3 Top Fintech Stocks To Buy As Bitcoin Pushes Higher
Fintech stocks are growing in popularity today. Wednesday marked a major milestone in cryptocurrency history. With Bitcoin recently eclipsing $22,000 for the first time, it is renewing interests among retail investors in a way it hasn’t since Bitcoin last peaked in 2017. Sure, Bitcoin might have fallen to the wayside for some. But the increasing adoption of blockchain technologies from institutional investors and large corporations could help fuel gains in top fintech stocks in the stock market today.
The novel coronavirus helped accelerate a number of digital reforms in companies large and small. According to Microsoft’s (MSFT Stock Report) CEO, Satya Nadella, he mentioned that we have seen two years’ worth of digital transformation in two months. And guess what? Many believe blockchain technology is also undergoing such transformation. For traditional investors, buying Bitcoin directly could be a problem since it is not available on most traditional brokerages. Meaning, investors will have to buy it from a crypto exchange if they want to include bitcoin in their portfolio of assets. However, the great news is, you could also consider Grayscale Bitcoin Trust (GBTC Stock Report). Grayscale Bitcoin Trust is a financial vehicle that enables investors to trade shares in the trust which holds large pools of Bitcoin.
What Does The Increasing Adoption Of Bitcoin Mean For These Fintech Stocks?
The involvement of traditional investment banks and fintech firms looking to add cryptocurrency to their products are a few of the reasons why investors are bullish in the space right now. Recall that JP Morgan’s (JPM Stock Report) CEO Jamie Dimon once declared Bitcoin a fraud and would fire any trader trading the cryptocurrency. Today, the investment bank created its own virtual currency, also known as JPM coin, with blockchain technology. The increasing adoption of bitcoin and blockchain technologies is fueling investors’ interest to look for top fintech stocks to buy. With all that in mind, do you have these fintech stocks on your watchlist this month?
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Top Fintech Stocks To Watch As Bitcoin Pushes Higher #1: PayPal
Despite more than doubling its stock price this year, many analysts believe this could just be the start of the long term growth of PayPal (PYPL Stock Report). The company is one of the most popular online payment solutions providers in the world. PayPal announced in October that it would allow users to hold bitcoins. A survey from Mizuho Securities showed that, within one month, 17% had already used PayPal to trade cryptocurrency. With over 305 million users worldwide, that means over 50 million PayPal users have transacted in the cryptocurrency. Now, the real question here is, will PYPL stock continue to rally considering it is trading at an all-time high level? Your guess is as good as mine.
The online payment company also delivered astonishing third-quarter results. This includes a record-setting $247 billion in total payment volume, 4 billion transactions processed and revenue of $5.46 billion. Now, you may think its third-quarter results were exceptional for PayPal. And if you are an existing investor, you are going to love to hear this. Many are expecting that the current quarter will be even better. Data from the U.S. Census Bureau showed an increase in e-commerce activities by 29% in November from a year ago. Of course, that covers the Black Friday and Cyber Monday period. Therefore, we could be looking at another strong quarter for PayPal. With that in mind, is PYPL stock the best fintech stock to have in your portfolio?
Top Fintech Stocks To Watch As Bitcoin Pushes Higher #2: Square
The FOMO moment is back once again when bitcoin is surging at a stronger 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.
“We believe that Bitcoin has the potential to be a more ubiquitous currency in the future,” CFO Amrita Ahuja said in a release. “As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”
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?
Top Fintech Stocks To Watch As Bitcoin Pushes Higher #3: Visa
Visa (V Stock Report), the world’s biggest payment solutions company has seen a rise of 53% of its share price since March. Despite the setbacks of the pandemic, the global payment company has shown resilience. Its resilience can be attributed to the fact that Visa has been making huge and consistent earnings, with double-digit revenue and annualized earnings growth in the last decade. Yet, it would not be surprising if many did not realize the crypto initiatives that Visa had taken in the past year. Admittedly, these are partnerships rather than solo initiatives. Perhaps that’s why the attention has been greater on the other two fintech stocks on this list.
“We believe that digital currencies have the potential to extend the value of digital payments to a greater number of people and places. As such, we want to help shape and support the role they play in the future of money.”
What Visa has done may not be that groundbreaking. But it might actually have a better chance of getting mainstream adoption. The leading U.S. crypto exchange Coinbase will be offering a Visa debit card. Interestingly, this card allows users to spend cryptocurrency in their Coinbase accounts. What’s more, rewards will also be in the form of crypto. Visa is clearly keen on crypto, looking at its involvement with licensed and regulated digital currency platforms. Of course, this may not move Visa’s huge bottom line anytime soon. Nevertheless, having taken such steps into the crypto space, would you bet on V stock to go to the moon?