The recent surge in the benchmark cryptocurrency’s value has sparked a significant increase in interest in the entire space, particularly in what are known as “blockchain stocks.” These are companies that either mine cryptocurrencies or facilitate their acquisition, providing an alternative path to decentralized wealth.
But why would someone want to invest in blockchain stocks when they could just buy cryptocurrencies directly? As with anything in life, there are pros and cons to consider. While crypto-related companies can offer significant rewards, they also come with significant risks. Additionally, unexpected events can occur over the weekend, leaving investors unable to respond until the market opens again.
However, there are also advantages to investing in blockchain stocks. These companies avoid some of the administrative vulnerabilities that can cause problems for crypto investors, such as losing passwords or falling victim to cyber attacks. Publicly traded securities also offer certain protections that cryptos themselves do not.
With that in mind, here are some intriguing blockchain stocks to keep an eye on:
Marathon Digital (MARA)
Marathon Digital (NASDAQ:MARA) is one example of a blockchain stock that has experienced significant growth as a result of the recent surge in interest in the crypto market. However, there is a potential headwind to consider with this company – the upcoming halving event for the benchmark cryptocurrency, which will decrease the amount of tokens earned for verifying transactions in the blockchain.
Despite this, the increased enthusiasm and participation in the crypto market, including major institutional players and government agencies, bodes well for Marathon’s future. While it is a volatile investment, it remains an intriguing option for speculators. For those concerned about potential volatility, call options that expire around the time of the halving event (estimated to be April 19) may be a safer alternative.
Cipher Mining (CIFR)
Cipher Mining (NASDAQ:CIFR) is a newer addition to the world of blockchain stocks, having entered the market during the height of the 2021 crypto craze. However, when sentiment began to decline towards the end of the year, so did CIFR’s stock value. Despite this, the company remains an interesting option to consider, especially with the recent record-breaking performance of the benchmark crypto and the increasing awareness of the decentralized ecosystem.
While it’s important to keep in mind the potential risks associated with blockchain stocks, analysts are optimistic about Cipher’s future, with projected revenue increases for the next few years. The consensus view among analysts is a unanimous strong buy, with a potential upside of almost 68%.
Coinbase (COIN)
Coinbase (NASDAQ:COIN) is not a pure-play blockchain stock, but rather known primarily for its crypto exchange and wallet services. However, the company plays a critical role in the crypto market, providing a gateway for people to easily participate in the sector. This, combined with the intense enthusiasm for all things crypto, has resulted in significant gains for COIN stock since the start of the year.
Additionally, Coinbase’s well-known brand and accountability measures make it a more attractive option for investors in the often unpredictable world of crypto.
On the date of publication, Josh Enomoto 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.
