While it is hard to ignore the important role of blockchain in driving the cryptocurrency ecosystem and creating coins like Bitcoin (BTC-USD) as a whole, the industry has a vast array of use cases that can help drive innovation across the financial sector, cybersecurity, and introduce next-generation digital ownership to virtually every sector.
The blockchain technology market size is expected to grow at a rapid compound annual growth rate (CAGR) of 68% to reach a value of $69 billion by 2032.
This growth rate is important for the investment outlook of the sector. Short-term volatility has had a significant impact on the cryptocurrency landscape in recent weeks, with Bitcoin falling more than 14% in the first five days of August. However, blockchain stocks remain a solid investment option due to their long-term potential.
Given that we are already seeing evidence that blockchain is leading the way in the future of decentralized finance (DeFi), enabling innovative solutions such as smart contracts and peer-to-peer (P2P) lending, the growth of the technology is already delivering tangible benefits across the tech sector.
With cryptocurrency markets reeling at the start of the month, August could be a great time to buy some of the best blockchain stocks.
Coinbase (COIN)
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Due to its proximity to the cryptocurrency markets, the leading cryptocurrency exchange Coinbase (NASDAQ:COIN) has seen exceptional performance in 2024 thanks to the sustained growth of cryptocurrencies like Bitcoin.
Coinbase offers built-in finance that allows users to freely trade cryptocurrencies through its app around the world, helping to democratize the world of crypto for retail investors.
The stock finished the first half of 2024 up 28%, and despite recent volatility in the crypto market, COIN remains on track for a strong year of growth. This is after suffering from the negative growth that swept the crypto landscape in 2022 and early 2023.
Coinbase’s strong performance this year is backed by its impressive fundamentals. In its Q2 2024 earnings report, COIN posted net revenue that more than doubled to $1.4 billion, while net income climbed to $36 million, compared to a loss of $97 million in the same period last year.
Although cryptocurrency markets are weaker today, optimism remains strong that a bull market will propel cryptocurrencies higher in 2024 and 2025. If this happens, we will likely see COIN’s growth outpace that of S&P 500 comfortably.
Wall Street guru Cathie Wood wasted no time buying the dip in Coinbase stock following the cryptocurrency downturn, picking up 93,797 COIN worth $17.8 million on August 5. For investors who believe in the long-term potential of blockchain and cryptocurrency, Coinbase is an attractive stock to own at the August discount.
Nvidia (NVDA)
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At the current rate of growth, it is difficult to rule it out. Nvidia (NASDAQ:NVDA) of any innovative technology stock market value.
While the semiconductor giant isn’t best known for its involvement in the blockchain landscape, the stock is playing a pivotal role in the growth of the blockchain industry as a whole.
With a CAGR of 68% over the next 8 years, the level of processing power required to enable blockchain technology to realize its potential is likely to be provided by Nvidia, making the stock an attractive prospect for blockchain-focused investors.
In June, Nvidia briefly became the world’s most valuable stock, and its astonishing growth of approximately 745% between Q1 2023 and Q2 2024 underscores its invaluable role in the technological growth of a number of emerging industries.
There are plenty of signs that Nvidia is also delivering on its promises. That’s a major plus for the stock, given the speculative nature of the generative AI boom that has facilitated its growth in recent years.
Nvidia’s second-quarter results predict revenue growth of 107% year-over-year to $28 billion. The company’s status as a semiconductor market leader means technological innovations can only boost the stock’s prospects going forward.
Block (SQ)
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There is perhaps no more enthusiastic action toward blockchain on Wall Street than Block (NYSE:SQ).
Best known as a payments app, Block has a particular focus on cryptocurrencies and has an in-house team of Bitcoin developers working on Block’s open development platform for blockchain applications.
The stock has fallen 15% in the first half of 2024, making it a more attractive price for investors to buy in August ahead of what could be a bullish end to the year for Bitcoin and the broader cryptocurrency landscape.
While announcing second-quarter 2024 gross profit growth of 20% year-over-year to $2.23 billion, Block also announced an internal reorganization designed to drive further growth and accelerate the company’s time to market.
For a company that has identified both banking and Bitcoin as future growth drivers, CEO Jack Dorsey’s enthusiasm for blockchain technology could see Block’s restructuring focus more on emerging blockchain and cryptocurrency markets.
Block invested 10% of its gross profit from Bitcoin products into buying Bitcoin. The company is therefore poised to grow alongside the broader blockchain and cryptocurrency industry. This makes its weak performance in 2024 a significant buying opportunity for a stronger year-end.
As of the date of publication, Dmytro Spilka 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 author, subject to the InvestorPlace.com Publishing Guidelines.
As of the date of publication, the responsible publisher had not (directly or
(indirectly) all positions on the securities mentioned in this article.
