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Wall Street’s focus on blockchain stocks is likely to continue in the second half of 2024 as well. Blockchain, the technology behind cryptocurrencies like Bitcoin (BTC-USD) and Ethereum (ETH-USD), has applications that extend far beyond digital currencies. In fact, many publicly traded companies are integrating blockchain into their operations or offering related services.
Recent research suggests that the blockchain technology market is projected to grow from $7.4 billion in 2022 to $94 billion by 2027, at a compound annual growth rate (CAGR) of over 66%. Blockchain’s potential spans various sectors, from luxury goods authentication to combating illegal fishing and wildlife trafficking. Even the Vatican has ventured into blockchain, using non-fungible tokens (NFTs) to digitize and preserve art and historical documents. Therefore, today, we explore two top blockchain stocks and a blockchain exchange-traded fund (ETF) to add to your must-watch list in July.
CleanSpark (CLSK)
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The first name in our lineup of blockchain stocks is CleanSpark (NASDAQ:CLSK), a bitcoin mining company with a commitment to sustainability. Its data centers operate predominantly on low-carbon energy.
In the second quarter of fiscal year 2024, CleanSpark generated record revenues of $111.8 million, up 163% year-over-year (YOY). Net income soared to $126.7 million, translating to an EPS of 59 cents, a significant improvement from the previous year’s 23-cent loss. Ending the quarter with robust financial health, CleanSpark boasted $632.7 million in working capital and minimal debt of $12.8 million.
CleanSpark has adeptly expanded post-Bitcoin halving by acquiring competitors and enhancing its footprint in the mining sector. Recent acquisitions, including two locations in Wyoming and five in Georgia, have boosted its hashrate to over 20 exahashes per second (EH/s), aiming for 50 EH/s by 2025. Hashrate, which measures mining efficiency, directly impacts the chances of earning rewards. Meanwhile, CleanSpark’s recent announcement to acquire GRIID Infrastructure (NASDAQ:GRDI) further improves its market position, targeting 100 megawatts (MW) capacity in Tennessee by year-end and scaling to 400 MW by 2026.
CLSK stock has delivered a year-to-date (YTD) return of over 45%. Despite trading at a premium valuation of 9.2 times sales, analysts remain bullish, projecting a 65% upside with a 12-month median target of $26.50.
iShares Blockchain and Tech ETF (IBLC)
Source: Alongkorn Sanguansook/Shutterstock
Investing in blockchain stocks can mean potential long-term returns. As a result, a blockchain ETF may offer diversification, simplicity and exposure to innovative tech, making it an appealing choice.
Next in today’s list of blockchain stocks is the iShares Blockchain and Tech ETF (NYSEARCA:IBLC). Launched in April 2022, IBLC tracks the NYSE FactSet Global Blockchain Technologies Index, primarily investing in firms advancing blockchain and crypto technologies worldwide.
As net assets stand at over $23.5 million, it is still a small fund. IBLC allocates 77% to information technology and 22% to financials, with holdings in 35 stocks. As the ETF is market capitalization-weighted, the top 10 holdings account for over two-thirds of the fund. Leading names include Marathon Digital Holdings (NASDAQ:MARA), Cleanspark, Coinbase Global (NASDAQ:COIN), Hut 8 (NASDAQ:HUT), and Terawulf (NASDAQ:WULF). Geographically, the U.S. leads with nearly 82%, followed by Canada, Australia and China.
So far in 2024, IBLC has gained 15%, complemented by a 1.2% dividend yield. Shares currently trade at 22.4 times trailing earnings and 3.5 times book value. We should remind readers of the expense ratio of 0.47% if they are seeking exposure to blockchain stocks through this ETF.
Mastercard (MA)
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As we conclude our discussion on blockchain stocks, Mastercard (NYSE:MA) emerges as a global payments leader advancing in distributed ledger technology. The company has made the Forbes’ 2023 Blockchain 50 list, which showcases companies heavily investing in blockchain.
In May, Mastercard reported solid first quarter 2024 results. Net revenue reached $6.3 billion, up 11% YOY on a currency-neutral basis. Adjusted diluted EPS grew to $3.31, from $2.80 in the prior year quarter. Operating margin was 56.8% compared to 54.6% a year earlier.
Mastercard focuses on digital payments, particularly on contactless and tokenized transactions. The company aims to fully implement e-commerce tokenization in Europe by 2030, enhancing transaction safety and accessibility. Additionally, Mastercard has partnered with blockchain technology firms and established a Crypto Card program to launch crypto-funded payment cards.
Wall Street notes that Mastercard is also leveraging blockchain and artificial intelligence (AI) investments to innovate its processing capabilities. Notably, the company employs generative AI to detect fraud, achieving twice the speed in identifying compromised cards compared to previous methods.
Since January, MA stock has gained around 5% YTD. It shares are trading at 30.5 times forward earnings and 16.5 times sales. Finally, analysts have set a 12-month median price forecast of $514.07 for Mastercard stock, a potential 14% upside.
On the date of publication, Tezcan Gecgil did not have (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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Tezcan Gecgil, PhD, began contributing to InvestorPlace in 2018. She brings over 20 years of experience in the U.S. and U.K. and has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Publicly, she has contributed to investing.com and the U.K. website of The Motley Fool.
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