What a difference six months can make. Blockchain stocks have rebounded big time this year, along with the entire cryptocurrency sector. With the price of Bitcoin (BTC-USD), the biggest crypto by market capitalization, up more than 80% year to date, the entire ecosystem for digital assets has exploded. None more so than the stocks of companies focused on the blockchain technology that underpins cryptocurrencies or the shares of companies that mine for BTC, Ethereum (ETH-USD), and other digital coins and tokens.
While the gains in companies such as Meta Platforms (NASDAQ:META) have gotten all the attention, the reality is that the stocks of many crypto miners and blockchain companies have outpaced the traditional tech sector and are among the best-performing securities so far in 2023. With further gains anticipated, we look at three blockchain stocks to catapult you into the millionaires’ club.
Marathon Digital (MARA)
Shares of Marathon Digital (NASDAQ:MARA) have been on fire this year. Since January, MARA stock has gained 360%. The rise has been fueled almost entirely by the rebound in cryptocurrency prices and expectations of increased demand for Bitcoin, Ethereum and other digital assets moving forward. And while the run in Marathon Digital’s stock year-to-date has been spectacular, the share price is still below its 52-week high and very affordable to purchase at about $15 a share.
The cryptocurrency mining company’s stock recently crossed a key threshold, and some analysts are forecasting another 40% gain in MARA stock. With Bitcoin holding above $30,000, Marathon Digital’s share price is expected, at a minimum, to remain at current levels. But should Bitcoin’s price move higher, as many crypto observers anticipate, then Marathon Digital’s shares could also leap in the coming weeks and months.
Riot Platforms (RIOT)
Equally impressive this year has been the performance of fellow crypto miner Riot Platforms (NASDAQ:RIOT). Since the year’s start, RIOT stock has also increased 360%, matching the gains in MARA stock. Riot Platforms’ share price is now up 184% over the last 12 months and up 232% through five years. As with its rival Marathon Digital, Riot Platforms is gaining ground as demand for Bitcoin mining explodes and the broader crypto sector recovers from the steep downturn experienced in 2022.
Previously known as Riot Blockchain, the crypto miner’s share price recently got a boost from news that Bitcoin’s price had hit a 15-month high and that the U.S. labor market is holding up stronger than expected, prompting fears of further interest rate hikes by the U.S. Federal Reserve. While bad for stocks, further rate hikes would push investors into alternative investments such as cryptocurrencies, further strengthening demand for the digital coins Riot mines. In June, Riot Platforms announced it had purchased 33,280 new crypto mining rigs to bolster its operations.
Global X Blockchain ETF (BKCH)
Investors wanting exposure to the entire blockchain ecosystem should consider taking a position in the Global X Blockchain Exchange-Traded Fund (NASDAQ:BKCH). Providing broad exposure to publicly listed blockchain companies, including MARA and RIOT stocks, the Global X Blockchain ETF is up 174% so far in 2023. That’s a strong return, with more gains expected in this year’s second half as the entire crypto sector continues gathering steam.
Both Marathon Digital and Riot Platforms are among the top five Global X Blockchain ETF holdings. Rounding out the other top positions in the fund are Hut 8 (NASDAQ:HUT), Coinbase (NASDAQ:COIN) and Applied Digital Corp. (NASDAQ:APLD). The diversity of holdings in the ETF provides investors with a greater margin of safety than one gets owning individual stocks.
Additionally, the ETF has an expense ratio of 0.50%, which is reasonable, and it recently paid an annual dividend of 19 cents a share. Most individual blockchain stocks pay no dividends.
On the date of publication, Joel Baglole did not hold (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.
