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In this article, we will take a look at the 11 best blockchain stocks to buy. You can skip our detailed analysis of these companies, and go directly to the 5 Best Blockchain Stocks to Buy.
It is no surprise that the blockchain sector has garnered strong optimistic future projections from research firms. For instance, PricewaterhouseCoopers, which is one of the biggest accounting firms in the world, believes that blockchain technology can contribute $1.76 trillion to the global economy by 2030. Some of the areas that the firm’s research division believes will benefit from adopting blockchain technologies include contracts and dispute resolution, financial services, supply chain management across a diverse array of industries such as fashion and mining and other areas such as credential and identity verification.
Research firm Fortune Business Insights estimates a compound annual growth rate (CAGR) of 56.1% for the blockchain sector by 2027, anticipating that the market will be worth $69.04 by the year.
Similarly, Markets And Markets believes that the blockchain sector will have a CAGR of 67.3% from 2020 to 2025, a figure that is even more optimistic than that reported by Fortune Business Insights. The research firm goes on to state that by the end of 2025, the market with the help of the CAGR reported above will have grown to $39.7 billion from an estimated size of $3 billion from the end of 2020.
Finally, Mordor Intelligence, who analyzes the Blockchain as a Service segment of the market, which is one that caters mostly to enterprises, believes that by the end of 2026, this segment will have grown by a CAGR of 15.2%.
In a highly growing sector that consists of both public and privately listed firms, it is important to know which companies are the right pick for investment. Therefore, we use data that involves looking at the total number of hedge fund investors that have bought equity in a company and listing down the firms with the largest number of players.
Why should we pay attention to stock picks by hedge funds? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
So, without further ado, let’s take a look at the 11 best blockchain stocks to buy.
Best Blockchain Stocks to Buy
11. Canaan Inc. (NASDAQ:CAN)
Number of Hedge Fund Holders: 11
Canaan Inc. (NASDAQ:CAN) is a Chinese company that sits at the heart of the Chinese Bitcoin boom as it is responsible for manufacturing the hardware which is used to run the blockchain based cryptocurrency’s software. Despite the fact that China has now fully banned Bitcoin, Canaan Inc. (NASDAQ:CAN) will see future demand for its products as the miners are expected to simply move to other companies for setting up their operations.
Out of the 873 hedge funds polled by Insider Monkey by the end of the second quarter of this year 11 had holdings in Canaan Inc. (NASDAQ:CAN).
10. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 16
MicroStrategy Incorporated (NASDAQ: MSTR) ‘s Bitcoin portfolio is also one of the largest out there, as the company owned close to $3 billion of the cryptocurrency by the end of June this year.
Investment firm Alger had shining words for MicroStrategy Incorporated (NASDAQ: MSTR) in a recent investor letter:
“Shares of MicroStrategy outperformed in the first quarter due to the appreciation of the company’s bitcoin asset, as the price of bitcoin relative to the U.S. dollar rose materially in the quarter. This bitcoin appreciation was driven by concerns about U.S. dollar inflation as well as other public companies deciding to acquire bitcoin to diversify reserve assets. MicroStrategy is establishing itself as a thought leader in the bitcoin space, and the company hosted an event at its February user conference to help other organizations understand the benefits of bitcoin as a reserve asset. MicroStrategy’s core software business is also benefitting from its status as a leader in the bitcoin space, with the increased public attention aiding MicroStrategy’s recruitment and marketing efforts as the software business continues to transition to a cloud-based subscription model.”
Of the 873 hedge funds polled by Insider Monkey, 16 had a stake in MicroStrategy Incorporated (NASDAQ: MSTR) by the end of the second half of the year.
9. Riot Blockchain, Inc. (NASDAQ:RIOT)
Number of Hedge Fund Holders: 17
Riot Blockchain, Inc. (NASDAQ:RIOT) is another company like Marathon Digital Holdings, Inc. (NASDAQ:MARA) that focuses on mining Bitcoin on a large scale. Riot Blockchain, Inc. (NASDAQ:RIOT) has been massively popular on the stock market as well, especially due to the strong surge in Bitcoin prices earlier this year.
The recent crackdown in China on Bitcoin miners has also injected Riot Blockchain, Inc. (NASDAQ:RIOT) with fresh optimism. According to B. Riley analyst Lucas Pipes, the company is heavily undervalued, with the analyst setting a price target of $82.
B. Riley’s sentiment for Riot Blockchain, Inc. (NASDAQ:RIOT) is also mirrored by hedge funds. The number of hedge fund holdings in the company grew to 17 out of the 873 polled by Insider Monkey by the end of the second quarter of this year, as compared to 12 out of 866 polled at the end of the first quarter.
8. Marathon Digital Holdings, Inc. (NASDAQ:MARA)
Number of Hedge Fund Holders: 19
Marathon Digital Holdings, Inc. (NASDAQ:MARA) emerged in the market in the aftermath of the boom in cryptocurrencies and it is also a publicly traded company. As of September 28th, 2021, Marathon Digital Holdings, Inc. (NASDAQ: MARA) had a market capitalization of $3.3 billion and, more importantly, the company has also seen growing interest from hedge funds, who have flocked to invest in it this year.
Marathon Digital Holdings, Inc. (NASDAQ:MARA) runs cryptocurrency mining facilities capable of consuming megawatts of electrical power and it reported $38 million in revenue during the first half of this year.
Hedge fund interest in Marathon Digital Holdings, Inc. (NASDAQ:MARA) is evident by the fact that out of the 866 hedge funds polled by Insider Monkey during the first quarter of this year, 10 had holdings in the company. However, by the end of the second quarter, the number of hedge funds who had invested in Marathon Digital Holdings, Inc. (NASDAQ:MARA) had grown to 19 out of the 873 polled by Insider Monkey.
7. VMware, Inc. (NYSE:VMW)
Number of Hedge Fund Holders: 28
VMware, Inc. (NYSE:VMW) offers its enterprise customers the VMware Blockchain platform which is primarily focused on providing the companies with a secure platform for their daily transactions and other record keeping needs.
VMware, Inc. (NYSE:VMW)’s biggest hedge fund investor is the Two Sigma Advisors group, which owns roughly $200 million worth of the company’s equity.
As a testament to the popularity of VMware, Inc. (NYSE:VMW), at the end of the first quarter of this year, 25 of the 866 hedge funds surveyed by Insider Monkey held positions in the company, a figure that grew to 28 out of 873 polled at the end of the second quarter.
6. Silvergate Capital Corporation (NYSE:SI)
Number of Hedge Fund Holders: 31
Silvergate Capital Corporation (NYSE:SI) is one of the companies that sits at the heart of the modern day transactions that take place through Bitcoin. Since the value of Bitcoin is measured primarily in terms of the United States Dollar, Silvergate Capital Corporation (NYSE:SI)’s bank allows its customers to convert the USD into Bitcoin and vice versa. Silvergate Capital Corporation (NYSE:SI) has a presence all over the world with several customers.
Out of the 873 hedge funds polled by Insider Monkey by the end of the first half of this year, 31 held a stake in Silvergate Capital Corporation (NYSE:SI), also marking a slight increase in the second quarter from the first.
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Disclosure: None. 11 Best Blockchain Stocks to Buy is originally published on Insider Monkey.