Are These The Best Cryptocurrency Stocks To Buy Right Now?
Interest in cryptocurrency is on the rise again with the Bitcoin price reaching all-time highs. When cryptocurrency stocks first made their appearance, many market watchers didn’t know what to make out of them. While some experts in the blockchain space truly understand the technology behind it, many market participants do not. And that includes Warren Buffett, who said that bitcoin was “probably rat poison squared”. Of course, Buffett is well-known for not investing in things he doesn’t understand well. No doubt, crypto is one complex technology for many to learn in-depth. The thing is, now that crypto stocks are making waves again, aren’t you curious to find out more?
Over the past few months, shares of many stocks with close ties to bitcoin and cryptocurrencies have been flying. Cryptocurrency asset manager Riot Blockchain (RIOT Stock Report) and crypto exchange Overstock.com (OSTK Stock Report) are examples of cryptocurrency stocks riding the bullish wave of bitcoins. With bitcoin prices surging over 40% last month, many investors are getting excited again. Bitcoin saw growing institutional interests such as AllianceBernstein (AB Stock Report). Besides, fintech company PayPal (PYPL Stock Report) now allows users to buy and sell cryptocurrencies on the platform.
You could say that bitcoin is a ‘commodity’ like gold. Some even say that crypto might replace gold as a store of value for people who are dubious about fiat currency. While we can’t say for sure whether crypto will replace gold, one thing that we are seeing is the increasing adoption of bitcoin to buy goods and services. Considering all these, chasing the high price tag of bitcoin need not be the game. For a start, we can look for the best stocks to buy amid surging bitcoin prices. Could the following be worth adding to your portfolio?
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Top Cryptocurrency Stocks To Watch Now: Nvidia
For starters, bitcoins were mined (obtained) through solving a computational problem that allows them to chain together blocks of transactions. The role of miners is to secure the network and to process every Bitcoin transaction. But what does it have to do with Nvidia (NVDA Stock Report) you ask? The company has been producing one of the best Graphic Processing Units (GPUs) used widely in the gaming industry. What many people may not be aware of, however, is that GPUs are also a key component used in bitcoin mining. And GPUs are able to handle large mathematical computations better than traditional processors can.
In the most recent quarter, Nvidia’s gaming segment saw a strong 37% increase in revenue year over year. The quarter saw the launch of the GeForce RTX 30 graphics cards. This is the second generation of RTX with up to 2x the performance of the previous generation. Analysts at RBC Capital Markets and Barrons estimated that Nvidia has sold more than $175 million worth of GeForce RTX 30 graphics cards to crypto miners.
Instead of going through the hassles of a hardware installation, some would suggest that cloud mining is another way to mine cryptocurrencies like Bitcoin. The thing is, there is still a need for processing units somewhere. This will continue to benefit Nvidia. Of course, GPUs are more often associated with gaming than with crypto mining. But with the Bitcoin boom, there could be additional demand for Nvidia’s hardware. With all these in mind, is NVDA stock on your watchlist this week?
Top Cryptocurrency Stocks To Watch Now: Advanced Micro Devices (AMD)
Like Nvidia, Advanced Micro Devices (AMD Stock Report) also has a stable of GPUs which can be used for crypto mining. AMD stock started the week on a strong footing, rising more than 6% on Monday’s intra-day trading. This came after the company’s chief executive said she expects continued growth in the PC market after a pandemic boom and a better-than-seasonal first quarter in 2021 for the chipmaker. The rally in AMD stock also came as Xilinx (XLNX Stock Report) jumped on Monday, rising more than 5% to new all-time highs. It’s worth noting that AMD is in the midst of a takeover of Xilinx.
“I think we see 2021 as a growth year for PCs, which perhaps we haven’t heard in a while … And more importantly, I think the product portfolio that we have is sort of very focused on some of these higher and feature sets as well, that we think will play well for our long-term share gain prospects.”– Lisa Su, CEO of AMD
Also, the company posted very impressive results in its third-quarter fiscal earnings. AMD reported revenue of $2.8 billion which is up by 56% from a year earlier. Higher revenue in its Enterprise, Computing, and Graphics segments led the growth. In addition, the company has launched its Radeon RX 6000 series in the GPU sector. This series puts the company on equal or better footing against industry leader Nvidia with its own RTX 30 series. When comparing both cards together, GPU reviewers say that AMD’s Radeon RX gives a better bang for the buck. With all these exciting developments for AMD, will you consider AMD stock to buy?
Top Cryptocurrency Stocks To Watch Now: Square
The FOMO moment is back once again when the virtual currency is surging at a pace mirroring those we saw at the end of 2017. Unlike 2017, this year saw global economic uncertainties and central bank actions which might justify the interest in bitcoin. Perhaps you absolutely want exposure to the virtual currency. If so, one of the best ways to do that might be to buy fintech darling Square (SQ Stock Report). That’s because its Cash App generated $1.63 billion of bitcoin revenue and $32 million of bitcoin gross profit during the third quarter of 2020.
“What you’re seeing now is… you really have a barbell effect between the unbanked and underbanked on one side, and traders of cryptocurrency on the other … and it’s a very potent combination.”-Mark Palmer, BTIG fintech analyst
Bitcoin-related revenue specifically has gone from $339 million during the first three-quarters of 2019 to $2.82 billion in 2020. Square was not shy about its belief in the future of the cryptocurrency. The company said that it believes “now is the right time for us to expand our largely USD-denominated balance sheet and make a meaningful investment in bitcoin. We view bitcoin as an instrument of global economic empowerment.” With increasing adoption from merchants and consumers, there remains a long runway ahead for Square. With that in mind, is SQ stock the fintech stock to buy and hold for the decade to come?