The Perfect Cryptocurrency Portfolio

There’s no question the tech market is face-meltingly hot right now.

Yesterday the Nasdaq — the world’s premier technology stock exchange — closed at record highs again.

Amazon [NASDAQ:AMZN] led the charge. It was up 1%.

The share price rise wasn’t anything to do with its imminent Australian launch. I’m afraid our puny market is just not that important in the global scheme of things!

Instead it was to do with news that Amazon’s cloud business is expecting to do a huge healthcare deal with Cerner [NASDAQ:CERN] soon.

Cloud computing — not low margin retail — is actually Amazon’s most profitable division.

But what’s 1% gains when you could get 350%?

That’s what one stock on the Nasdaq has made investors in the last month or so…

This red-hot stock is an obscure Chinese internet company you’ve probably never heard of.

How has it risen so fast, you ask?

New business wins? An increase in profits? Better gross margins?

No, none of that boring ‘business-y’ stuff.

Instead it’s launched its own cryptocurrency!

On 12 October Xunlei Ltd., a Shenzhen-based provider of online media services, introduced its ‘Wanke coin mining’ cryptocurrency project.

(Editor’s Note: Honestly that’s what it’s called!)

Since then, it’s rallied more than 350%, making it the best performer in the Nasdaq over that time.

Even better than bitcoin’s returns:

Xunlei best performing stock - 24-11-17

Source: Bloomberg
[Click to enlarge]

This is the start of a new and growing trend in my opinion.

You see the relentless growth in cryptocurrencies is now getting mainstream stock investors’ attention.

It hasn’t failed or fizzled out as many expected.

But a lot of people still don’t want to buy cryptos directly. Stocks that can jump on the bandwagon are the next logical place to look.

This trend grows on a near daily basis… 

Just last week investment marketplace Reality Shares partnered with the Nasdaq to launch an index that tracks the nascent blockchain industry.

Fredrik Voss, vice president of blockchain innovation at Nasdaq, said that the collaboration represents a ‘tangible way’ to track the growth of blockchain sector.

Eric Ervin, CEO of Reality Shares, said:

As these new applications are deployed, we believe these companies will most likely become disrupters in their industries, with potential to profit at the expense of laggard companies that do not deploy blockchain applications.

Another firm, Amplify Trust, is also filing for permission to invest and trade in blockchain start-ups.

The investment opportunity in cryptocurrencies is more than the tokens themselves. Many roads lead to Rome, it would seem.

If you want to fully take advantage of the cryptocurrency boom you have to look beyond bitcoin.

The perfect blockchain portfolio

As you’ll probably have guessed, I’m a big fan of cryptocurrencies.

From an economic point of view, I see them as a great leveller. Ready to counter the crony capitalist outcomes created by corrupt central banks.

As former Vice President of the US Al Gore stated:

‘I think the fact that within the bitcoin universe an algorithm replaces the function of the government …[that] is actually pretty cool.’

A literal disruptor of governments.

It’s exciting.

You’re living in a pivotal moment in history.

I think it’s a very big deal.

And I’ve been busy as lead analyst of Port Phillip Publishing’s Secret Crypto Network getting people into cryptos that are making them double and triple digit gains.

But here’s the thing…

I think cryptocurrencies themselves are only the beginning. The tip of the investing iceberg, so to speak. Not a side show, but also not the only game in town.

Don’t get me wrong, I’m still a long term crypto bull.

But for investors, I think there could be equally compelling opportunities in the stock market.

Unlike cryptocurrencies, this area isn’t anywhere near full swing yet.

Not in the short term. And definitely not in the long term.

Which means huge returns are still on the table.

I’m talking about a world beyond bitcoin.

These are opportunities in the stock market that use the technology behind bitcoin — blockchain technology — to reinvent, reinvigorate and redefine entire industries.

In my opinion the perfect blockchain portfolio includes both good cryptocurrencies and good blockchain stocks.

You can find out more about how to get both here.

Good Investing,

Ryan Dinse,
Editor, Money Morning

Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle.

Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.

Ryan's premium publications include:

Money Morning Australia