How to Build a Blockchain Portfolio as an Equity Investor (With Examples)

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October 17, 2019 by
How to Build a Blockchain Portfolio as an Equity Investor (With Examples)

Blockchain investing comes in many forms. You could:

Invest in the digital tokens of the most promising blockchain project.
Participate in equity or token-based crowdfunding campaigns of new blockchain startups.
Purchase shares in publicly-traded blockchain stocks.
In this guide, you will learn how to build equity portfolios that provide you with exposure to the blockchain industries.

Building a Portfolio

Before constructing an investment portfolio, you need to be clear about what your investment objectives are. The key questions you need to ask yourself are:

Why are you investing?
How much will you need to invest to meet that target?
How much risk will you need to take to meet your investment objective?
Stacked wooden blocks with question marks on them.

The responses to these questions will determine your asset mix, the amount of capital-at-risk, the expected return, and how much risk you will need to take.

A low-risk equity portfolio will be composed of mainly large-cap stocks while a higher risk/return requirement will likely entail holding mid- and small-cap stocks, which are considered riskier but generally come with a higher ROI potential.

Once you are clear as to what your objectives are, what type of return you require to meet the objectives, and how much risk you are willing to take, you can start looking at the blockchain opportunities available in the market.

Blockchain Opportunities in the Stock Market

We can categorize blockchain stocks into two types:

Large-cap stocks with a blockchain element
Pure-play stocks
Large-cap stocks include technology giants such as IBM, Microsoft, and Oracle, which offer blockchain-related solutions as part of their overall business offerings, as well as financial institutions, such as ICE, JPMorgan, and Nasdaq, that are betting big on digital assets and the blockchain.

Pure-play stocks, on the other hand, focus primarily on blockchain technology or digital currencies. These companies are generally small companies with low market capitalization. Examples of pure-play stocks would be publicly-traded bitcoin mining companies HIVE Blockchain and Northern Bitcoin. Continue reading…

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