Cryptocurrencies have their ups and downs but blockchain stocks show promise of significant long-term returns. Blockchain is primarily known for powering cryptocurrency transactions, but the technology’s use cases go far beyond that.
In its simplest terms, the blockchain platform allows users to store data and initiate peer-to-peer transactions. The technology has revolutionized industries such as finance and real estate by ensuring transactions remain secure in a decentralized environment. This has created a paradigm shift in how we own and manage data while redefining traditional business models.
Given the immense potential of blockchain technology, several companies are investing heavily in the space. Some have made it a core component of their day-to-day operations while others offer blockchain-related services. According to data from Fortune Business Insights, the global blockchain market is expected to grow from $27.84 billion in 2024 to $825.93 by 2032. That reflects a compound annual growth rate (CAGR) of 52.8% per year.
In other words, investing in companies with exposure to blockchain can prove to be a worthy endeavor for market-crushing returns. On that note, here’s a look at three companies making waves in the blockchain space.
Coinbase (COIN)
As the world’s largest cryptocurrency exchange, Coinbase (NASDAQ:COIN) has a lot to gain from the growth of blockchain technology. The company initiated approximately 312 billion transactions in Q1 and boasts a user base of 110 million across 100 countries.
The success of its platform was evident in its recent earnings report. Coinbase breezed past analyst expectations, reporting $1.6 billion in total revenue, up 72% from the prior year. Institutional trading revenue which grew 133% year-over-year (YOY) drove much of this growth.
Hidden beneath the layers of its impressive financials is Coinbase’s intriguing new venture in the blockchain arena, a platform called Base. Base is a layer-2 platform that will be built on top of Ethereum (layer-1). This second layer will track individual transactions and post them in batches on the Ethereum network. Executing transactions in batches, rather than individually, makes the process more cost and energy-efficient.
Although Base currently makes up approximately 5% of total revenue, this new technology has the potential to enhance the user experience while generating substantial returns.
If you’re willing to bet on the future of blockchain, COIN is one of the best blockchain stocks on the market today.
Mastercard (MA)
The shift to a cashless economy has been a boon for the payment processing leader Mastercard (NYSE:MA). Its core business involves facilitating transactions between merchant banks and financial institutions. While the emergence of blockchain technology could be seen as a potential threat to its market share, Mastercard was quick to adopt the technology to enhance its offering.
A core component of Mastercard’s blockchain strategy is its Multi-Token Network (MTN). This is a blockchain-powered platform that allows users to transact digital assets safely and securely through tokenization. Tokens are essentially a virtual representation of your checking and savings accounts.
In addition to this, the network will also enable app developers to build the next generation of De-Fi apps. Several companies including Coadjute and Pairpoint are already utilizing the platform’s services. Mastercard is also actively looking to integrate financial institutions on the MTN to make the solution more attractive to app developers. After several months of beta testing, the application is now a testbed for payment and commerce capabilities in certain countries.
Mastercard’s blockchain venture shows plenty of long-term potential. Moreover, its strong position in the payments space makes MA one of the best blockchain stocks on the market.
Block (SQ)
Formerly known as Square, Block’s (NYSE:SQ) new name is a sign as clear as any other on its sentiments towards blockchain. The company has invested in several Bitcoin (BTC-USD) initiatives, underpinned by blockchain technology, across its ecosystem. Cash App, Block’s core payment platform, utilizes blockchain to power its crypto transactions. The platform has 57 million monthly active users and accounts for 60% of Block’s profits.
Some of the company’s noteworthy Bitcoin initiatives include Bitkey, a self-custodian Bitcoin wallet that will connect Cash App to Coinbase to enable crypto transactions on the app. To further its innovation in the space, Block launched TBD– a developer platform to create decentralized apps on the blockchain. The company also plans to reinvest 10% of its BTC profits back into the company.
Block’s successful initiatives in blockchain and Bitcoin are underscored by its impressive financials. Revenue in Q1 was up 19% YOY and it expects full-year profit to grow 17% from the prior year.
As blockchain technology gains more mainstream traction, SQ is undoubtedly one of the best blockchain stocks to buy for long-term gains.
On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
