Tis the season for us to go out with family and friends, buy gifts, buy “cheap” items on sale for ourselves and rack up those rewards on our credit cards as our balances start to soar. But now it’s time for us to reset going into the new year and think about our goals for 2018. One of my goals that I will share with you to is gain exposure into cryptocurrencies. And in the next couple of weeks, I’ll continue to share what my other goals are.
I’m sure most of you have heard of Bitcoin, maybe even Ethereum or Ripple. The granddaddy of them all, Bitcoin, has been in and out of the news spotlight as it climbs in value to over $16000USD (or $20000 CDN). Now I am personally a very risk averse person and seeing the swings of each of the different flavours of cryptocurrencies worries me.
I prefer the hold (or HODL as the geeks would say) and grow approach, which in the case of almost all of the cryptocurrencies this year would have netted a sizable ROI. We might be thinking we’ve missed out on all those huge gains and yes we did for this year. But there’s always great ideas to invest in. And call me old fashioned but I like looking at the guts of an investment.
Which brings me to where I think the real value of cryptocurrency is:
Blockchain technology is the building block for Bitcoin and now has found use in several industries and will be the backbone of how business is done in the future. But, before I get too preachy, what is a blockchain? A definition from Wikipedia is “a continuously growing list of records, called blocks, which are linked and secured using cryptography” and if we look at cryptocurrency in particular: “a digitized, decentralized, public ledger of all cryptocurrency transactions.” Now, I’m not going to get into the inner workings of blockchains as Wikipedia, Investopedia and this awesome guide by BlockGeeks explain it in depth. But what I’m going to share is where I think the investment opportunities are for hold and growth for blockchains with cryptocurrency as our focus.
There a couple of areas we can address blockchains as cryptocurrency. The first I’m going to talk about is the finance industry. This industry was the first to widely see the value in blockchains and has began to adopt it into their operations. Companies such as Nasdaq and JP Morgan Chase have begun using blockchain internally to help with their operations. For instance, Nasdaq is using blockchain tech to facilitate private investing and is looking into rolling this into other areas to cut costs. JP Morgan Chase launched a payment network this year based on blockchain tech. The fact that big financial institutions are adopting this new technology is exciting and can’t be overlooked. As they are pioneers, I have invested in them as they are ahead of the curve.
The next area I have looked into is cryptocurrency blockchain backbone companies. These companies have and continue to be integral to the growth and meteoric rise of cryptocurrency. The big one for this area is Nvidia. Before just known as a video card company (like when I was high school playing computer games), Nvidia is a behemoth to be reckoned with. Not only is computer graphics a major segment for the company but they have evolved into other segments including AI, cloud computing and cryptocurrency mining. The complexity of mining cryptocurrency (see those explanation links above!) has meant that Nvidia positioned themselves perfectly as the solution by proving processing power through their GPUs. As more cryptocurrencies emerge and current currencies evolve and grow, the demand for Nvidia GPUs will only grow. As Nvidia has positioned themselves as the leader for mining and the fact that they are the leader in other segments, the growth prospects for Nvidia look to be strong.
Nasdaq, JP Morgan Chase and Nvidia are just a few companies that I have invested in. My goal for 2018 is to gain exposure into cryptocurrencies and with these 3 companies and several others I have. I don’t need to invest directly into Bitcoin, Ethereum, etc to reap their benefits. Yes, buying cryptocurrencies may give bigger returns, be the sexier choice but Blockchain technology is the foundation and investing in the foundation to me is smarter. As Blockchain evolves, spreads, disrupts, and becomes the standard, investing in those companies who are leaders, experts and early adopters will be the real stars.