Buy This, Not That: Betting Big on Blockchain

Shah Gilani|November 29, 2023

Bitcoin’s had a big year. It’s up 130% on the year… far outpacing the tech-heavy Nasdaq’s nearly 40% gain.

But I’m far more interested in what powers Bitcoin…

The blockchain.

Blockchain is the future… and it’s already here. And it’s going to be much bigger than Bitcoin. It’s driving massive innovation across many sectors.

So in today’s Buy This, Not That… I take a look at several companies involved in blockchain technology.

I cover a couple of the major players… but I also have some surprising plays for you.

Check it all out in my latest video.

Click on the image below to watch it.

Get Details on Shah’s Ultimate Blockchain Play

Transcript

Hi, Shah Gilani here with your weekly BTNT, which stands for Buy This, Not That.

Today I want to talk about cryptocurrencies. More importantly, I want to talk about what’s beneath cryptocurrencies, which is the blockchain.

So we’re going to talk about a couple of companies having to do with crypto and having to do, more importantly, with blockchain. Because blockchain, people, is the future. It’s here, and we’re going to see it everywhere.

For the rest of your life, it’s going to be more about blockchain… much more about blockchain than crypto… so let’s take it from the top.

First up is… some of you know this one… this is Marathon Digital Holdings. The symbol is MARA. Now, they’re a crypto miner, but they also talk on their website about their focus on blockchain ecosystems. That’s probably the thing that intrigues me most about Marathon, but for the most part right now, they are into crypto mining.

What I like about their crypto mining is they try and do it in… what do they call it… an energization way. In other words, they’re trying to use energy in the most efficient, cheapest way because it costs a lot to mine. They’re using landfills in Paraguay to generate electricity to power their crypto mining, which is pretty cool.

However, it hasn’t been cool for the stock. The stock is way down. It’s trading around $11.50 right now. And for good reason. I got to be honest with you, we’re talking about a small revenue of $260 million and a profit margin of -133%. Terrible balance sheet. So there’s really nothing to like there other than what they do, if you like crypto mining.

The stock has just collapsed – down from $83 to, like I said, around $11.50. But I’m going to call it a BUY.

Why? Because I think you can treat this like a meme stock… because hey, come down from $83 to $11.50… maybe give it a shot here. Why a meme stock? Because 25% of the floating shares have been shorted. That’s usually good for a nice pop. So if you want to play this like a meme stock, maybe you get those 25% short of float shares to cover, you get yourself a nice little ride higher.

Yeah, speculative only, MARA, Marathon Digital. It’s a speculative buy, people.

Next up: Coinbase, symbol COIN. Now, Coinbase has been on a tear lately. Maybe that’s because it’s now the largest crypto exchange in the world because Binance is on the ropes.

Coinbase – located in the U.S. – is no piker. It’s got a market cap of $27.64 billion and revenue of $2.63 billion. This is no piker. This is a real company.

Unfortunately, the profit margin is negative, at -28%. They lose money on that $2.63 billion in revenue. EBITDA is -$1.31 billion. Balance sheet… not bad.

Still kind of wishy-washy in terms of the numbers. Not something you want to see from an exchange. You think an exchange really is collecting money on the vig (vigorish) coming and going, and it should be profitable by now, so I don’t know why it’s not.

That worries me, but what I do like about Coinbase is it’s been beaten up. So Coinbase is down from $350, trading now about $100 and… we’ll call it around $120, just shy of $120, down from $350 in November of 2021.

To me, that’s a kind of interesting speculative vibe because if we get positive news on cryptos – maybe there’s a Bitcoin ETF – maybe that will help Coinbase. Maybe that legitimizes the space more for people and maybe they start trading again. And they’re not going to go to Binance, people. They’re not going to go anywhere else. They’re going to go to Coinbase, so I like Coinbase holding this space here. So yeah, it’s kind of a speculative buy here.

Yeah, it’s a little expensive at just shy of $120, but it’s pretty good. It’s up above its 200-day, it’s above its 50-day.

I like it here as a speculation, but be careful with it. I wouldn’t chase it too far down. Maybe 10%, 15%, 20% trailing stop on this thing and ride it up if you can. But yeah, it’s a speculative buy from me on Coinbase.

Next up – and this is not about cryptocurrencies, now I’m talking about blockchain – is IBM. The old International Business Machines. Yeah, IBM people. Symbol, of course, is IBM. Trading around $155.

Now, I wouldn’t normally have IBM in this space, or at least you wouldn’t think… but IBM is big-time into blockchain. Big-time into blockchain. They’re moving a lot of mountains to be big, major players in blockchain…

And the sun is coming through this window. It’s a beautiful Virginia morning, so the shades and colors you’re seeing and the sun coming up… and it’s absolutely gorgeous over the mountains… but I apologize for the rainbow.

IBM is moving big-time. It has been in blockchain since blockchain came about. Now they’re finding tremendous business uses for it, whether it is in supply chain, whether it’s in identity verification and the myriad other business uses that IBM is applying to blockchain.

I like IBM here. It’s not something I’m going to personally buy, but if you own IBM, now you hold on to it. It’s been going sideways for five years, an absolute nothing burger. But now $154 was pretty much a resistance level. It just got above there. It’s trading north of $155 now.

Is that a big deal? No, but it’s above resistance, which it hasn’t been able to do in some time. So yeah, you know what? I’d take a shot on it if you really like IBM. Now is not the time to sell.

The only other reason I would say it’s a conservative buy if you like and love IBM and you have some affinity for it is because it’s got a 4.28% dividend yield. Is that exciting? No, but it’s not bad. 4.28% is not bad, people. If rates come down and you end up with a 4.28% dividend yield on IBM, that’s not the worst thing in the world. So IBM, I’d say it’s a conservative buy.

Next up, another one you probably wouldn’t expect out of me talking about blockchains, is Mastercard. Believe it or not, Mastercard, symbol MA, is pretty much at the forefront of the payment system game with using blockchain and cryptos.

They’re working with their Asian partners to come up with a card, a payments card that allows you to fund it with crypto and exchange crypto with it, pay in crypto and do all kinds of stuff with crypto. So Mastercard is pretty much out there. Now, it’s NOT a buy because trading around 408 bucks a share, it’s a lot of nothing. But I like what they’re doing.

It’s just… it’s such a slow move, so it doesn’t pay enough of a dividend to warrant your attention at just a little over a 2% dividend yield. With IBM, you’re getting a lot more than that. Mastercard, it’s a nothing burger as far as the stock. I like what they’re doing in the Bitcoin and cryptocurrency and blockchain space on payments, but it’s not a buy, people. It’s just a waste of your money. It’s like watching paint dry.

Next up, last but not least, is PayPal, symbol PYPL. I like PayPal. It’s come down off the mountain. It’s been absolutely boring, nothing, running a straight line along the bottom of a chart… pretty much like, “Who cares?”

Well, I care. Why? Because now you have an ability on PayPal to exchange and trade some cryptos. Not all of them, but the big boys, you can trade them. You can also… they have a stablecoin. You can use their stablecoin for lots of… I think if PayPal’s stablecoin takes root and becomes something in the payment space, it could be something very, very big because PayPal is very, very big. It’s profitable. It’s boring, no one talks about PayPal anymore. It’s not the be-all, end-all that it used to be. But guess what, it’s a steady player.

Trading around $56… We’ll call it around $56.50. It’s down from $300, trading around $56.50 from $300. So with their expansion into the blockchain space and with crypto applications and as a payment system, PayPal has a good chance to start heading higher.

I just like it down here because it’s left for dead. I think it’s a worthwhile opportunity. I think it’s a BUY down here, people.

And what I want to say last but not least about crypto and blockchain in general is crypto is the tip of the iceberg that most people see, but blockchain is what drives crypto. And blockchain is going to drive a lot of innovation in a lot of areas. And the area that I’m most fascinated by right now is tokenization, because tokenization is here. And tokenization, people, is the future.

You think cryptos came out of nowhere? Wait till you see what’s going to happen with tokenization.

We’re already starting to see this crazy adoption by huge players like JPMorgan Chase and other banks and industrial companies.

Tokenization is the future. It’s going to eclipse cryptocurrencies. Everything you’ve heard about cryptocurrencies and read… tokenization is going to blow past that, so that’s the space to watch.

There’s some really cool things going on with tokenization. I am on top of it, and we’re going to be doing a lot of tokens… buying a lot of tokens… because tokenization is the meat and potatoes of blockchain.

You can see why I’m so excited about tokens right here… and even get the ticker for my favorite play right now in the token space.

That’s it for me. I’ll catch you guys next week. Cheers.