three must-own stocks that will power blockchain’s …

THE INVESTMENT OF THE DECADE

By Teeka Tiwari

THREE MUST-OWN STOCKS THAT WILL POWER BLOCKCHAIN’S $30 TRILLION REVOLUTION

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It was 1997.

Larry and Mary didn’t have much money, but they wanted to do something for their 12-year-old son Ryan. So they bought him two shares of stock

in a small retailer.

Their total investment was less than $50.

Over the ensuing years, the family watched the stock split several times. The value kept going up. Ryan continually asked to cash in the shares. But Larry and Mary kept holding.

They’re glad they did. Ryan ended up using some of the proceeds from that investment to buy a house.

Can you imagine that? A $50 investment buying a house?

That’s possible because that original investment has gone up more than 172,000%. And the tiny bookseller they invested in called Amazon has grown into a trillion-dollar internet giant.

Jeff Bezos says he hears stories like Larry and Mary’s all the time.

As he just explained to shareholders in his final letter as CEO, “I know people who’ve used their Amazon money for college, for emergencies, for houses, for vacations, to start their own business, for charity – and the list goes on.”

Of course, most people didn’t do what Larry and Mary did.

They didn’t buy Amazon back in 1997. Not even a tiny amount.

And even among those who did, most probably sold out before the bulk of the gains happened… just like Ryan wanted to do.

What might they be doing for themselves or others right now if they’d only made a different choice?

What would those people give for a chance to go back and do it all over again?

And most importantly, what would you give for the opportunity to go back to 1997 knowing everything you know now?

That’s essentially what we’re going to give you here.

Because as you’ll see, a new megatrend is just getting underway...

It’s going to reshape daily life more than the original Internet boom did...

And we’ve identified a handful of companies that will take this megatrend from its infancy to mainstream adoption.

Investing in these stocks could easily hand you the same type of life-changing gains that Larry, Mary, and Ryan received from their meager investment in Amazon… but in a fraction of the time.

THE INVESTMENT OF THE DECADETHREE MUST-OWN STOCKS THAT WILL POWER BLOCKCHAIN’S $30 TRILLION REVOLUTION

By Teeka Tiwari


In a nutshell, this is your “dotcom do-over.”

All you have to do is take action today. Because we believe gains as high as 252% are possible just in the next year alone. And over the next few years, those gains could skyrocket higher.

But before we get into the companies…

Why Most People Won’t Make Big Money from the No. 1 Trend of the 2020s

Larry and Mary’s story isn’t all that exceptional.

They invested a tiny amount of money in a stock that was already getting a lot of hype after it went public.

Then they held on tight and let the internet megatrend play out to its logical conclusion.

In this case, they profited off the internet enabling consumers to shop online. But as we know, it revolutionized almost every aspect of our lives, whether it was shopping, communication, or entertainment.

But let’s think back to the time you first heard about the internet.

If you thought it was a novelty… a way for geeks to talk to each other… or a place for posting pictures of dogs and cats… rather than a game-changing technology, you weren’t alone.

That’s what most people thought about it – including many of Wall Street’s smartest investors.

I know because I was working on Wall Street at the time. And I had plenty of those conversations.

The headline at the top of the page from a Newsweek article in 1995 says it all…

Could they have been more wrong?

The reality is that at first, most revolutionary technologies seem too niche, too abstract, and too

impractical for mainstream adoption.

Take cell phones.

Back in the 1990s, Motorola’s original bag phone was one of the more popular attempts at creating a portable cell phone. It was also the size of a purse...

Source: Wiki Commons

You had to pay $45 per month just to have it hooked up for service…

And at another 45 cents per minute – plus additional roaming or long-distance charges – it was simply too expensive for most people to use the product.

At the time, did it seem plausible that every teenager in America would end up using a mobile phone from dusk ’til dawn daily?

Of course not.


Today, you’d be hard-pressed to find someone who doesn’t have a cell phone with full internet access.

Moreover, they’re almost certainly using their internet-enabled phone to buy just about anything they want through online retailers like Amazon.

We take that entire process for granted now.

But most people didn’t believe it was going to happen back in 1997.

Friends, please don’t make the same mistake this time around.

The believers who get in just as the technology is hitting its stride – the Larrys, Marys, and Ryans – will be the ones who end up with 170,000%-plus gains.

Indeed, when you’re talking about a megatrend like the internet or cell phones, the biggest gains are made as the world moves from the early adoption phase to the mass adoption phase.

As I’m about to show you, that’s exactly where the No. 1 megatrend of the 2020s is at right now.

Even if you don’t fully grasp all the implications yet, please trust me when I tell you this megatrend is ushering in the type of seismic shift that only comes around every decade or two.

It will alter our world just as substantially as the Internet did...

Why “Genesis” Will Radically Alter Our Lives This Decade

Long-time readers may be familiar with what I call “genesis” technology.

It’s my term for blockchain technology.

And many years from now, when we look back on the waves of innovation that launched us

to new levels of human advancement, we’ll see blockchain at the beginning.

At its core, blockchain is just a very secure way to store information... the safest way to store information that has ever been devised.

A blockchain is simply a decentralized, distributed online network.

The internet is a great example of this type of network. No one owns the internet. And each computer logged into the internet is a “host.” Even if you shut down one host, it won’t shut down the entire system.

The blockchain works the same way.

Thanks to the internet, today we can instantly send text, voice, and video messages to anyone around the world with just a click of a button.

Soon, you’ll be able to exchange something of value online as well – like a stock certificate, land deed, or even a car title – with just the click of a button… all thanks to the blockchain.

Blockchain is already used to record and facilitate transactions in crypto… but it has so much more potential beyond that.

I can’t possibly go into all of them in detail here. But here are a few examples...

One area is fraud.

Blockchain is being used to combat $1.7 trillion in counterfeit goods sold each year. A blockchain-based voting system has already been tested out here in America.

And the U.S. Postal Service applied for a patent that would use blockchain to hopefully make voter fraud a thing of the past.

Healthcare will be another big area for the technology.

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Blockchain could greatly help reduce costs and also secure our medications and vaccine supplies.

For instance, Moderna just announced a new project that will use blockchain to help open up the country even faster and should help greatly slow down the spread of deadly viruses in the future.

Blockchain could also help prevent food contamination, which kills more than 400,000 people in the world every year.

Companies will be able to figure out precisely where something has gone wrong in the food supply and eliminate the problem, instantly.

That’s why McDonalds, Starbucks, and Walmart are all investing heavily in blockchain.

Blockchain is also being used to help modernize the $217 trillion real estate industry. That industry alone is 100 times bigger than crypto.

And these are just a few examples of the application of genesis technology.

So it’s no surprise Wall Street is getting in on this trend...

Morgan Stanley is rumored to be on the verge of making a huge $2 billion investment in the space.

Goldman Sachs has invested in eight different blockchain startups to the tune of $955 million.

Even the conservative life insurer, MassMutual, has now invested $100 million in blockchain.

Put it all together, and Cisco believes the blockchain could create “efficiencies and new business value” of $30 trillion this decade.

And we’ve found the key companies that will ride this trend to Amazon-like gains. By investing in these companies right now, you are setting yourself up to ride the massive wave of blockchain adoption that’s directly ahead of us.

So let’s look at each one a bit more closely…

IMPORTANT NOTE: Immediately after our buy recommendations, we often see an initial price spike. We understand this can be frustrating. But don’t worry. Most of the time, the recommendation falls back below our buy-up-to price. Be patient, use a limit order, and let the price come to you.

Company No. 1: The King of Exchanges

Intercontinental Exchange (ICE) owns 12 global exchanges, including the largest in the world – the New York Stock Exchange.

It also provides markets for stocks, derivatives, interest rates, credit, foreign exchange, metals, and agricultural commodities.

ICE also owns Bakkt (pronounced “backed”), which is shaping up to be a leading crypto exchange. We’ll get more into that below. First, let’s provide some background on ICE’s business.

Think of ICE like a global casino operator.

It takes a little piece of every trade on every exchange it owns. Unlike a casino operator, though, it takes on no risk. When somebody wins, it’s the loser who pays the winner.

ICE is there to ensure the buyers and sellers have a market they can operate in.

That’s how ICE makes its money. It rakes in trading fees from its primary exchange business. They might be pennies, half-pennies, and half of half-pennies… But they quickly add up. ICE pulled in earnings of $3.6 billion on $6 billion in revenues over the last year.

The company is also a leading global exchange for commodities – including futures contracts for oil, natural gas, sugar, cotton, and coffee.


It handles nearly 80 million trades a year from commodity traders around the world.

Today, the majority of ICE’s revenues comes from its exchanges. ICE regulates marketplaces for the listing, trading, and clearing of derivatives, commodities, foreign exchange, equities, and ETFs.

But while it dominates the exchange business, management isn’t resting on its laurels.

Over the last several years, the company diversified its revenue stream.

It recently made an $11 billion acquisition of Ellie Mae, a digital mortgage lending platform. That will allow the company to benefit from the digitization of the home financing process.

In fact, in the first quarter of 2021, its mortgage technology division’s revenue jumped more than 670% from Q1 2020.

The company’s visionary CEO, Jeffrey Sprecher, has been the driving force behind its growth and innovation.

Fortune once dubbed Sprecher as a “disrupter par excellence.” That’s because he “stands alone as the leading force in modernizing the world’s exchanges in recent years from open-outcry pits into super-efficient electronic marketplaces.”

Sprecher spearheaded ICE’s recent blockbuster project: Bakkt. It’s a global platform for trading digital assets that launched in 2018.

ICE partnered with several big guns on the Bakkt project, including Microsoft, Boston Consulting Group, Starbucks, Fortress Investment Group, Eagle Seven, and Susquehanna International Group.

And Bakkt is continuing to build a secure platform where global institutions can store, transact, trade, and transfer digital assets.

For example, on the institutional trading product

side, Bakkt launched its one-day, physically settled bitcoin futures contracts in September 2019. It’s seen as much as $200 million in daily trading volume since then.

And we expect that to grow exponentially…

You see, when institutions complete daily futures trading with Bakkt, they receive actual bitcoin. This is different from Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE) contracts, which are cash-settled futures contracts.

This is monumental because it allows financial firms to deal directly in crypto assets, not crypto derivatives. ICE set itself up to be the epicenter of serious institutional crypto trading.

And the stakes are massive. ICE is the first globally recognized company to offer crypto custody and trading for institutional investors.

In the crypto space, similar first movers were Coinbase (the most popular crypto exchange for individuals) and Binance (the major Chinese crypto exchange). These two tiny companies operate in a tiny ecosystem.

It’s estimated that there are only 35 million crypto buyers. Yet between the two, they made profits of over $1 billion last year. That’s more than Deutsche Bank – the 148-year-old German bank – made that year.

So as crypto trading goes mainstream, we think ICE could emerge as a global linchpin offering crypto trading services to a worldwide base of 500 million stock buyers.

And as ICE sees demand for its bitcoin futures product ramp up, it’ll launch other crypto trading products, too.

In fact, it’s already launched the Bakkt Warehouse (which provides safe custody of bitcoin for all institutions)... bitcoin cash-settled


futures in Singapore… and the first regulated options contract for bitcoin futures.

Recently, it was announced that Bakkt is going public via a special-purpose acquisition company (SPAC) called VPC Impact Acquisition Holdings. That’s still good news for ICE. It will hold a 65% stake in the company. And Bakkt’s public listing should bring renewed interest to both companies.

This is all showing up in the company’s bottom line… in the first nine months of 2020, it set records in revenues, adjusted operating income, and adjusted earnings per share.

But there’s still more room for growth in the years ahead. As mentioned, the company will continue to launch new products that’ll earn more fees. And it will continue to reap the benefits of its stake in Bakkt.

What It’s Worth

Factoring in all of these catalysts, we believe the stock could trade as much as 15x higher from where it is today.

Operating as a traditional exchange and data provider, ICE is a marvelous stock to own. You have all the upside of the crypto market wrapped up in a traditional exchange powerhouse that’ll go on making billions in profits with or without the crypto market (which could become the largest alternative asset class in the world).

However, Bakkt has the potential to lift ICE shares into the stratosphere. Bakkt is currently forecasted to earn over $800 million in fees off of merchant discount payments and crypto trades placed.

At the end of 2020, Bakkt’s addressable market stood at $1.6 trillion. With crypto adoption skyrocketing, Bakkt expects that to triple to $5.1 trillion by 2025.

As a result, Bakkt anticipates it will expand its business at an annual rate of 65% by 2025.

However, after five years, it’s difficult to maintain a rapid pace of growth, so we’ve forecasted Bakkt’s growth to slow to half of its current forecasted growth rate by 2030. That still equates to annual revenue of $64 billion, with ICE collecting 65% of that, given its ownership stake.

Even without Bakkt, ICE is a remarkably strong business. It’s maintained a solid 21% growth rate over the past decade. If we forecast it continuing to grow at that clip, it’ll reach over $55 billion in revenue. However, adding its share of Bakkt’s revenue puts that figure closer to $97 billion.

Factoring in ICE’s historical net profit margin of 34%, and the potential growth in its share count, we forecast ICE’s earnings per share (EPS) to reach $58.64.

As a whole, ICE’s entire industry has historically operated at a 30.3 price-to-earnings (P/E) multiple. (The P/E ratio measures how much investors are paying for each dollar of current profits.)

Applying that multiple to ICE’s EPS gets us our forecasted price target of $1,775. That’s a 1,469% jump from today’s prices.

Owning ICE today is a no-brainer. Regardless of the potential upside of its Bakkt division, it’s a stock you want in your portfolio.

Action to Take: Buy Intercontinental Exchange (ICE). Buy-up-to Price: See the portfolio page here. Position Size: Up to 1% Asset Allocation: Equities

Company No. 2: Powering the Blockchain Revolution

When most people think about big internet winners, they think of companies like Amazon, Google, and Facebook.

But for every Amazon, there’s a “behind the

https://members.palmbeachgroup.com/palm-beach-letter/portfolio/


scenes” company like Cisco that returned a lot more.

Cisco may no longer be a household name like Amazon or Facebook. But the routers it manufactured helped connect users and companies around the world. And they were a big factor in hastening the rise of the internet in the 1990s. That’s why Cisco was the decade’s fifth-best stock and returned an amazing 67,491%.

That was 15 times better than Amazon during the decade.

Or take Qualcomm, another “behind the scenes” company. Its technology was critical for making sure our cell phones work by connecting them to cell networks. And it handed investors a return of more than 10,000% over the 1990s.

So rather than focusing exclusively on the top names associated with a technology, you can also make incredible gains by investing in the “picks and shovels” plays that help the tech gain traction.

And I believe we have another opportunity like that before us… as one company has brilliantly positioned itself to scoop up billions in revenue by supplying the key hardware needed to power the blockchain boom.

Without getting too technical, here’s the basic idea…

Remember, a blockchain network – also known as a distributed ledger – is comprised of multiple computers. Those computers are constantly creating and validating individual blocks of data. And those blocks of data are records of the various transactions taking place on the network.

Of course, the computer owners don’t want to do that work for free, especially since the tasks require a lot of real-world energy that costs real-world money.

So, as part of the process, network participants

can get rewarded in payouts of whatever cryptocurrency the network is using – say, bitcoin, for example.

This is what people mean when they talk about crypto “mining” – a dual-purpose activity where computers are both running a given blockchain network and helping to create new coins in the process.

Every system has its own rules about how this process happens.

But what’s important to know is that all of the computers on a given network are essentially racing against each other to validate the data as quickly as possible.

Enter the importance of processors – the engines that run computers.

In the early days, crypto miners mostly relied on central processing units (CPUs). However, CPUs suffered from limited processing speeds, and the high amount of power needed for mining limited their output.

So miners eventually moved to graphics processing units (GPUs). A standard GPU has processing speeds as much as 800 times faster than a standard CPU.

That’s where Advanced Micro Devices (AMD) comes in.

The company makes microprocessors and graphics cards that power a wide range of devices, from PCs to game consoles to industrial machinery. And it’s the second-largest manufacturer of GPUs in the world, just behind Nvidia (another current Palm Beach Letter pick).

Cryptocurrency mining has significantly increased the demand for AMD’s GPUs. And according to Kryptex, a mining service provider, AMD GPUs make up six of the top 10 GPUs for mining.


But that is just one piece of a much larger demand puzzle taking place...

The COVID-19 pandemic had many unintended consequences… and one of the major disruptions it caused was an interference in the supply chain for semiconductor chips.

The supply crunch has gotten so bad that car manufacturers like Ford and GM have asked the Biden administration to step in…

In February, President Biden directed several federal agencies to relieve the semiconductor shortage. He’s also requested $37 billion for legislation to quickly increase microchip production in the U.S.

Now, AMD is selling its existing inventory in record time, so it’s doing everything it can to ramp up production. In the interim, some desperate users are reportedly paying double and triple the market prices for GPUs outside normal supply channels… and snapping up all the supplies away from other users.

Rival Nvidia has begun to address this concern. It designed a GPU specifically for crypto mining that will be sold to industrial Ethereum miners.

AMD hasn’t announced anything like that yet. However, there’s speculation it’ll follow suit.

Moreover, technology is always evolving, and GPUs have increasingly faced competition from improved devices like Field Programmable Gate Arrays (FPGAs). FPGAs score better than both CPUs and GPUs at performing the type of calculations required for blockchain tasks.

AMD started to prepare for this next natural step in crypto mining when it acquired Xilinx in October of last year.

Xilinx is credited with inventing FPGAs, and it’s still a dominant manufacturer of them, rivaled only by Intel. We believe the acquisition will

keep AMD at the top of the field when it comes to providing the hardware that crypto mining and other blockchain projects demand.

What It’s Worth

AMD doesn’t say how much revenue it gets from crypto miners. But we believe Wall Street is underestimating the future importance of FPGAs in the space... and what the Xilinx acquisition could do for AMD over time.

Global Market Insights pegs the value of FPGAs at $6 billion last year and sees it growing to $15 billion by 2027. That implies a 15% compound annual growth rate.

Estimates vary as to how much of that market Xilinx has – anywhere from 38% to 50%.

But even if we take the lower end of the range and keep it steady, this acquisition will add billions in new sales for AMD over the next several years. Equally important, AMD’s profit margins should widen in the process.

With the added boost Xilinx provides, AMD’s revenue could reach more than $20 billion over the next three years.

For our valuation, we’ll rely on AMD’s EV-to-EBITDA multiple, given that AMD has a long-term history of increasing its EBITDA margin by a consistent amount per year.

[Enterprise Value (EV) is a measure of a company’s total value. EBITDA is a company’s operational earnings before removing non-cash expenses. Dividing the former by the latter gives us a sense of what the market is valuing the company at.]

For our model, we compared AMD to Nvidia (NVDA) – AMD’s largest competitor and the world’s most valuable semiconductor company. (Nvidia is also in our model portfolio.)


NVDA has traded at a three-year average EV/EBITDA multiple of 43.4. In three years, we forecast AMD’s EBITDA will be $5.6 billion.

If we apply a 43.4 multiple to AMD’s forecasted EBITDA, its enterprise value would be $245.2 billion. At time of publication, AMD trades at a $91.7 billion EV. That’s a 179% increase – or 2.8x gain – over three years.

At time of publication, AMD trades at about $74. A 2.8x increase would be $207. Not bad for a large-cap company.

However, to determine the full potential of this in-vestment, we have to consider what would happen if bitcoin reaches $500,000, as I’ve predicted.

Between Q1 2020 and Q1 2021, bitcoin’s average price soared 447%. And this has led to a surge in demand for GPU chips from bitcoin miners.

During this same period, AMD reported that the average selling price of its GPUs grew by 32%.

If we forecast bitcoin reaching $500,000 over the next three years, we can model a proportional increase in AMD’s and Xilinx’s selling prices from the certain surge in demand.

Running that through the same valuation we used above, we project AMD’s return would almost double to 327% over the next three years. And that implies a share price of $316.

You’d be hard-pressed to find any already profitable company with that type of growth potential in today’s market. So we recommend buying the shares immediately.

Action to Take: Buy Advanced Micro Devices (AMD). Buy-up-to Price: See the portfolio page here. Stop Loss: None Position Size: Up to 1% Asset Allocation: Equities

Company No. 3: Making Crypto Payments Possible

We’re seeing massive changes in the payment space right now, all thanks to blockchain.

Mastercard is going to allow all of its 55 million merchants to accept cryptocurrencies as payment.

PayPal, which has close to 400 million active accounts, just did the same. Visa also accepted its first blockchain payment.

But there’s one payment company I like better than Mastercard, PayPal, or Visa. It was the first company to add blockchain to its payments system.

I’m talking about Block (SQ).

Co-founded by Twitter CEO Jack Dorsey, Block (formerly known as Square) specializes in digital payments. Its most well-known product is its mobile payment app Cash App (more on this below). But at first, it focused on facilitating payment processes for small- and mid-sized retailers.

Block’s revenues are up 11-fold since 2014 when it added bitcoin to Cash App. That’s actually 14 times more than Visa, six times better than PayPal, and 16 times better than Mastercard.

And the number of payments it’s processing is blowing up, too. Its gross payment volume has grown at an average rate of 46% a year since 2012, hitting 112 billion payments in 2020.

But let’s focus more on Block’s Cash App…

As of March 2021, Cash App has 36 million active users. It first added bitcoin back in 2014, when it allowed merchants to accept bitcoin as payment. But it’s since expanded its offerings to allow its users to buy and sell bitcoin on its app.



It also has a popular auto-invest tool, allowing users to set recurring daily or weekly purchases of investments.

Now, Block is reaping the benefits of its foresight. Over the past two quarters, a substantial amount of Block’s revenue has come from Cash App users buying bitcoin on the app (more on this below).

Block was also one of the first publicly traded companies to make a major investment in bitcoin itself. The company has a total of 8,027 bitcoins with a current value of about $411 million.

Block’s real goal, however, is making crypto payments as easy and seamless as using cash. Much of that work is done through a crypto division, which is on the cutting edge of crypto-to-fiat transactions. In fact, that’s why the company recently changed its name from Square to Block to emphasize its focus on crypto.

Making everyday purchases with cryptocurrencies is still a large hassle. Even if a business accepts a cryptocurrency as payment, it may take hours for the transaction to process and get recorded on the blockchain.

The anonymity of crypto transactions could also expose business owners to possible criminal activity, and fluctuations in crypto prices create an extra layer of financial risk for merchants.

In January 2020, Block received a patent for technology that enables real-time, point-of-sale, crypto-to-fiat transactions. The technology allows a customer to purchase something with their asset of choice.

On the other end of the transaction, the business owner receives the equivalent amount in their own asset of choice.

Say you wanted to buy a cup of coffee from a vendor. Block’s system would allow you to make your payment in bitcoin while instantly converting your payment into cash for the

vendor. And it even includes an option for both parties in a transaction to maintain privacy.

Block has been helping support bitcoin adoption through other efforts related to the “lightning network.” It’s an update to bitcoin’s blockchain that allows for instantaneous transactions.

It replaces the process of mining rigs validating transactions with separate, offline methods that are much quicker. This is a revolutionary change to bitcoin that will allow it to be used anywhere instant payments are needed.

What It’s Worth

In 2020, bitcoin revenue made up 48% of Block’s total revenue, and it accounted for 85% of the company’s increase in revenue from the previous year.

That adds up to $4.6 billion in 2020, a 785% jump from $516 million in 2019, and a 498% average annual gain from 2018.

It’s easy to take this trend and continue projecting it forward – especially as blockchain-based payments become more and more commonplace.

To see how much Block would be worth over the next two years, we first need to make a couple of assumptions.

Block’s bitcoin revenue will likely continue to rise at a similar rate to its growth over the last four years. Block had a stellar fourth quarter. Its bitcoin trade volume per customer jumped 2.5x versus the same quarter a year earlier.

Over 2020, 3 million customers bought or sold bitcoin using the Cash App. Meanwhile, in January 2021, another 1 million new customers bought bitcoin on the app. The demand for bitcoin trading on Cash App is skyrocketing.

In addition to that, the price of bitcoin plays a role in how much revenue Block earns.


In 2020, for example, let’s say we weigh each quarter by the percent of bitcoin revenue Block earned:

• In Q1, it earned 7% of that year’s total bitcoin revenue. In Q2, it earned 19% of that year’s total bitcoin revenue.

• In Q3, it earned 36% of that year’s total bitcoin revenue.

• In Q4, it earned 38% of that year’s total bitcoin revenue.

If we take those weights and multiply them by the average bitcoin price per quarter... the average price of bitcoin per transaction in 2020 was $12,740.

So far in 2021, bitcoin has traded at an average price of $48,900. That’s nearly 4x more than 2020.

Let’s assume Block’s bitcoin revenue grows by 3x in 2021 (which is a conservative estimate). And let’s be even more conservative and assume Block’s bitcoin revenue will grow by just 2x in 2022. And we’ll assume it grows the rest of its business line at its long-term growth rate of 31%.

That gives us total revenue of $35.9 billion in 2022.

Right now, Block is trading at a price-to-sales (P/S) ratio of 7.1. Its largest rival, PayPal, has a ratio of 12.6. We believe Block deserves the same ratio given its faster growth, and greater exposure to bitcoin.

[The P/S ratio compares a company’s stock price to its revenues. It’s calculated by dividing a company’s stock price by its sales per share. It shows how much investors are willing to pay for every dollar of sales. Generally, a comparatively low ratio means the stock is undervalued.]

At a 12.6 multiple, its market cap would be about $452 billion, a 379% increase from its current

market cap of $94.4 billion.

At time of publication, Block traded at $207. That means we could see shares rise to $993 in less than 24 months.

That’s incredible upside for a large-cap company. But even that may be vastly underestimating the potential profit of Block.

I’m on the record firmly stating that I believe bitcoin is heading to $500,000.

Under that blue-sky scenario, we could see Block trade at an implied value of $2,553 – a 1,130% gain from its current price.

That’s with Block simply trading at its current multiple... and when factoring in potential increases in its share count based on its average annual growth.

Therefore, we recommend buying shares of Block immediately.

Action to Take: Buy Block (SQ). Buy-up-to Price: See the portfolio page here. Stop Loss: None Position Size: Up to 1% Asset Allocation: Equities

Bonus Company: Bringing Blockchain to Corporate America

To give you a sense of how big blockchain-based payments are getting, and how quickly they could explode into the mainstream, just consider this…

Facebook is on the verge of bringing blockchain to its 2.8 billion active users. The company is launching and integrating a blockchain-based payment system on its platform that will include its own digital currency.

Of course, even though Facebook is a nearly trillion-dollar company with extensive technical expertise, another company developed the technology behind Facebook’s new currency.



And that company is just a fraction of Facebook’s size, which is why we think it could be another Cisco- or Qualcomm-type play as blockchain adoption goes parabolic.

The company is called VMware (VMW). It’s a publicly traded subsidiary of Dell Technologies that provides cloud-based software used to manage servers and networks.

In November 2018, VMware rolled out a beta version of a private blockchain service designed for business users and other enterprises.

It’s called a “permissioned” blockchain. And it’s different from the public blockchains used by cryptocurrencies.

Permissioned blockchains are private. And they’re designed to be more secure than public blockchains. Yet, companies can still use them to build their own business networks and decentralized applications.

Unlike public ledgers, permissioned blockchains have one or more ledger operators that act as gatekeepers to the system. Those gatekeepers decide who gets into information in certain parts of the network.

Private blockchains provide the same permanent recordkeeping and tamper-proof functionality as public ledgers, with added privacy so a business’s records aren’t viewable to the public.

Likewise, it’s also possible for private blockchains to limit the amount of information that different parties see based on their needs and roles within the larger network.

VMware ’s system has also proven to be faster than a regular Ethereum network and requires a lot less energy to run.

What are some real-world applications?

Many financial transactions are still being

recorded and settled the same way they were decades ago. With a private blockchain solution, several steps can be simplified into one, and the process happens far more efficiently... with better privacy and security.

It’s the same thing for the healthcare industry. Just think about what happens when you go to a doctor’s office right now. Many are still using paperwork systems from the 1970s.

Meanwhile, there are all types of privacy considerations – especially when information needs to be passed from one provider to another.

Blockchain is an ideal way to handle the entire prescription drug process – from the doctor writing it to the patient picking it up at a pharmacy.

The commercial applications are endless, and VMware is in the perfect position to help companies implement various blockchain solutions – especially customers already using VMware’s existing software-defined infrastructure. The company says deployment is a simple five-minute process and it will provide 24/7 support.

VMware’s blockchain solution officially moved from beta testing into full availability back in November 2020... and is already being used by several large customers.

The Australian Securities Exchange is one of them. The exchange executes millions of trades per month and needed a new way to support increasing transaction volumes with secure data sharing. It’s now using VMware’s blockchain software to do that.

Broadridge Financial Solutions is another early customer. The global fintech firm processes trillions of dollars in transactions annually for thousands of clients. It uses VMware’s blockchain software to help it enforce agreements between parties while making it easier to manage the information involved.


As more companies continue to embrace the blockchain – and VMware’s easy-to-implement software version – the company’s revenues should soar.

VMware already has existing, long-term partnerships with nearly every major cloud computing company… including Amazon AWS, Google Cloud, IBM Cloud, Microsoft Azure, and Alibaba Cloud.

What It’s Worth

Despite this potential, and the company’s existing status as a leader in this niche of the software space, VMware is dramatically undervalued.

The average price-to-sales ratio in its industry is 11.4. Yet, at time of writing, VMware is trading at just 5.8. And that’s despite the fact that, unlike most companies in its space, VMware is actually profitable.

We expect this valuation discrepancy will change by the end of the year because Dell Technologies recently announced its intention to spin off its roughly 80% stake in VMware. The transaction is scheduled to close in the fourth quarter of 2021.

Once this happens, VMware will be able to grow its business a lot more freely. Institutions will have a much easier time buying into the company. And it will also become eligible for inclusion in major stock market indexes like the S&P 500, which would bring even more institutional interest and investment.

At time of publication, VMware trades at $164. If we simply assume that VMware will end up with a valuation on par with those of its peers, the stock will easily triple from current levels over the next three years.

However, that valuation is simply assuming VMware can continue to grow at its long-term average. We have much higher sights set for the company.

According to a recent market report, the global blockchain market will be worth $39.7 billion by 2025. That’s up from $3 billion in 2020 and would imply an annual growth rate of 67%.

Now, a lot of that growth can be attributed to the development of public blockchains. But VMware’s focus is on private blockchains. And we believe there’s a tremendous opportunity in this area.

Right now, VMware’s revenues are $11.7 billion. Let’s conservatively assume that VMware’s private blockchain business grows at even just half of the speed of the total blockchain industry. That’s 33.5% per year.

If that happens, it could potentially see revenues breach $27 billion in three years.

VMware trades at a 5.8 P/S multiple. That’s a huge discount to the 11.4 average multiple of its peers.

If its multiple increases to 11.4, its market cap would be $319.1 billion in 2024 – a 372% increase from today. That implies shares would rocket from $164 today to $774.

That doesn’t even include a price boost that stocks typically experience from the attention earned when entering a major index.

Given the near-term catalyst of the Dell spinoff, this is a stock you need to add to your portfolio right away.

Action to Take: Buy VMware (VMW). Buy-up-to Price: See the portfolio page here. Stop Loss: None Position Size: Up to 1% Asset Allocation: Equities

Bringing It All Together

A tiny investment in Amazon is all it took for one family to turn $50 into a house for their son.

They simply put a small amount of money into a



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high-quality company bringing a megatrend into mass adoption.

And Amazon was just one of many stocks that skyrocketed 10,000% to 200,000% as the internet radically reshaped our daily lives.

It will be no different this time around, as blockchain becomes the No. 1 megatrend of the 2020s.

These stocks are all positioned to ride the incredible growth that lies ahead for the blockchain industry.

It’s already starting to happen, and we’re about to hit critical mass.

As we’ve seen from past megatrends – whether it’s smartphones, the internet, or cryptos – the gains can be life-changing.

And you don’t have to risk a lot of money to participate.

So look at this as your “dotcom do-over” and please get started today.

Let the Game Come to You!

Big T

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