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Blockchain is a new and disruptive technology, leading many investors to assume the best blockchain stocks to buy in 2018 are recently formed companies.
Some of the best companies to buy leading the blockchain revolution are well-established firms.
And after we provide a little more detail on this new tech and why it's expected to be a $2.3 billion market by 2021, we'll show you the two best blockchain stocks to buy...
Why Blockchain Could Be a $2.3 Billion Market
How a blockchain works is complicated, but an easy explanation for what it does is that it simply acts as a digital ledger that keeps track of transactions and other information securely.
Software giant Oracle Corp. (NYSE: ORCL) believes this new tech can be used in six market sectors.
- Banking and Finance: This sector can use blockchain to verify its customers in knowing your customer (KYC) applications, clearing and settlement, loan origination, and payments, both domestic and cross-border.
- Manufacturing: This sector can utilize blockchain in design IP protection, tracking of product history, and recalls.
- Supply Chain: Supply chain businesses can use blockchain for financing, tracking, and tracing point of origin, ownership transfer, and monitoring of compliance.
- Healthcare and Pharmaceuticals: The opportunities in this sector include serialized tracking/tracing of drugs, clinical trial management, digital regulatory submission, and patient health records privacy and sharing.
- Utilities: This sector will likely use blockchain for management of assets, renewable energy and emission allowances certification, and the metering and billing of power consumption.
- Retail and Commerce: Blockchain can augment transparency in product history, aid to cut down on counterfeiting products, modernize supply chain management, and help with warranty adjudication.
It will take time for businesses to fully implement blockchain into how they do business, but some companies are already testing the tech...
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Ahead of even more companies testing the tech and the prices of blockchain stocks climbing, we had to share two of the best companies to own for long-term gains in the future $2.3 billion market....
Best Blockchain Stock to Buy, No. 2: IBM Corp.
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IBM Corp. (NYSE: IBM) is not often mentioned among other tech titans.
But IBM is starting to lead the pack in blockchain tech...
Over the last year, it has quadrupled its number of blockchain employees from 400 to 1,600. It has more than 400 blockchain clients, including A.P. Moeller-Maersk AS (OTCMKTS: AMKBY), Wal-Mart Stores Inc. (NYSE: WMT), DowDuPont Inc. (NYSE: DWDP), and Visa Inc. (NYSE: V).
A 2017 Juniper Research survey of 400 executives, managers, and IT leaders ranked IBM as the top blockchain tech leader.
Only Bank of America Corp. (NYSE: BAC) has more blockchain patents.
Over the next two years, IBM's blockchain projects should be adding between $10 billion to $18 billion to the top line.
This could push the IBM stock price back up to $200 and beyond by 2021. Currently trading at $142.53 per share, that could be a gain of 40.32% in three years.
On top of that, IBM also pays a dividend of $6.28 a share (4.32% yield).
And this next blockchain stock to buy on our list could provide even larger gains...
Best Blockchain Stock to Buy, No. 1: JD.com
However, the lack of attention to JD.com makes it a better stock to buy.
Last year, JD partnered with International Business Machines Corp. (NYSE: IBM) and Wal-Mart to form the Blockchain Food Safety Alliance, a blockchain project aimed at tracking food as it moves through the supply chain.
Being able to vouch for food sourcing will help JD attract business as it continues to expand.
And because of JD's early adoption of blockchain, analysts are bullish on the JD stock price...
Over the next 12 months, DBS Vickers Securities believes it will climb to $61 per share. From today's (May 29) opening price of $36.70, that's a potential profit of 66.21%.
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