Investor's Guide to Blockchain Penny Stocks
Blockchain is the technology that underlies Bitcoin and other crypto currencies. But there’s also a lot of new interest in blockchain as an application for many other industries. Especially financial, luxury good, and most industries where authentication is extremely important.
That’s because blockchain allows multiple parties to collaborate without having to trust each other. With blockchain, the trust is baked into the technology.The underlying structure allows for a tremendous amount of transparency, authentication, and auditing of nearly any process or system. And because blockchain decentralizes the ledger or information involved in transactions, many companies are starting to look at how to implement this new technology within their businesses.
And many other companies are being formed as startups around this blockchain technology.
That means there’s lots of opportunities for investors to get in early on the new technology that has the potential (but no guarantee) to change the world in a similar way to what the Internet has done.
What to Look for When Betting on Blockchain
There are two primary ways to invest in blocking companies.
First, you can get into the crypto currency craze. This is where you buy the crypto currency itself. The most famous one is Bitcoin, but there are many others as well. Crypto currencies overall have skyrocketed in value in early 2017 through early 2018.
But that doesn’t mean they are a great investment for everyone.
Right now, these markets are highly speculative. Crypto currencies have no intrinsic value, and if you’re going to invest in them you need to be right about these types of currencies someday becoming “real currencies” that are used for actual broad exchange of goods and services. This is a pretty big bet at the moment. No-one really knows what the crypto currencies are actually going to do, although some online stores do accept them for payment.
The other way to invest in blockchain technology is to identify and invest in the companies that are using the technology for other applications. Currently, there’s a trend in companies changing their name to XYZ blockchain or announcing big, flashy investments in blockchain technology solely in order to make the value of the shares go up.
Because of this, it’s important to look at the fundamentals of any company before investing.
While this is not one of the blockchain penny stocks (I’ll show you some of those in the moment) one of the more interesting companies that is investing in blockchain right now is the behemoth IBM. IBM is working with European banks to build a platform based in blockchain for trade finance, and they are also partnering with food companies to use blockchain to track the global food supply chain.
IBM is an interesting choice for investing in blockchain, because they have a very diversified business and so if the blockchain technology doesn’t live up to its hype, there is a base business there to fall back on with this particular investment.
Interesting Blockchain Penny Stocks
Penny stocks are always highly speculative, and penny stocks based on technologies that aren’t super proven are even more speculative. It’s important that you do your homework when buying any stock, but this is especially true with blockchain penny stocks.
Here are several companies to watch:
360 Blockchain (CSE: CODE)
This company used to be known as 360 Capital Financial. It has recently announced a joint venture with NOS Blockchain and is focused on mining the two crypto currencies Zcash and Ethereum, as well as investing and developing blockchain technologies in the United States.
BLOCK Tecnologies (CSE: BLK)
This company is focused on developing new blockchain based technologies for niche industries. It also has an internal project called Greenstream, which is being developed to manage the supply chain for the legal Canadian cannabis industry.
This is especially interesting application for blockchain technology, because it should allow customers, merchants and government agencies to track, transact, share, access and most importantly authenticate supply and production within this industry.
Atlas Cloud Enterprises (CSE: AKE)
This is a Vancouver, BC based company and is primarily a crypto currency mining company. It has a strong investment in the type of machines are used in crypto currency mining and owns its own facility.
Final Thoughts on Blockchain Penny Stocks
Blockchain penny stocks are interesting thing to bet on when investing. Many people think that the blockchain technology is the real value of crypto currencies, so if you invest in companies that are utilizing this technology for real industry and that bet pays off, just maybe it will be like investing in Google at the very beginning. Only time will tell.