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Cristiano Bellavitis, Ph.D.
Cristiano Bellavitis, Ph.D.
Articles (8)  | Author's Website |

IBM Investing in the Future of Blockchain

How blockchain technology will disrupt various industries

December 24, 2016 | About:

Most investors believe that blockchain and Bitcoin (the digital currency) are synonyms. What most people don’t know, however, is the fact that the blockchain is an “infrastructure” and Bitcoin is one of many applications. IBM (NYSE:IBM) is heavily investing in the blockchain to disrupt some large industries.

The blockchain industry

A recent study from Markets and Markets speculates that the blockchain industry will grow from $210 million in 2016 to $2.3 billion by 2021, for CAGR of 61.5% during the forecast period. IBM and Microsoft (NASDAQ:MSFT) are the market leaders. IBM provided examples of how they are implementing the blockchain.

Blockchain can disrupt large industries such as food safety, health care and fintech. Below a few examples of IBM applications in the blockchain industry:

IBM recently announced a $200 million investment in the new global headquarters for its Watson Internet of Things business in Munich. IBM is developing a new capability that connects IoT data to Blockchain through the IBM Watson IoT Platform.

IBM monetization and blockchain performance

Considering that the estimates are for a total global industry valued at $210 million in 2016, at the moment this segment is of minor importance to IBM. We estimate that IBM has approximately 50 paying customers, therefore the revenues generated would be in the range of $6 million a year, plus ancillary revenues in the range of $50 million a year.

Disclosure: We are long IBM.

The full article can be read here.

To learn more about Integer Investments please visit our website (www.integerinvestments.com).

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About the author:

Cristiano Bellavitis, Ph.D.
I am portfolio manager at Integer Investments. We focus on U.S. and European equities with a value/GARP strategy. I am also an assistant professor at the Auckland Business School in New Zealand. I earned a Ph.D. from Cass Business School, City University of London. I apply academic rigor to my investment strategy.

If you want me to follow certain stocks, feel free to get in touch.

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