If anything blockchain stocks are the hottest stock market sector currently. Some could think this is a bubble, we InvestingHaven’s research team strongly believes that is just the beginning.
Blockchain is not only here to stay, it is a technology that will transform one of the largest industries that so far have remained untouched by the digital revolution: the finance industry as well as every other activity that needs a middleman. Think about it, our daily lives have been hugely impacted: social media impacted how we interact with friends and family, traveling is not the same anymore as we do not need travel agencies any longer, driving a car is in the process of becoming truly different (think of the self driving car), online shopping has changed our shopping experiences, and so on.
But the finance industry is as old school as you can imagine. Cross border payments can take up till 5 working days until they arrive (amazing, really), notaries are registering transactions between people (why can’t we do peer2peer transactions in 2017?), banks need to step in to register purchases of Treasuries, and so on. The number of use cases in which we have to engage with a middleman is amazing (check out slide 7 for more blockchain registration use cases in this investor presentation of MARA). Blockchain will change that.
Imagine how big blockchain will become once it will pass it starts becoming mainstream.
So really what is Blockchain? “Blockchains are decentralized digital ledgers that record and enable secure peer-to-peer transactions without third party intermediaries. Blockchains are secured by miners that use powerful computer networks to secure and verify every transaction.”
InvestingHaven was one of the first financial blogs to write about Blockchain stocks. In January of this year, for instance, we wrote whether BTL Group is a blockchain stock worth buying. That’s when the stock was trading at 3 CAD, note that this same stock now trades above 7 CAD. That is what happens when you follow InvestingHaven, you are on top of new trends.
Moreover, this is what we wrote recently:
- Blockchain stock Overstock.com relentlessly higher
- Is Fintech Select a blockchain stock to buy?
- Blockchain stock BTL Group at all-time highs though more upside potential
Now we spot a new trend: every company that announces they are deploying activities on the blockchain start rally in a way never seen before. Yes, this is the dotcom in 1997.
InvestingHaven present the new kid on the blockchain: Marathon Patent Group (MARA)
Marathon Patent Group (symbol MARA) trades on the Nasdaq. It is a nano-cap stock with a market cap of $52M at the moment of writing so it comes with extremely high risk.
The company announced an acquisition of a blockchain company. It wants to position itself in the booming market of digital asset registration. For instance, your home is for sale and you need to register it on the blockchain before engaging in a transaction. Of course this will become one of the hottest sectors in the blockchain industry. However, many are aspiring to take a position there, so it will be challenging.
Doug Croxall, CEO of Marathon Patent Group, says: “We previously expressed our intent to review alternative business directions with the goal of enhancing shareholder value. We believe the acquisition of Global Bit Ventures will take advantage of an ongoing revolution in digital transactions conducted on blockchains as we see increasing adoption and proliferation of blockchain protocols in our everyday lives. This transaction marks a major milestone for GBV and sets the stage for rapid revenue acceleration in the years ahead.”
“This acquisition provides investors an opportunity to invest in one of the first NASDAQ-listed public companies to enter this rapidly growing industry,” stated Merrick Okamoto, Chairman.
No wonder MARA rose almost 200% on Friday November 24th.
MARA’s chart is amazing. Look at trading volume this week, in particular on Friday.
The hardest thing for analysts like ourselves is to forecast a future price. We look for chart patterns and trends to forecast a future price, but that is not possible in this type of situation. Past prices are not very relevant for companies that choose a new direction.
Suffice it to say investors need to manage risks. The gains can be spectacular, but not all companies will succeed in the (very) long run. That is why the best strategy is to get in as early as possible (as the rally starts) and sell your base capital after the stock has doubled. Moreover, as the company proves to deliver value and generate revenue with blockchain, you can add to your positions on the rise. This is justified because of the “the winner takes it all” effect.
According to the investor presentation of the company, see slide 15, it seems that they have very ambitious plans. We have not seen a more detailed plan yet so until then we do not have sufficient data to do an assessment or forecast.
For now, we believe there is still some upside potential in MARA though investors better become cautious on the short term.
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