Blockchain technology is heating up, with the entire cryptocurrency market is worth a combined $267 billion. And in May 2020, Bitcoin jumped 6%, causing a $13 billion surge in market value for the entire cryptocurrency market.
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Given this meteoric rise, it’s no surprise that investors are clamoring to figure out how to break into the Bitcoin marketplace. But there are many other cryptocurrencies (such as Ethereum and Ripple) and blockchain companies on the stock exchange where investors can funnel their money.
However, investing in a cryptocurrency is different than investing in a regular stock. When you invest in a company, you’re buying shares of that company and essentially own an extremely small percentage of it. When you invest in Bitcoin or Ethereum, you receive digital tokens that serve different purposes. With Bitcoin, you get decentralized currency that also happens to be partially anonymous. With Ethereum, you get a piece of the power that runs decentralized apps and smart contracts.
Trading cryptocurrencies occurs on dedicated exchanges. Larger exchanges like GDAX, Kraken, Bitfinex, and Gemini typically offer solid volume to trade cryptocurrencies through bank transfers or credit cards. Coinbase is also an option that is growing in popularity thanks to its ease of use and a built-in wallet.
Top Cryptocurrencies to Invest In
There are several paths one can take when deciding in which cryptocurrencies to invest, but a handful of these have risen to the top as the most popular options for investment:
Please note that due to constantly changing market cap, values at time of publication may be different than those reflected on our Markets Insider live dashboard.
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- Bitcoin: There’s a reason you’ve heard the name Bitcoin all over the financial news space. Bitcoin has a market cap of over 169 billion. Moreover, the original design of Bitcoin ensured that there would never be more than 21 million inexistence (and math indicates we’ll never actually reach that number). This means Bitcoin is not subject to inflation.
- Ethereum: Arguably the second-most well-known cryptocurrency, Ethereum has more than doubled its value this year. And investors are paying a 220% premium to buy Ether. Even with that growth, the price remains significantly less than Bitcoin, so it could be a better value play for investors who don’t have the resources to afford Bitcoin.
- Ripple XRP: Ripple is a protocol that permits near instantaneous transaction settlements and reduces transaction fees to mere cents. Ripple has a market cap over 7 billion and its circulating supply is more than 43 billion. Additionally, in January 2020 the startup added around 50 new partners around the world—reaching a total of 350.
- Bitcoin Cash: In August 2017, the Bitcoin blockchain spun off a more nimble iteration called Bitcoin Cash. It’s essentially identical to Bitcoin, but with the important distinction that it has more block size capacity. And if you owned Bitcoin before the split, then you received an equal amount of Bitcoin Cash. There are approximately 18 million units of each in existence, which makes Bitcoin Cash one of the most valuable cryptocurrencies in the world with a market cap of more than $4.37 billion.
- Tether: Launched in 2014, Tether was created to facilitate the use of fiat currencies digitally and is the first blockchain-enabled platform to facilitate the digital use of traditional currencies. Both its market cap and circulating supply are over 4 billion.
How to Invest in Blockchain Technology
Blockchain technology powers Bitcoin and other cryptocurrencies, but there are many ways to invest in blockchain tech without pouring your money into these digital currencies. The first is to look into blockchain startups (we’ll detail more in the next section).
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The second option is crowdfunding platforms, as blockchain startups in their infancy will often look into crowdfunding to get off the ground. A platform called BnkToTheFuture allows investors to place their money into several Bitcoin and blockchain startups.
Another possibility is to invest in the initial coin offerings, or ICOs, of new blockchain projects. Blockchain companies issue cryptocurrencies or other tokens through ICOs in order to raise capital. There is a bit more risk in this route, as this new form of crowdfunding is still rather unregulated, but the returns reported thus far have been stellar.
Top Blockchain Stocks & Companies to Invest In
The following six blockchain stocks and companies have become popular investment choices:
- IBM: IBM offers a cloud-based, software-as-a-service blockchain platform. In 2019 IBM announced a blockchain-
FILE PHOTO: Man stands near an IBM logo at the Mobile World Congress in Barcelona
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based supply chain verification network, aptly named “Trust Your Supplier” to help reduce the risk of fraud and errors. Market Cap: 107 billion
- NVIDIA: NVIDIA designs graphics processing units for the gaming and professional markets. In 2020 Nvidia acquired Cumulus in a bid to expand its range of private cloud services for enterprises. Market Cap: 235 Billion
- Global Gaming Technologies: In 2019 Global Blockchain Technologies changed its name to Global Banking Technologies, and in the last quarter of the year the company entered a licensing agreement with Virsix Games. Market Cap: 425,000
- Overstock.com: Overstock.com was the first U.S. retailer to accept bitcoin as a method of payment. The online retailer launched tZero, a blockchain-based trading service, that records the profits of its subsidiary, Medici Ventures. In 2018, Medici Ventures acquired a $2.5 million stake in GrainChain, an agricultural blockchain company. Market Cap: 1 Billion
- DigitalX: DigitalX developed a mobile product called AirPocket that assists with secure cross-border payments. DigitalX runs an unlisted fund of the top crypto assets, and in 2019 the company launched a Bitcoin fund that can be accessed through an unlisted fund structure at a low cost.
More to Learn
The financial potential of blockchain could be tremendous, and that’s why Business Insider Intelligence put together the Blockchain in Banking research report. The report explores blockchain successes and failures at major banks, and outlines actionable steps industry players can take to ensure the success of their own blockchain projects.
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