How to Invest in Blockchain and the Cryptocurrencies – November 7, 2017

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Welcome to Episode #106 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Dave Bartosiak, the Editor of Zacks Momentum Trader and Surprise Trader portfolios, to discuss one of the hottest topics in investing: blockchain and cryptocurrencies.

Blockchain is the technology that allows cryptocurrencies to exist as it tracks transactions relating to digital assets. But it can also track documents which makes it especially attractive to those in the banking, finance and insurance industries.

Some believe that the blockchain market could be over $2 billion by 2021.

Who’s Providing the Back-End Infrastructure for Blockchain?

A way to invest in blockchain growth, is to invest in the companies that are the back-end leaders.

Several of the big technology companies have already moved into this area, including Microsoft (MSFT Free Report) with the Azure cloud platform, IBM (IBM Free Report) with IBM Blockchain, its public cloud service, and Amazon’s (AMZN Free Report) AWS, who has partnered with the Digital Currency Group.

Do You Own Bitcoin?

On the cryptocurrency side, investors have mostly been buying some of the cryptocurrencies themselves, especially Bitcoin, which has soared.

But, just like the blockchain part of the technology, others are building the infrastructure for this business on the other end.

The CME Group (CME Free Report) recently announced it intended to launch bitcoin futures in the fourth quarter of 2017, pending relevant regulatory review. This is an important development because it paves the way for possible Bitcoin ETFs.

CME Group estimates that the cryptocurrency market has grown to $172 billion in recent years, with bitcoin about 54% of that total, or $94 billion. The bitcoin spot market has also grown to trade about $1.5 billion in notional value every day.

A Prepaid Visa Card

Another way to invest in the cryptocurrency phenomena is through the mainstream payment companies. They’re very aware of the growth in this area and they’re unlikely to remain on the sidelines.

Along those lines, it’s not surprising that on Nov 1, Visa Inc. (V Free Report) announced it had approved a prepaid card backed by the cryptocurrency Monaco for issuance to Singaporean residents.

Monaco said that the demand was strong, with over 17,000 cards reserved.

This card allows cryptocurrency Monaco to be converted into fiat money. It would then be accepted at Visa’s 44 million merchant locations in its network, which is key to future growth.

What else should you know about investing in blockchain and the cryptocurrency growth story?

Find out on this week’s podcast.

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