest in bitcoin as well as a way to reduce the risk of a bitcoin crash by shorting the futures against bitcoin holdings.
CME is another one that has seen its shares jump this year, up more than 33%, but this is a leader in exchanges with lots of cash flow. In fact, CME pays a dividend so you’ll get that cash flow every few months from your investment.
You can buy shares of each of these Bitcoin stocks through an Ally Invest account. I like Ally as one of my preferred online platforms for it's low fees and customer service. I always recommend no more than 5% of your total portfolio in a single stock and you might consider sticking to 3% or less in one name. That means no single company can destroy your portfolio if it crashes.
I’ve got two more stocks and one bitcoin investing strategy you absolutely want to avoid coming next week. In fact, one of these stocks has beaten them all with a 175% gain last year and is doubling sales every year. It's not too late to get in on the Bitcoin boom but be careful that you avoid the eventual bust.