Are You Ready For the Blockchain Boom?

May 7, 2018  |  Michael Reilly

We’re just one day away from the launch of our new Blockchain-Boom Model on May 8th.

In preparation, here’s a further look at some of the companies within our blockchain universe. These are stocks which may or may not be included in the model on launch, depending on their relative strength scores at the time.

When the model launches tomorrow, it will only contain positions from the universe with the highest relative strength, as these tend to continue outperforming for a significant amount of time thereafter.

What’s all the hype?

If you’re still wondering why we’re so excited about blockchain, you should probably instead be asking why everyone is so excited about blockchain.

All the tech giants are getting in on the action, which could be seen as a pretty clear indicator that big things are on the horizon for the budding technology.

Last week we took a look at Amazon Web Service’s blockchain project, which has potential applications in the financial sector, logistics, healthcare, and social security.

(Click here to catch up on all the articles we’ve published about blockchain investing.)

They’re hardly the only big, established company betting on blockchain. Google is hot on their heels with plans to develop an in-house blockchain to compliment its cloud computing business. Google Cloud is already the fastest growing major public cloud provider and they’re looking at blockchain as a way to expand and offer a greater range of services than their competitors.

It’s not just the established tech companies developing blockchain platforms either.

JP Morgan Chase & Co. (JPM), another member of our blockchain universe, and the world’s second most valuable bank by market capitalization, has been working on its blockchain platform, Quorum, for over a year.

They’re one of the biggest banking institutions to focus on blockchain, but they’re not alone. Banks have already spent millions on blockchain in an effort to develop technology that will allow them to slash costs and simplify their processes.

“We continue to believe distributed ledger technology will play a transformative role in business which is why we are actively building multiple blockchain solutions,” JP Morgan said in a recent statement.

There’s a good chance we’ll see a lot of financial transactions moving to blockchain platforms as the technology develops. JP Morgan may end up leading the charge, as they just began testing a blockchain platform for issuing financial instruments with the National Bank of Canada.

In the words of Jack Dorsey, CEO of Twitter and Square Inc., “There are many problems we can help solve [with blockchain] that are not just related to finance, but finance is an obvious one.”

Avoiding the “cryptocurrency risk”

Speaking of Square Inc. (SQ), they also happen to be a member of our blockchain universe.

Square Inc. created the “Square Reader”, which you’ve probably used if you’ve bought something from a mobile business like a food truck or street vendor over the last few years. It’s a tiny square device that plugs into any smartphone and acts as a mobile credit card processor.

As you can imagine, a device like this made a huge difference in the lives of small business owners who vendor goods on the move. Following success of the Square Reader, Square Inc. expanded its services and now offers a peer-to-peer cryptocurrency exchange with the ability to buy and sell bitcoin.

Square Inc. has reported some losses resulting from their bitcoin initiatives, but their stock price continued to climb even as bitcoin prices plummeted toward the end of 2017:


This is a great example of how the success of the best blockchain-related companies remains completely independent from the price of crypto.

Companies like Square Inc. make great candidates for our universe because their strength doesn’t carry the added risk you see in the cryptocurrency market. Even when reporting losses directly related to bitcoin, Square suffered only minimal hits to their stock price.

We’ll continue to track the performance of all the companies and ETFs in our blockchain universe, right up to the start of our new model.

Make sure you mark your calendar in preparation for our Blockchain-boom webinar tomorrow (May 8). We’ll be announcing our positions then, and giving you all the info you need to understand the world of blockchain and our approach to relative strength investing.

If you have any questions, feel free to schedule a one-on-one appointment with us here. We’d love to talk with you

Get Our FREE Guide

How to Find the Best Advisor for You

Learn how to choose an advisor that has your best interests in mind. You'll also be subscribed to ADAPT, Avalon’s free newsletter with updates on our strongest performing investment models and market insights from a responsible money management perspective.

Avalon_NewGradient_24Feb22 copy