Cryptocurrency stocks for investment
Digital currencies have become a large part of the most widespread and attractive investments. The digital currency markets, which were unheard of before 2012, have grown into an industry worth more than $2 trillion. This sudden rise in value and rapid development created enormous wealth for cryptocurrency investors, especially early adopters, and resulted in great interest in investing in the most profitable cryptocurrency stocks.
With over 11,000 cryptocurrencies on the market, investing in technologies that act as a gateway between the blockchain cyberspace and our physical society may be more lucrative than trying to guess which currency will replace Bitcoin or Ethereum in the future.
Digital currency companies
The original idea behind blockchain technology was to create an efficient and decentralized electronic cash payment system via peer-to-peer technology.
Investors can invest in cryptocurrencies themselves by purchasing a mixture of different cryptocurrencies, but the best way to enter this sector is to invest in the name of cryptocurrency companies. Companies that adopt blockchain technology can gain a significant advantage over their traditional competitors in payment processing, in addition to that brokers offering digital assets can attract more customers than exchanges that only offer traditional assets such as stocks and bonds.
In line with this logic, here are some of the best cryptocurrency stocks to consider:
1- Coinbase Global
Coinbase Global debuted its IPO in April 2021, and ranks as the largest cryptocurrency stock exchange. Coinbase Global allows users to trade more than 50 altcoins in addition to major currencies such as Bitcoin, Ethereum, and Cardano.
The success of this trading platform depends on the increase in the price of cryptocurrencies, with Coinbase earning a small transaction fee each time someone places an order to buy or sell a cryptocurrency. But the company’s ambition exceeded all expectations, as it sponsors a debit card that allows consumers to spend from the balance of their digital wallet, in addition to launching a cloud platform for companies that use and store digital currencies.
Coinbase introduced two game-changing innovations. The first is to allow the practice of asset loans that used to be reserved for wealthy investors only. It has become possible for users to pledge their digital currencies as collateral on the platform and obtain a low-interest loan to cover their daily expenses. The second is the increasing adoption of Coinbase’s blockchain analytics by governments and financial institutions. Let’s say that hackers have managed to break into an individual’s computer and demand a ransom in the form of cryptocurrency to unlock the device. In this case, Coinbase can match the hacker’s wallet address to the data stored on its platform. This could help track money flows, catch cybercriminals, and build greater confidence in the cryptocurrency space.
2- Square and PayPal Holdings
The core of every digital payment protocol lies in the absence of central intermediaries, which made the second step of Square and PayPal Holdings’ business expansion scheme to enable users to buy and hold currencies within a digital wallet.
The company promotes the use of cryptocurrency by users through the Square ecosystem, and has the potential to become a leading platform for cryptocurrency transaction between businesses and customers. This may lead to diverting the course of international transactions from traditional transactions to digital ones, as banks often charge exorbitant fees for foreign currency exchange.
Square is somewhat similar to PayPal’s Venmo digital wallet and peer-to-peer payment apps in general, as it also supports trading in Bitcoin, Ethereum, and Litecoin. Venmo has a lot of potential to become a leading cryptocurrency platform with its new feature. This serves as a powerful access point for investors who want to invest in major cryptocurrencies and then use them to purchase the rest of the altcoins or access decentralized finance applications.
3- Canaan and Hut 8 Mining
Cryptocurrency mining has changed dramatically over the past few years. Companies such as Canaan have designed high-power integrated circuits designed to guess the correct network passcode. Avalon ASICs, the new update to Canaan, can make tens of trillions of guesses every second regarding the correct hash to validate blocks on the Bitcoin network, which is millions of times more powerful than AMD and Nvidia.
It is not possible to talk about mining without mentioning Hut 8 Mining which is one of the most popular cryptocurrency mining stocks. The company owns a significant minority stake in the overall Bitcoin network and generates very strong cash flow compared to revenue. This company does not work on the principle of selling the currencies that are mined in the market, but rather it aspires to increase the returns of the shareholders by lending them, which leads to multiplying returns. Hut 8 Mining uses a combination of wind, solar and natural gas sources to generate electricity, ensuring the sustainability of its operations.
4- Nvidia and AMD
Nvidia and AMD are the leading designers of graphics processing units (GPUs) famous for powering high-end video game graphics as well as compute-intensive applications such as data centers, artificial intelligence, cryptocurrency creation, and blockchain that require massive computational power.
Booming cryptocurrency prices in 2018 were a driving force for Nvidia and AMD stock prices soaring as miners rushed to buy GPUs that are an essential part of cryptocurrency creation and management hardware.
Nvidia and AMD recently announced their acquisition of ARM Holdings and Xilinx, which is likely to cement their positions as leaders in this field. And this is only a starting point for them in the journey of monopolizing this industry and developing more emerging technologies such as blockchain.
5- Facebook and Shopify
Facebook has long been developing a new cryptocurrency called Diem, which is portrayed as a global financial payment platform and infrastructure that is accessible to everyone including the unbanked. The project faced some setbacks including the loss of Visa, Mastercard and PayPal from the consortium of prominent members, as well as government regulators expressing skepticism about Diem due to its lack of regulation. But this did not discourage Facebook from continuing to renew and intensify its efforts in order to achieve its development goals.
Shopify allows merchants to use its platform to accept cryptocurrency as a method of payment, and it recently enhanced this ability by integrating it with cryptocurrency payment processor CoinPayments. Facebook Stores has been announced as a new e-commerce offering for small businesses, with Shopify as the third-party software provider powering the new online stores in spring 2020.
6- Robinhood Markets
Robinhood Markets is a popular discount brokerage app that allows users to buy stocks, rare metals, and digital currencies. Investors can buy and sell Bitcoin, Ethereum, and Dogecoin without commission on the platform 24/7. The company holds tens of billions of crypto assets under custody, with cryptocurrency trading revenue now making up a large portion of total sales.
Robinhood can combine its commission-free model with an increased number of cryptocurrencies on the platform, thus gaining a massive competitive advantage over both traditional and decentralized exchanges. Moreover, the company could offer the same crypto analytics services as Coinbase to further boost confidence in the sector and boost its adoption.
7- CME Group
The CME Group operates the largest financial derivatives exchange in the world, allowing investors to trade futures contracts and betting on the future prices of assets, in addition to giving investors the option to buy or sell an asset in the future at a predetermined price. The CME Group exchange trades a variety of assets including agricultural products, mining, energy, and cryptocurrency stocks.
CME created the first cryptocurrency futures market at the end of 2017, the company created a bitcoin futures market at the beginning of 2020, and expanded to include Ethereum as well in February 2021, giving both of them some additional legitimacy and a way to help cryptocurrency owners mitigate risks from Sudden changes in digital currency prices.
Summary
Cryptocurrency stocks give their holders the bonus of broad diversification. We cannot deny the volatile nature of digital currencies, which greatly affects the revenues and profits of companies related to this sector, but this does not negate the widespread and rapid adoption of the crypto world. The second largest mortgage lender in the United States of America United Wholesale Mortgage announced in August 2021 that it will accept Bitcoin as mortgage payments from its customers, and this is only the beginning, we expect more momentum in cryptocurrency stocks as more and more companies join the blockchain revolution.
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