8 Best Blockchain Stocks to Watch in 2024

Blockchain stocks, the shares of companies that are applying or have links to blockchain technology, are gathering momentum. Most people know that blockchain technology underpins cryptocurrencies, but its possible uses extend far beyond that. It’s helping to decentralize the financial system and streamline business workloads, such as managing supply chains.

The shared, immutable, decentralized ledger that blockchain is makes it easier to record transactions and track assets with improved traceability and security. Anything of value can be tracked on a blockchain network, without the need for third-party valuation and duplicate record keeping.

In this guide, we explore eight blockchain stocks worth watching by investors, most of which have seen double- or even triple-digit price increases over the past year. Read on for an analysis of our stock picks.

A Closer Look at the Top Blockchain Stocks

Let’s take and in-depth look at the top blockchain stocks that investors are tracking in 2024:

1. Coinbase Global – Benefiting from Bitcoin’s Rise

The resurgence in Bitcoin, including the rise of Bitcoin ETFs, has helped Coinbase grow the number of its active users, with nearly 40% of its clients using three or more Coinbase products in the first quarter. Coinbase will soon see competition from a legacy financial institution, as the Chicago Mercantile Exchange (CME Group) recently said it plans to offer spot Bitcoin trading to clients.

Even with additional competition, Coinbase, as an early crypto player, is in a good position to grow its user base and assets. In the first quarter, Coinbase grew revenue 112%, year over year, to $1.64 billion and had EPS of $4.4 compared to a loss of $0.34 in the same quarter a year ago.

Bitcoin continues to gain mainstream attention. With more institutional money flowing into Bitcoin, Coinbase should benefit from increased transaction revenues. It is also benefiting from its own substantial Bitcoin holdings. Its improved profitability should allow it to continue to reinvest in its business, keeping it ahead of any new competitors.

2. Block – Growing Along With Bitcoin

The digital payments and financial services company, founded by Twitter co-founder and former CEO Jack Dorsey, uses integrated blockchain technology to enable crypto trading and banking features through its Cash App. Its Cash App now has more than 21 million active users of Bitcoin. It takes pains to point out that only 3% of its company’s resources are dedicated to Bitcoin projects, but in truth, that’s where the company’s future lies. The payment provider created Bitkey, a self-custody Bitcoin hardware wallet to ease concerns investors may have with the stability of individual exchanges.

In the first quarter, Block’s revenue rose 19% year on year to $5.96 billion. If you take out the proceeds it made from its Bitcoin investments, revenue was $3.23 billion, 14% higher than a year earlier. The company continues to improve profitability with EPS of $0.74 in the quarter, which was up 363% from the same period a year ago.

Block gave investors encouragement when it raised it full-year profit guidance. It said it expects gross profit of $8.78 billion, 17% higher than last year, and 2% better than Block’s earlier estimate. It also raised its adjusted EBITDA estimate to $2.76 billion, from $2.63 billion earlier. It’s a big gain from the $1.18 billion in adjusted EBITDA in 2023.

3. Marathon Digital Holdings – Miner Benefits From Bitcoin Bonanza

The mid-sized crypto mining company, Marathon Digital Holdings, is looking to double its hash rate, the combined computational power used to mine and process transactions on the blockchain, by the end of the year, conceivably making it one of the most efficient digital mining companies. It began 2024 with 24.7 EH/s (exahashes per second) and now says it expects to grow that to 50 EH/s. The expansion is fully funded from the company’s liquid assets, it said.

Marathon had record revenue of $165.2 million in the first quarter, an increase of 223% from the same period a year ago, and net income of $337.2 million, which climbed 184% from a year earlier. The biggest factor was the 35% increase in Bitcoin’s price.

The company’s numbers would have been even higher except that it experienced several shutdowns in the quarter, due to equipment failures, transmission line maintenance and higher-than-usual weather-related curtailments. The company’s shares should also benefit from being added to the S&P SmallCap 600.

4. Microsoft – Checking Off All the Boxes

Microsoft, like IBM, is intertwining AI, the blockchain and the hybrid cloud, except that it’s doing all that to a greater extent. Its use of AI technology helped by its investment in ChatGPT-creator OpenAI has driven its shares 13% higher so far this year. The company is also working with blockchain Aptos Labs on AI and web3. In the third quarter of fiscal 2024, Microsoft had revenue of $61.9 billion, up 17% year over year, and EPS of $2.94, up 20% from the same quarter a year ago. The biggest driver for the surge was revenue from its cloud service, which grew by 23% year over year to $35.1 billion.

Unlike many tech companies, Microsoft offers a quarterly dividend, which it raised by 10% last year to $0.75 per share, the 19th consecutive year it has increased it. The payout ratio is only around 24%, so there is room for continued increases.

5. IBM – Slow but Steady Growth

IBM is connected to three of the biggest tech trends – the blockchain, the hybrid cloud, and AI. Its Blockchain Platform is a commercial version of the Hyperledger Fabric. The company provides service and productivity tools to help companies build, govern and operate their own blockchain systems.

In the first quarter, revenue rose 1.5% year over year to $14.5 billion and EPS jumped 70.3% to $1.72. The expects single-digit revenue gains this year. It also has a backlog of more than $1 billion in AI consulting projects.

IBM just raised its dividend by a penny to $1.67, raising it for the 29th consecutive. It has an above-average dividend yield of just short of 4%.

6. Iris Energy – Turning the Corner With Renewable Energy

One of the biggest problems with Bitcoin mining is that it isn’t eco-friendly. One Bitcoin transaction uses the same amount of energy it takes to power an average household for 42 days. Iris, on the other hand, says that 100% of the energy it uses is renewable. Its data centers are used both for AI cloud services as well as Bitcoin mining.

In the third quarter of fiscal 2024, the small company, also referred to as Iren, had revenue of $54.4 million, which rose 27% from the previous quarter, with all but $1 million of that from Bitcoin mining. The company said the rise was due to an increased operating hash rate, a measure of the computational power of its blockchain network, as well as higher Bitcoin prices. Net income was $8.6 million, compared to a $5.2 million loss in the prior quarter.

A key element for Iren is it had cash and cash equivalents of $259.7 million at the end of the quarter and no debt, which gives it a strong position to take advantage of growing Bitcoin interest. As of May it was producing 10 EH/s (exahashes per second, a measure of computing power), but now plans to expand that to 30 EH/s this year, raising an earlier goal of 20 EH/s.

7. PayPal – Benefits from Three Major Trends

PayPal Holdings was spun off from eBay in 2015 and with a market cap of $67.63 billion, it’s now more than twice the size of its parent company. The payment provider benefits from several long-term trends: the adoption of cryptocurrencies, the ubiquity of e-commerce and cashless transactions. Its mobile wallet Venmo can also buy and sell cryptocurrency and is increasingly used for over-the-counter payments.

The company has more than 427 million active users and it benefits from each transaction they make. Total payment volume (TPV) rose 14% year over year to $403.9 billion in the first quarter. PayPal also reported revenue of $7.7 billion, which was up 9% from the same period last year. EPS climbed 18% year over year to $0.83. The company also spent $1.5 billion on stock repurchases in the quarter.

The stock hasn’t exactly boomed (it’s up less than 2% over the past year.) One of the reasons for the slow rise is that this year is expected to be a transitional one as the company reinvests in its business. It predicted 2024 EPS to be $3.65, compared to $3.84 in 2023.

8. FedEx –  Delivering on Dividend, Buybacks

The use of blockchain technology has helped FedEx become more efficient, so while revenue fell in 2023 and then again in the first quarter of 2024, its net income rose in both quarters. The blockchain helps improve reliability, on-time delivery and to prevent snags in the delivery chain. The company credited its DRIVE initiative, which uses the blockchain, for helping drive down costs and improve efficiency. 

In the first quarter, it reported revenue of $21.7 billion, down 2.2% from the same quarter a year ago. Net income, on the other hand, was up 14% year over year to $879 million and EPS was $3.51, up 15% from the first quarter of 2023. 

FedEx rewarded investors with a $1 billion share repurchase and said it expects to buy back an additional $500 million of its shares in the fourth quarter. It also began a new $5 billion share repurchase program. FedEx also increased its quarterly dividend by 9% last year to $1.26 per share, the third consecutive year it increased it by 9% or more.

Are Blockchain Stocks a Good Investment?

There’s a good reason why more companies are making investments in the blockchain. SkyQuest estimates that the blockchain market will have a compound annual growth rate of 80.8% through 2031, becoming a $1.3 trillion market by that time. That’s a phenomenal CAGR and a very good reason for investors to at least consider blockchain stocks.

The blockchain is closely associated with cryptocurrencies, but there are plenty of companies that are using the blockchain to become more efficient, giving them a competitive advantage. Finding these companies can give investors an edge as well.

How to Pick Blockchain Stocks for Your Portfolio

There are several ways to approach investing in blockchain stocks. It’s a new and exciting technology with plenty of growth potential, but many blockchain companies are volatile stocks, so investors need to do their research.

Understand What the Blockchain Means

The blockchain is a digital public ledger that logs transactions. In the blockchain, each block of information is verified digitally and given its own hash and then added to the ledger. Some companies, such as digital miners Iris Energy and Marathon Digital, benefit from the manufacture and sale of cryptocurrencies, using the blockchain. Cryptocurrencies use each new block to create a new unit of currency. 

Beyond cryptocurrencies blockchain technology also underpins decentralized finance. Companies, such as Coinbase Global, Block or PayPal, allow customers to carry out simple transfers of money or digital assets, or complex financial transactions are without any third-party involvement. Other companies, such as FedEx, Nvidia or Microsoft, that use the blockchain in other ways, such as tracking their supply lines to better analyze weaknesses and strengths, and save costs that way.

Look for Growth With Improving Profitability

Analyzing blockchain companies isn’t that different from analyzing any type of stock. While you may expect more revenue growth than from, say, a value stock, it’s still important to invest in companies with sound financials. Recent scandals involving cryptocurrencies show that it makes sense to invest in major cryptocurrencies and if you’re investing in a company that uses the blockchain, make sure it isn’t just window dressing to interest investors, but that its use is helping the company become more profitable.

Consider Investing in a Blockchain ETF

There are several ETFs with exposure to blockchain stocks. Investing in an ETF gives an investor the chance to diversify and is considered less risky than selecting one blockchain stock.

Some of the more popular blockchain ETFs include:

• the Global X Blockchain ETF (NASDAQ: BKCH), which tracks the Solactive Blockchain Index of companies involved in blockchain technology and its applications,
• the Amplify Transformational Data Sharing ETF (NYSEARCA: BLOK), an actively managed ETF that specializes in companies developing and applying blockchain technologies globally, and
• the Bitwise Crypto Industry Innovators ETF (NYSEARCA: BITQ), which tracks an index designed to identify pioneering companies that generate the majority of their revenue from crypto business activities.
  

Where to Get Blockchain Stock Tips

A good place to find blockchain stock information is AltIndex, a subscription-based service that uses alternative data source, such as social media, and artificial intelligence (AI) to rate stocks. AltIndex updates its data throughout the day.

Begin with the company’s constantly updated ranking of best crypto and Bitcoin mining stocks, which rates companies using AI score, updated every half an hour with real-time share prices. The AI score relies on several datasets, to show which stocks are likely to be active. Stocks are scored from 1 to 100, simplifying the selection for investors. AltIndex relies on web searches, customer satisfaction ratings, social media, and app downloads, to help it analyze a company.

AltIndex has more than 10,000 members and provides more than 100,000 stock insights and alerts each day, and has a strong win rate of 75% from its AI stock picks.

You can try AltIndex’s Starter Plan for just $29 a month and receive stock picks directly to your email, as well as many other useful features.

Conclusion

The blockchain industry is experiencing significant growth, and blockchain technology has the potential to disrupt many sectors. 

While the potential rewards in blockchain investing are high, so are the risks. Carefully consider your investment goals and risk tolerance before entering the blockchain stock market. 

Choose companies with sound financials and a clear strategic use of blockchain, and consider diversifying your portfolio through a blockchain ETF, such as the Global X Blockchain ETF, or the Bitwise Crypto Industry Innovators ETF. There are also resources available, such as AltIndex, to help you research and identify promising blockchain stocks. 

References

https://s27.q4cdn.com/397450999/files/doc_financials/2024/q1/0dac9418-51fc-43c7-bb60-ee8b65a9bebe.pdf

https://s29.q4cdn.com/628966176/files/doc_financials/2024/q1/Shareholder-Letter_1Q24_Block.pdf

https://ir.mara.com/news-events/press-releases/detail/1357/marathon-digital-holdings-reports-first-quarter-2024-results

https://www.microsoft.com/en-us/investor/earnings/fy-2024-q3/press-release-webcast

https://www.ibm.com/downloads/cas/Y23EY3W8

https://irisenergy.gcs-web.com/news-releases/news-release-details/iren-reports-third-quarter-fy24-results

https://s201.q4cdn.com/231198771/files/doc_financials/2024/q1/Q1-24-PYPL-Earnings-Release.pdf

https://investors.fedex.com/news-and-events/investor-news/investor-news-details/2024/FedEx-Reports-Higher-Third-Quarter-Diluted-EPS-of-3.51-and-Adjusted-Diluted-EPS-of-3.86/default.aspx

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Jim Halley

Editor

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Jim Halley

Editor

I am an experienced journalist who has also worked as an editor and writer at the Savannah Morning News, Salt Lake Tribune, USA Today, Stars and Stripes, and The Motley Fool. I spent the first half of my career in sports journalism, but in recent years have switched to writing about my other passion, stocks, particularly healthcare, real estate and consumer staples stocks. I've won numerous journalism awards from the Associated Press and state press associations and have been a judge for the Georgia Sportswriters Association. I've written one non-fiction book, Just One More Time, about Georgia Southern football, and…

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