In this piece, we will take a look at the 11 most promising blockchain stocks according to analysts. If you want to skip our overview of the blockchain industry, its different use cases, and the latest news, then you can take a look at the 5 Most Promising Blockchain Stocks According to Analysts.
The growth in computing power coupled with the migration of both regular people and corporations to the virtual and digital realm has created industries of its own. For instance, enterprise resource planning (ERP) spearheaded by firms such as Oracle Corporation (NYSE:ORCL) has enabled companies to streamline their production processes, supply chain management, inventory management, and other operations. Similarly, services offered by firms like Intuit Inc. (NASDAQ:INTU) enable small and large businesses to manage their finances and ensure accuracy and security.
Another industry that has spawned due to the growth in global computing power is the blockchain industry. A blockchain, for those out of the loop, is a collection of computers linked over a network. These computers act as a repository of records, and each time a record is updated, the change is reflected across all computers. This provides network security, as even if one or several nodes are out of order, the data is not lost. Blockchains are often thought of synonymously with Bitcoin, which is unsurprising. Blockchains surfaced along with Bitcoin, as they are a store of records for the work a miner has done to earn a Bitcoin.
With time, non cryptocurrency use cases for blockchains have also started to gain popularity. This lends the industry a sizeable value, especially when it comes to improving business processes to increase economic productivity. For instance, according to data from the consulting firm PwC, blockchains carry the potential to improve economic productivity by a cool $1.76 trillion by 2030. According to PwC's research, there are five key industries that stand to benefit the most from the widespread acceptance and application of blockchains. These are supply chain management, financial services, identity management, contracts and dispute resolution, and customer engagement. Within these, supply chain management alone can yield as much as $962 billion in benefits, to account for more than half of the productivity gains. This is because, within supply chains, there is an important area called track and trace. This involves tracking the product from the source of its raw materials to the consumer's hand and then tracing these steps backward. As a result, a distributed ledger proves to be invaluable as it enables firms to store each stage of their product's journey with little error.
Shifting gears to focus on the current trends in the blockchain industry, 2023 is a markedly different environment for the sector. 2022 was a shocking year for both the Bitcoin bulls and the blockchain industry as investors were in no mood for either risky and high growth industries or speculative investment vehicles such as Bitcoin. Now, with the Federal Reserve's interest rate hiking cycle expected to end soon, the climate and investor mood is shifting. As an example, consider blockchain-based lending. A subcomponent of the finance industry, blockchain based lending sees debtors store their profile on a blockchain to enable creditors to easily evaluate their applications and hopefully improve them.
So, how is this climate shifting? Well, according to data from RWA.xyz, active tokenized credit loans currently sit at $582 million marking a 128% annual growth. The APR for these loans sits at 9.63%, with the data showing that perhaps a high interest rate environment is making borrowers seek alternative sources for loans. Sector wise, consumer and auto loans account for 66% of the total loan pie.
The changed market climate in 2023, which has seen Bitcoin gain 147% year to date, has also brought blockchain on the radar of the investment bank The Goldman Sachs Group, Inc. (NYSE:GS). In an interview with Reuters, the bank's global head of digital assets, Mathew McDermott, shared that the demand for digital financial assets based on the blockchain will significantly rise in the future. While typically these assets are cryptocurrencies, according to McDermott, there is a sizeable demand for other digital assets such as bonds that trade on the blockchain.
This talk comes as the tail end of 2023 is seeing significant interest among investors for a Bitcoin exchange traded fund (ETF) that enables stock market participants to trade in the cryptocurrency. Some analysts are quite optimistic about this ETF, and to learn more, you can read 10 Best Bitcoin Stocks To Invest In.
With these details in mind, let's take a look at all the blockchain stocks that have potential according to analysts. Some notable names are Cipher Mining Inc. (NASDAQ:CIFR), Applied Digital Corporation (NASDAQ:APLD), and Canaan Inc. (NASDAQ:CAN).
11 Most Promising Blockchain Stocks According to Analysts
Velas CEO and Founder Alex Alexandrov. Solving the public blockchain trilemma. Image source: Velas Official YouTube.
Our Methodology
To make our list of the most promising blockchain stocks according to analysts, we ranked the constituents of the Global X Blockchain ETF by the percentage average share price upside. Out of these, the stocks with the highest upside were chosen.
Most Promising Blockchain Stocks According to Analysts
CleanSpark, Inc. (NASDAQ:CLSK) is an American Bitcoin mining company headquartered in Henderson, Nevada. When compared to several other blockchain and Bitcoin stocks on our list, it has held the financial fort as of late by having beaten analyst EPS estimates in three out of its four latest quarters.
During Q3 2023, 11 out of the 910 hedge funds surveyed by Insider Monkey had invested in CleanSpark, Inc. (NASDAQ:CLSK). Jim Simons' Renaissance Technologies was the biggest shareholder through its $7.3 million stake.
Just like Cipher Mining Inc. (NASDAQ:CIFR), Applied Digital Corporation (NASDAQ:APLD), and Canaan Inc. (NASDAQ:CAN), is a promising blockchain stock through its analyst estimates.
Bitfarms Ltd. (NASDAQ:BITF) is a Canadian company, headquartered in Toronto, Ontario. The firm mines cryptocurrencies and it operates server farms that deal with blockchain transactions. It capitalized on the shifting sentiment around cryptocurrency in November 2023 when it successfully completed a private equity placement to raise capital to expand its operations.
By the end of this year's third quarter, five out of the 910 hedge funds part of Insider Monkey's database had held a stake in Bitfarms Ltd. (NASDAQ:BITF). Israel Englander's Millennium Management was the firm's largest shareholder as it owned $2 million worth of shares.
Riot Platforms, Inc. (NASDAQ:RIOT) is an American Bitcoin mining company headquartered in Castle Rock, Colorado. It is one of the most highly rated stocks on our list, since while the firm has missed analyst estimates in three out of its four latest quarters, the shares are rated Strong Buy on average. Analysts have set an average share price target of $17.79.
During 2023's September quarter, 17 out of the 910 hedge funds covered by Insider Monkey's research were the firm's investors. Riot Platforms, Inc. (NASDAQ:RIOT)'s biggest investor among these was Israel Englander's Millennium Management due to its $18.7 million stake.
NVIDIA Corporation (NASDAQ:NVDA) is a semiconductor company that designs and sells graphics processing units. Its products are at the heart of blockchain since they power up systems that operate the technology. The firm's shares have been on a tear this year by having posted 241% in year to date gains.
As of this year's September quarter, out of the 910 hedge funds profiled by Insider Monkey, 180 had invested in NVIDIA Corporation (NASDAQ:NVDA). Rajiv Jain's GQG Partners was the firm's largest hedge fund investor courtesy of its $6.1 billion investment.
HIVE Digital Technologies Ltd. (NASDAQ:HIVE) is a Canadian cryptocurrency miner and data center infrastructure provider. The firm expanded its efforts to target the growing A.I. industry in December 2023 through buying high powered GPUs.
Insider Monkey dug through 910 hedge funds for their third quarter of 2023 shareholdings and found that 180 were HIVE Digital Technologies Ltd. (NASDAQ:HIVE)'s investors.
Bit Digital, Inc. (NASDAQ:BTBT) is an American company headquartered in New York City. The firm enables cryptocurrency holders to earn a profit in a process called staking and it also mines cryptocurrencies. Capitalizing on the surge in Bitcoin prices this year, Bit Digital, Inc. (NASDAQ:BTBT) announced in December that its November 2023 Bitcoin production marked a 24% sequential growth.
For their shareholdings during this year's September quarter, four out of the 910 hedge funds part of Insider Monkey's database had bought Bit Digital, Inc. (NASDAQ:BTBT)'s shares. The firm's biggest shareholder among these is John Overdeck and David Siegel's Two Sigma Advisors since it owns 68,300 shares that are worth $146,162.
Cipher Mining Inc. (NASDAQ:CIFR), Bit Digital, Inc. (NASDAQ:BTBT), Applied Digital Corporation (NASDAQ:APLD), and Canaan Inc. (NASDAQ:CAN) are some promising blockchain stocks according to analysts.
