26 Firms Driving Innovation in Blockchain

  • Crypto has passed a tipping point and will only grow bigger, JMP Securities says.
  • They broke down in a recent note the several reasons why they’re bullish on the space.
  • The firm also shared 26 publicly traded companies helping to drive innovation in the space.

Equity researchers at JMP Securities, a San Francisco-based firm, don’t characterize their bullishness on crypto in light terms.

In a note to clients published earlier this month, they said that crypto “could be the biggest innovation of our lifetime.” That’s lofty praise considering relatively recent inventions like the internet and smartphones.  

But Devin Ryan and Brian McKenna, the two authors of the note, back up their assertion. They believe the crypto space has passed a tipping point — or has reached “escape velocity” — and will only grow bigger, and point to a number of reasons why. 

One is because they see the world becoming a more decentralized place as it becomes more digital, which will allow blockchain technology to play a crucial role. Many decentralized projects, like insurance services and lending platforms, have already been built on smart contract blockchains like ethereum.

Investors have also poured into the space — not just into bitcoin, but into a wide array of projects — setting it up for success, they said. Bitcoin alone is worth more than $1 trillion, a

market cap

that would theoretically make it one of the biggest companies in the world. Crypto’s total market cap is about $2.6 trillion.

“As adoption and utilization have accelerated, industry valuations have also grown, especially in recent years, and today we estimate that over half a trillion dollars of market value can be attributed to the companies that are providing the infrastructure to support the crypto economy,” Ryan and McKenna wrote. 

“The owners of this value include institutional investors, venture capitalists, insurance companies, financial institutions and corporate executives, all of whom have a vested interest to protect and grow the value of their investments, and we expect many of these individuals will be active and effective advocates for the industry,” they added.

User growth is ongoing at a steady pace, beating the adoption rates of the internet in its early days, they said.

JMP Securities

Further, many key former regulators from the traditional financial world are now involved with crypto and will help the space develop, they said. Some examples include Larry Summers, the former US Secretary of the Treasury who is on the board of Square and advises Digital Currency Group; and Arthur Levitt, the former SEC chairman now serving as an advisor to Bitpay, Figure, Omniex, and PeerIQ.

Considering the above bullish fundamentals, crypto provides a compelling investment opportunity, the JMP analysts say.

But buying crypto itself isn’t the only way to capitalize on upside — in fact, it’s a volatile way. There are also publicly traded firms that are driving innovation in the space.

In the note, Ryan and McKenna listed 26 firms leading the charge in crypto, spanning a number of sub-sectors. In a phone call with Insider on Wednesday, Ryan said he likes Coinbase in particular because they are “building out the plumbing of the crypto economy.”

“They are going to connect many of the companies into the crypto economy that have not entered yet,” he said.

All 26 stocks are listed below by their subsector. 

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