The blockchain market performed significantly well in 2023. The market capitalization of cryptocurrencies worldwide went up from a mark below US$800 billion to above US$1.6 trillion, more than doubling in size. For the global blockchain technology market, it was another year of spectacular growth.
Research suggests the blockchain technology market will grow from US$5.85 billion in 2021 to more than US$1.2 trillion in 2030. It represented a growth opportunity at a rate of nearly 83% CAGR. And 2023 was a successful year in that trajectory.
According to several industry analysts, 2023 was the year when the crypto market bounced back, with Bitcoin gaining nearly 160% since starting 2023 at US$16,600, Ether witnessing a growth of more than 90%, and the DeFi sector registering around 67% gains. NFT trade volumes also recorded a notable recovery and posted substantially big numbers during the end of 2023.
The success of a thriving market is reflected through its components and the success achieved by players operating within the market space. Today, we will look at three top-performing assets associated with blockchain in 2023 and three more that should see significant value appreciation in 2024.
Top Three Best Performing Blockchain Stocks in 2023
1. Microstrategy
MicroStrategy Inc. trades on the NASDAQ under the ticker MSTR. It is a business intelligence firm with significant exposure to Bitcoin. According to reports, MicroStrategy’s stock gained more than 350% in 2023, outperforming Bitcoin’s growth by a significant margin.
The company and its subsidiaries reportedly hold more than 189,000 BTC at a combined purchased price of nearly US$6 billion. Between November 30th and December 26th, 2023, the company and its subsidiaries purchased around 14,620 bitcoins at an average price of around US$42,110. It used a mix of long-term, low-interest debt, and share issuance to finance its crypto purchases.
The company also successfully managed to bring down its total liabilities by more than US$2.5 billion.
The high levels of exposure to Bitcoin are reflective of MicroStrategy’s co-founder and Executive Chairman’s belief in the asset. Those who are aware of Michael Saylor’s trust in Bitcoin say that he is more optimistic about Bitcoin’s safe and liquid nature compared to a fiat currency that is constantly debased and suffers from significant supply inflation.
As a provider of business intelligence services, Microstrategy has always embraced the latest technological innovations to stay ahead of its peers. Its most recent MicroStrategy ONE platform helps businesses dramatically lower the time from data to action by offering access to AI-powered workflows, unlimited data sources, and best-in-class cloud-native technologies.
Microstrategy’s Bitcoin services help compare Bitcoin using HyperIntelligence. The comparisons are available against risk-adjusted returns of currencies, indexes, metals, stocks, and bonds.
According to its latest available quarterly filings, MicroStrategy earned a revenue of more than US$129 million for the three months ended on September 30th, 2023. Gross profit for the same period was close to US$103 million. For the nine months that ended on September 30th, 2023, the company’s revenues were close to US$372 million, with gross profit crossing the mark of US$290 million.
2. Coinbase
Another blockchain-associated asset that did significantly well in 2023 was Coinbase. Reports published on the last business day of the previous year showed that the company’s stock had risen more than 400% in value in 2023. And analysts suggest a significant part of this rise was driven by the recovery in the crypto market.
According to equity analyst Michael Miller:
“Coinbase has positioned itself as the reliable on-ramp to the space for new and experienced cryptocurrency traders alike. The company’s reputation, regulatory compliance, and record as a custodian have allowed it to maintain transaction fees above many of its peers despite operating in a crowded field with hundreds of competing firms.”
Coinbase also benefits from its versatility, serving multiple duties as an exchange, asset custodian, and broker.
Started in 2012, Coinbase now serves customers globally through its 245,000 ecosystem partners in more than 100 countries. The latest available numbers suggest the company handles a trading volume close to US$76 billion quarterly. It safeguards assets worth US$114 billion. Its employee base comprises more than 3,400 worldwide.
In trade, Coinbase’s services cater to coins of all types, from old to new, from Bitcoin to Dogecoin. Its Visa Debit Card allows crypto rewards on weekly purchases of coffee and groceries. The Coinbase wallet, apart from helping to store crypto, also helps explore DeFi regimes, buy and sell NFTs, and more.
For the three and nine months ended September 30th, 2023, Coinbase’s total net revenue was $623.0 million and $2.0 billion, respectively, including $288.6 million and $990.4 million in transaction revenue. Subscription and services revenue was $334.4 million and $1.0 billion for the three and nine months ended September 30th, 2023.
3. Block
Another blockchain-associated asset whose stock did exceedingly well, going ahead of its well-known peer, like PayPal, was Block. Reports published on November 3rd, 2023, showed Block shares going up 17% to reach US$51.35 in premarket trading, far ahead of competitor PayPal’s growth of 0.4%. The earnings and guidance on Block surpassed analyst expectations.
In December 2023, Block, Inc. launched its self-custody Bitcoin wallet, Bitkey. It launched in more than 95 countries across six continents.
Block, through Bitkey, aims to solve the complexities that still exist around self-custody solutions. These solutions still rely on a complex set of devices and long passwords. The Bitkey solution comes with a mobile application, a hardware device, and a set of recovery tools in case the customer loses the phone, their hardware, or both. Bitkey has been built by Block’s Proto team.
According to Thomas Templeton, the leader of Block’s Proto team:
“The bitcoin decentralized payments network has the potential to create a more inclusive financial system for all, especially those who have traditionally been underserved.”
Templeton believes that with Bitkey, Block has been building:
“A safe and easy way for people all around the world with different levels of experiences with Bitcoin to take control of their finances on their terms.”
For the three months that ended on September 30th, 2023, Block, Inc. clocked a revenue of more than US$5.6 billion. The gross profit for the same period was close to US$1.9 billion. For the nine months that ended on September 30th, 2023, Block, Inc. registered a revenue of more than US$16 billion, with the gross profit nearing US$5.5 billion.
While companies like Microstrategy, Coinbase, and Block have been the leading stocks among blockchain-associated assets in 2023, some companies will leverage the sector’s growth in 2024. The following are three entities that exhibit maximum potential in this regard.
Top Three Blockchain Assets Primed to Skyrocket in 2024
1. Riot Platforms, Inc.
Riot Platforms is reportedly building the world’s leading Bitcoin-driven infrastructure platform. It owns and operates North America’s largest Bitcoin mining facility in terms of developed capacity. Its Rockdale facility has a total power capacity of 700 MW.
Believed to be the largest single Bitcoin mining facility, the center hosts a total of seven buildings, with the largest immersion-cooling infrastructure deployed in two of its buildings. The company expects its total self-mining hash rate capacity to reach 20.1 EH/s by mid-2024.
What further prepares Riot Platforms as a winner for 2024 is its new facility in Navarro County, Texas. The facility will finally become a 1 GW development. For now, the expansion has begun with an initial 400 megawatts (“MW”) of capacity on a 265-acre site, with immersion-cooled mining and hosting operations.
Riot Platforms has formed a strategic partnership with Priority Power Inc., which is an industry leader in Bitcoin mining energy services. Priority Power helps Riot with services relating to site development and management, utility interconnection, power purchase agreements, and power load flexibility.
For the three months that ended on September 30th, 2023, Riot earned a revenue of nearly US$52 million. For the same period last year, Riot’s revenue was a little more than US$46 million. And for the nine months that ended on September 30th, 2023, Riot’s revenue was close to US$202 million.
2. Marathon Digital Holdings
Another company that is set to do big on the blockchain mining front is Marathon Digital Holdings. Claimed to be one of the largest, most energy-efficient, and most technologically advanced Bitcoin mining companies, Marathon Digital is also one of the largest BTC holders among North American public companies.
The reasons why Marathon Digital should do well in 2024 include its use of vertically integrated technology, its diversified operations, and the capacity to leverage sustainable energy.
Marathon Digital covers every aspect of Bitcoin mining technology by either controlling or influencing it throughout the entire technology stack, from the pool down to the ASIC. The company operates its mining pool and has its custom firmware. It also keeps constantly investing in hardware and design infrastructure.
Marathon also holds a large amount of Bitcoin with a long-term view of the asset’s value. Its operations, however, are adequately diversified, with a presence in two countries and multiple states.
Depending on the situation at hand, the company also makes diversified strategic decisions, which include outsourcing to third-party hosting providers self-hosting or deploying its miners to carry out the job. Depending on feasibility, Marathon is well-equipped to deploy its BTC miners near sustainable sources of power, including wind, solar, hydro, nuclear, and biofuel.
Marathon Digital also has a robust and comprehensive partner network that includes companies, municipalities, and institutions with stranded power, energy, and microgrid expertise and significant interest in bitcoin mining and research efforts associated with it.
For the three months that ended on September 30th, 2023, the company registered a revenue of nearly US$98 million. For the same period the previous year, Marathon Digital’s revenue was nearly US$12.7 million. For the nine months ended on September 30th, 2023, Marathon Digital’s total revenue stood at more than US$230.7 million, a significant increase from nearly US$89.4 million clocked for the nine months ended on September 30th, 2022.
3. IBM
A technology giant in its merit, IBM might not be seen as the most representative company in the blockchain space. But when it comes to innovation, it is one among those rare behemoths that have constantly prioritized blockchain. IBM’s dedicated blockchain services enable trusted data exchange and workflow automation by making significant developments in distributed ledger technology and enterprise blockchain.
IBM’s blockchain solutions are known for their operational agility and speed to value, cost takeout and risk mitigation capabilities, and the power to create new monetization opportunities.
IBM has developed its blockchain platform Hyperledger Fabric. The platform has resulted in 18% higher developer productivity and 30% lower three-year cost of operations. It also made systems 44% faster to resolve unplanned downtime. The solution comes with 24/7 break-fix support, proactive security, and compliance features with regular vulnerability scans and deep expertise in problem-fixing.
The open-source protocol can run in any computing infrastructure across multiple environments, including on-premise and cloud. The fact that the solution incorporates feedback from large and entrepreneurial client engagements makes it more equipped to meet business and technical needs without glitches.
Several well-known businesses have already adopted IBM’s blockchain solution, including Home Depot, ANZ Bank, and more. The solution has helped Home Depot gain real-time visibility into its inventory, while the ANZ Bank partners with a consortium to transform financial guarantee using IBM blockchain.
There is reasonable scope to expect more and more leading players across a range of industry spaces to adopt IBM’s blockchain solutions in 2024.
For the three months that ended on September 30th, 2023, IBM’s revenue stood at more than US$14.7 billion. For the nine months ended on the same date, the company had clocked a cumulative revenue of more than US$44 billion.
What Will 2024 Bring?
2023 was the year when blockchain and its assets regained trust and bounced back. 2024 will be the year when investments will pour in, reflecting the belief that has been reestablished among the investors and retail communities.
People have started realizing the value of crypto and blockchain assets not only as investments for the future but also as a technology that can add immense value to their systems and processes and is ready to embrace other cutting-edge technologies like AI.
Concludingly, we can reasonably expect to see more and more winner blockchain stocks emerging in 2024.
Tags: Blockchain, Insights