IDC: Spending on blockchain to surge 89% in 2019


"The use cases that comprise the blockchain opportunity are developing as swiftly as the technologies enabling it."

— IDC, Worldwide Semiannual Blockchain Spending Guide

What’s the tried-and-tested formula for making good money in today’s global economy?

It's no secret: You invest in rapidly growing, transformative industries … and in the stocks of individual companies that are on their way to becoming billion-dollar businesses. I'm talking about things like microprocessors, fiber optics, DNA sequencing, media file compression software, and social media.

Sure, investing with a rear-view mirror is easy. But right now, you have one of the biggest innovations of this century staring you right in the face. And almost all the investors I talk to don't have a single penny allocated to this transformative technology.

I'm talking about blockchain.

Blockchain is to Bitcoin, what the internet is to email. Blockchain is nothing more than a huge communication system, on top of which you can build applications. Cryptocurrencies were the first application to be built on the blockchain, and their design has inspired many other applications like protecting your online financial transactions, food and drug safety through supply-chain management, and even keeping robots from becoming hackable.

Blockchain has been around since 2008 when the mysterious Satoshi Nakamoto invented it to create the first digital currency, Bitcoin.

Cryptocurrencies struggled last year but their underlying technology — blockchain — is taking off like a rocket. According to International Data Corporation, American companies are going to spend $2.9 billion in 2019, an 88% increase over the $1.5 billion spent last year.

This isn't a one-year phenomenon, either. IDC expects blockchain spending to grow by an annual compounded rate of 77% over the next five years to an estimated $12 billion.

There is some BIG money to be made by investing in companies leading the blockchain charge. How can you invest in them?

The Pick and Shovel Makers. During the gold rush, the ones who really got rich were the ones who sold the mining tools. In the blockchain world, those tools are semiconductor chips and hardware that make it possible to "mine" cryptocurrencies.

The Miners. In the cryptocurrency world, the actual "miners" are the ones who verify cryptographic transaction and are rewarded with digital coins. These miners then immediately sell the cryptocurrencies they receive on the open market and pass along the profits on to their shareholders.

Payment Processing/Lending: Perhaps no industry will be more affected by blockchain than payment processing companies. Blockchain makes it possible to bypass costly middlemen — banks, brokers, trust companies — and do it cheaper and faster.

Business Development/Consulting Companies: Blockchain is new and complex, and very few companies have any in-house staff members who are blockchain-competent. A growing wave of companies incorporating blockchain technology into their existing businesses and are hiring consulting companies to integrate the new tech.

Those are exactly the type of stocks that I recommend in my Weiss Crypto Investor newsletter. But if you're more of a passive ETF investor, there are several blockchain-focused ETF to consider:

  • Amplify Transformational Data Sharing ETF (BLOK)
  • Reality Shares Nasdaq NexGen Economy ETF (BLCN)
  • First Trust Indxx Innovative Transaction & Process ETF (LEGR)
  • Innovation Shares NextGen Protocol ETF (KOIN)

Don't be concerned that none of the above ETFs don't contain the word "blockchain" in their name. The SEC has prohibited the ETF industry from using blockchain in their name.

Related post: This industry is bursting at the seams with 10-baggers

Regardless of which vehicle — individual stocks or ETFs — you choose, we're talking about the type of profits that could set you up for life. I'm talking grand slam, home run type of profits … so get on board.

Best wishes,
Tony Sagami

About the Technology Analyst

Even in the worst years for stocks, Tony was twice named “Portfolio Manager of the Year” by Thomson Financial. He was one of the first to introduce computer software for trading stocks. And in the early 2000s, he wrote “The Supernet,” providing a vision of the future internet that was far ahead of its time.

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