Investing in the blockchain and cryptocurrency realm presents a spectrum of opportunities, each with its unique risk-reward dynamics. While directly investing in cryptocurrencies like Bitcoin (BTC-USD) exposes investors to the inherent volatility of these digital assets, exploring blockchain stocks offers a distinct approach that could potentially amplify returns while introducing a different set of considerations. Investing in undervalued blockchain stocks can be viewed as a form of synthetic leverage, providing the potential to amplify both gains and losses for investors.
This approach harnesses the underlying growth and momentum of the blockchain and cryptocurrency industries while allowing investors to diversify their exposure across multiple companies and business models.
So with the market experiencing a huge amount of volatility post the Bitcoin halving event, here are three of the most undervalued blockchain stocks that investors should keep on their radars for the rest of the year.
Coinbase Global (NASDAQ:COIN) is a leading cryptocurrency exchange platform that benefits directly from the growth in blockchain technology. COIN is my number one growth stock for this year, which makes it one of those undervalued blockchain stocks for investors to consider.
The bear case is that the volatility of the cryptocurrency market, which significantly impacts COIN’s performance, continues to pose a risk. Additionally, analysts have expressed concerns about the potential minimal revenue impact from the Bitcoin spot ETFs, which COIN is a key custodian of.
My view though is that the rapid ups and downs of the market will keep traders glued to their screens, as this is what simultaneously creates and destroys fortunes. More time spent on the Coinbase app and platform naturally leads to more trading fees and related purchases.COIN also aims to enhance its platform by integrating more blockchain and crypto technologies, focusing on areas like modular blockchains and layer-2 scaling solutions.
Mastercard (NYSE:MA) has integrated blockchain technology into its payment processing solutions.
I like MA because it gives investors exposure to a blue-chip company that has crypto and blockchain tech as a growth tailwind instead of being totally dependent on it.
Mastercard is testing the first blockchain-powered payment card in collaboration with MetaMask, which represents a significant stride towards integrating cryptocurrency with conventional payment systems. This card will allow users to make everyday purchases using their cryptocurrency at any location where traditional cards are accepted.
Mastercard also launched a new track within its global Engage partner network. This expansion is designed to accelerate the development and deployment of Web3 and blockchain-based products. The Engage network helps connect various stakeholders in the blockchain space.
MA is slightly overlooked in favor of Visa (NYSE:V). However, I feel that its blockchain tech is what sets it apart, and also makes it one of those undervalued blockchain stocks to buy.
International Business Machines (NYSE:IBM) is focusing on cloud-based solutions incorporating blockchain technologies.
I’ve given my opinion on IBM before and it’s worth restating: IBM can fulfill the role of a low-volatility tech stock in a conservative investors’ portfolio. Its stability is also complemented by its status as a Dividend Aristocrat and the quality of its revenue coming from large, enterprise clients.
I think that IBM can be seen as undervalued if one has that specific need in mind. It may also be undervalued thanks to its efforts in blockchain.
In 2024, IBM is collaborating with Casper Labs to develop blockchain-powered solutions specifically designed to improve the transparency and auditability of generative AI systems. This partnership aims to address the challenges of monitoring and managing AI systems by using blockchain to track and verify changes in AI models and data across different organizations.
IBM is also working on traceability solutions for supply chain management and secure, scalable platforms for digital transactions. These solutions are built on Hyperledger Fabric, an open-source blockchain framework.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.
Article printed from InvestorPlace Media, https://investorplace.com/2024/05/the-3-most-undervalued-blockchain-stocks-to-buy-in-may-2024/.
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