Investing in blockchain and AI

In today’s fast-paced and interconnected world, the emergence of disruptive technologies has become a catalyst for change across various industries. The financial industry too is experiencing a seismic shift as emerging technologies redefine traditional norms. Among these technologies, blockchain and artificial intelligence (AI) have garnered significant attention, not only for their transformative potential but also for the vast investment opportunities they present. In the past couple of years, investors have witnessed firsthand the transformative power of these technologies and their impact on the financial industry.

Blockchain, which is basically a decentralized and immutable ledger facilitating transparent transactions, has a wide range of sectors with potential to disrupt these industries, including healthcare, energy, banking and more. Its global market size is projected to reach $39.7 billion by 2025. This technology has already demonstrated potential to transmogrify areas like supply chain financing and cross-border payments among many others, effectively reducing overheads as well as eliminating intermediaries. The foreseen potential itself introduces promising investment avenues into fintech organizations that are currently riding the wave and leveraging blockchain’s capabilities to achieve faster and cost-effective transactions. The industry’s confidence in blockchain is also supported by its acclaimed ability to tokenize assets that are continuously presenting some celebrated and revered investors with greater liquidity and diversification options through fractional ownership. 

Cryptocurrencies like Bitcoin, Ethereum, and Litecoin, which are secured via blockchain networks, have emerged as a lucrative alternative investment option as well, in the past few years and exhibited solid potential to reshape the investment landscape further. These techs and their applications have the capability to revolutionize industries beyond finance. The global cryptocurrency market cap reached $2.3 trillion in May 2021, attracting both retail and institutional investors due to increasing acceptance and institutional adoption.

As an investor, the key to unlocking blockchain’s investment potential lies in identifying the industries and companies that can benefit the most from this technology. Supply chain management, for instance, is an area where blockchain can streamline processes, improve traceability, and reduce fraud. Companies that leverage blockchain to enhance transparency and accountability in supply chains are likely to gain a competitive edge. Likewise, the healthcare industry can benefit from blockchain’s ability to securely store and share medical records, streamline insurance claims processing, and enable precision medicine initiatives. By investing in companies at the forefront of blockchain adoption in these sectors, investors can position themselves for long-term growth and profitability.

Artificial intelligence, on the other hand, is reshaping the way businesses operate and make decisions. AI technologies, such as machine learning and natural language processing, have the ability to analyse vast amounts of data, identify patterns, and make predictions with a level of accuracy and speed that surpasses human capabilities. Its enhanced risk assessment and personalized customer experience through virtual assistants is attracting investments in customer centric start-ups. Plus, AI algorithms are now able to process market data and execute trades swiftly, allowing firms to outperform traditional strategies and opening investment opportunities in algorithmic trading companies and AI-driven hedge funds. Industry data too supports these trends, with the global AI market in the financial sector expected to reach $25.7 billion by 2026, and investment in AI-powered fintech companies reaching $39.57 billion in 2020. The potential of AI to revolutionize the financial industry makes it a compelling area for investors seeking innovation and competitive advantage.

Investors looking to capitalize on AI should focus on companies that are leveraging this technology to drive innovation and gain a competitive advantage. For example, in the healthcare sector, AI can be used to improve diagnostic accuracy, develop personalized treatment plans, and enhance patient care. Owing to all these promising applications of the new tech, companies that are integrating AI into their products and services to deliver better outcomes are certainly well-positioned for growth and will allow its investors to gain a competitive edge and achieve better risk-adjusted returns.

As with any investment, however lucrative, thorough research and due diligence are essential. While blockchain and AI offer immense investment potential, it is important to approach these technologies with a discerning eye. These technologies are rapidly evolving, and new advancements can create both opportunities and risks. So go ahead and unlock the investment potential of these emerging technologies with a combination of strategic thinking, in-depth research, and a forward-looking mindset. These technologies have the potential to disrupt traditional industries and create new paradigms of value creation. Thus, as the financial industry continues to evolve, embrace these new technologies as they reshape the landscape and present unprecedented growth opportunities.



Views expressed above are the author’s own.