The bitcoin market has been on a downward trend over the last month. Bitcoin has dropped almost 50% from its all-time high of 46 lakhs in three months. The drop has divided investors into two camps: those who are rushing to sell to avoid losses, and those who are holding their investment with optimism for the future. To buy bitcoin with mobile money might seem like a risky task now since Bitcoin is at a low, but it might slingshot to heights it has never reached before. Despite the massive drop in Bitcoin and other major cryptocurrencies, the cryptocurrency industry is not in a terrible state.
Stocks to Watch in Cryptocurrency fall
This year, cryptocurrency values have skyrocketed. Cryptocurrency bellwether Bitcoin has almost quadrupled year-to-date to over $60k as of the end of last week, as more institutional investors warm up to the currency, and businesses like Tesla have indicated that they would accept bitcoin payments from consumers. Investing in Bitcoin and other cryptocurrencies, however, is hazardous at the moment. The economic picture is better as Covid-19 cases decrease and immunization rates in the United States rise.
Bond rates are also increasing, with the 10-year Treasury note yield climbing from about 1% early this year too close to 1.70 percent now. Given this, investors are shifting money back to real-economy sectors, and non-productive assets such as Bitcoin are expected to suffer as a result. Our speculative theme on Cryptocurrency Stocks may be a safer approach to play the long-term upside potential of cryptocurrencies without committing to specific currencies.
Customers may purchase, hold, and trade cryptocurrencies via PayPal, a major online payment processor. The business has taken this a step further, introducing its “Checkout with Crypto” service last week, allowing US clients to utilize their crypto holdings to pay at millions of online retailers across the globe.
Nvidia announced a few weeks ago that it will be releasing a GPU devoted to cryptocurrency mining. Nvidia has previously experienced gaming GPU shortages due to its gaming processors being used to mine bitcoin. The change should allow the firm to better target the crypto mining sector while possibly easing GPU shortages in gaming.
Cryptocurrency Stocks to Watch As Bitcoin Approaches $30k
Cryptocurrency values have risen dramatically this year, with Bitcoin being up over 90% since early January, selling at approximately $30k. However, Bitcoin seems to be very hazardous at the moment owing to a number of reasons. With Covid-19 instances decreasing, the economic outlook is better, and bond rates are rising as well. Given this, investors are expected to begin shifting money back to real-economy sectors, and non-productive assets such as Bitcoin, which surged during the epidemic, may suffer. Our speculative theme on Cryptocurrency Stocks may be a safer approach to play the long-term upside potential of cryptocurrencies without committing to specific currencies.
Stocks of Cryptocurrency
Due to increased retail and institutional interest, bitcoin prices have increased by more than 50% in the past month and have increased by about 4x in the last year. Having said that, Bitcoin remains a hazardous investment due to its lack of usefulness and very high volatility. Our speculative theme on Cryptocurrency Stocks – which covers semiconductor, payments, and brokerage firms with some exposure to the cryptocurrency value chain – may be a safer approach to play the crypto market than betting on individual currencies. The theme has performed well, increasing by more than 100 percent in the past year. Here’s a little additional information about the theme’s main businesses and how they have fared.
Nvidia stock gained significantly throughout 2020, due to rising demand for its GPUs from gaming consoles and data centers, as well as the company’s anticipated purchase of CPU creator ARM. The firm has said that it may resume manufacturing of specialized crypto mining GPUs, which exclude the video outputs needed for games.
Square, a payments firm, enables customers to purchase and trade bitcoin via its Cash mobile payment app. According to the business, bitcoin-related revenue increased by approximately 8x to about $2.8 billion in the first nine months of 2020.
PayPal, a major online payment processor, has also observed increased engagement on its PayPay mobile app after adding bitcoin support last October, with about half of its crypto customers using the PayPal app every day.
Bitcoin futures contracts are also available through CME Group, the world’s biggest financial derivatives market. The exchange has emerged as the world’s biggest futures market for Bitcoin, with $2.1 billion in open interest – contracts traded but not squared off – for the cryptocurrency.
How Nvidia, Square, and PayPal are Profiting from Rising Bitcoin Prices
Bitcoin prices have risen by more than 160 percent year to date, owing to a combination of factors such as increased institutional interest, moves into the crypto space by fintech companies Paypal PYPL -1.4 percent and Square, and a belief that scarce digital currency could be a hedge against inflation and a weakening US dollar. Our indicator theme on Cryptocurrency Stocks – which covers semiconductor, payments, and brokerage firms with some exposure to the cryptocurrency sector – is up a healthy 110 percent year to date, compared to the S&P 500, which is up just around 14 percent. Square, PayPal Holdings, Nvidia, and CME Group are examples of key stocks in our topic.
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