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Barry Cohen
Barry Cohen
Articles (34) 

Blockchain's Spectacular Growth Offers Outstanding Opportunity

The market for blockchain technology is projected to grow to more than $23 billion by 2023

IBM (IBM) will be working with the Canadian unit of large German drug manufacturer Boehringer Ingleheim to integrate blockchain into clinical trials, according to a press release Tuesday. Use of the technology by other pharmaceutical companies is expected to grow, thanks to blockchain’s ability to improve patient compliance. A related article in MedCity News has stated that Sanofi (SNY), among others, is expected to be next to employ blockchain in clinical trials.

Others in the health care industry are also evaluating blockchain to improve data quality and lower administrative costs. They include Humana (HUM), Multiplan, UnitedHealth Group (UNH) and Quest Diagnostics (DGX).

Blockchain appears to be a huge opportunity for investors. The global market — across all industries is expected to explode. According to a report by Research and Markets, it is projected to expand at a compound annual rate of more than 80%, reaching $23.3 billion by 2023. Growth will be driven by a number of factors, including increasing venture capital funding and investment and a growing need to simplify business processes.

Blockchain has become a popular buzzword. So what exactly is it? In a nutshell, it is a shared digital record of transactions or information of any value, between two or more parties, according to a report by KPMG. Traditionally, validating something online requires multiple systems that must be coordinated by multiple parties. Blockchain enables a more integrated solution. KPMG calls the shift to the technology “seismic.”

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Besides IBM, the 10 largest companies in the world are exploring the use of blockchain, according to Forbes. They include Industrial and Commercial Bank of China Ltd. (OTPCK:IDCBY), China Construction Bank Corp. (OTPCK: IDCBF), JPMorgan Chase (JPM) and Berkshire Hathaway (NYSE:BRK.A)(BRKB). Blockchain promises to improve the efficiency of these giants, but how much it will affect the price of their shares is likely to be small.

The opportunity for a big investor score probably lies in the solution providers. The vast majority of them are still private. The 20 most promising, as listed by CIO Review, are mostly names few are familiar with, such as Adjoint, AlphaPoint, Blockchain Health and Inxpetion. whether any of the top 20 ever go public is a crapshoot, but they may be worth keeping an eye on.

The majority that are public look risky given that most are penny stocks, such as BLOK Technologies (OPTCK:BLPFF) and BTCS (OPTCK:BTCS). One company, Vancouver-based HIVE Blockchain Technologies (OPTCK:HVBTF), has a respectable — for this group  market cap of more than $100 and traded at $5.25 in October 2017 but has since slid to 30 cents.

A few of these smaller firms may turn out to be diamonds in the rough, but investors do need to follow the industry closely to see which companies emerge as profitable, ongoing concerns. Given the size of the blockchain opportunity, the payoff could be healthy.

Disclosure: The author has no position in any of the stocks mentioned.

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About the author:

Barry Cohen
Barry Cohen has nearly 40 years experience in communications and marketing, the majority in senior positions at large international health care companies, including Abbott Laboratories and Bayer Inc.

He has contributed to a number of financial websites, writing primarily about the stocks of health care companies.

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