A year ago, cryptocurrencies were all the rage.
Bitcoin hit an all-time high of $19,783 on Dec. 17, 2017. Waiters, cab drivers, barbers and even high school students were jumping on the cryptocurrency bandwagon.
That’s a far, far cry from the $6,300 range where Bitcoin is trading today. Through the first 10 months of 2018, the cryptocurrency market saw its total market capitalization fall by 75%, from $800 billion all the way down to $200 billion. Bitcoin and Ethereum, for example, have lost roughly 70% of their value.
Not only has the price of Bitcoin dropped, but so has investors’ interest in digital coins. However, the technology that underlies these cryptocurrencies is gaining more momentum — and it’s even starting to capture more attention than the cryptos themselves.
At least, when it comes to what investors are searching for on the internet …
The (Google) Trend is
The Google Trend system assigns search terms a ranking of 0 to 100. (100 is the highest.) The search rates for Bitcoin and Ethereum have dropped from 100 to 8 and 9, respectively. That’s about a 92% drop … and an 18-month low. Wow!
However, the crypto-related search of “blockchain” is getting more popular by the month. According to Google, the number of searches for “blockchain” have now surpassed “crypto” in popularity.
The interest in blockchain — the technology that underlies cryptocurrencies — is not being fueled by crypto investors. Rather, this rise is thanks to tech-savvy businesses that are rapidly incorporating blockchain into their long-term business plans.
Banks, financial institutions and technology firms have allocated billions of dollars per year to develop enterprise-grade blockchain networks. According to ABI Research, American companies — including tech giants like IBM, Microsoft, Amazon, SAP, Hewlett-Packard and Oracle — will spend more than $10.6 billion on blockchain initiatives by 2023.
Related post: Companies and countries flock to blockchain. But it’s not about cryptocurrencies.
Bank of America Merrill Lynch research analyst Kash Rangan predicted that a blockchain facilitator — like Amazon, Microsoft or Oracle — would reap a financial windfall with their blockchain services.
What’s the big deal
Walmart launched a blockchain pilot program and made an important discovery. It found that the amount of time it takes for the company to trace a food item from store to farm was reduced from seven days … to just 2.2 seconds.
Sounds like blockchain is an investment that can pay off pretty nicely, doesn’t it? According to Michela Menting of ABI Research:
“Successful pilots run by the likes of Walmart and Maersk in tracking and monitoring products on a global scale are emerging into commercialized platforms that will be market-ready in the next few months.”
The biggest mistake that crypto investors can make is easy to identify, because we are seeing it in the markets right now. That is, most fail to understand that investing in the stocks of blockchain leaders may be more profitable than only investing in cryptocurrencies.
I’m not suggesting that you throw in the towel on cryptocurrencies. Quite the opposite; I think that some of the cryptos with the most robust technology will deliver fantastic gains. (Here are four cryptos that recently scored a “Buy” grade from our Weiss Crypto Ratings team.)
However, I expect some of the blockchain superstars to deliver two, three, four or more times the profit than the average cryptocurrency. And you can buy each of these stocks in your regular trading or investing account.
It’s not a “one or the other” proposition. The best strategy is to own both: Cryptocurrencies and blockchain kingpins.