These companies offer an attractive way to gain exposure to cryptocurrencies through equities and could be poised for strong outperformance in the com…
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This story originally appeared on MarketBeat
Although cryptocurrencies such as Bitcoin have taken investors on a wild ride in 2021, these intriguing digital assets continue to attract attention and have been recovering nicely from the large sell-off from earlier this year. Bitcoin, in particular, has been looking better in recent weeks as it rallied above the $40,000 mark and is close to reclaiming its 200-day moving average. This could lead to more upside for companies with bitcoin exposure, as they tend to trade in tandem with the price action of the leading cryptocurrencies.
While some traders might be hesitant to increase their exposure to cryptocurrencies at this time given the potential for crypto tax amendments in the upcoming U.S. infrastructure bill, the way that many of the most popular crypto stocks are performing in the market could help to ease those concerns. These companies offer an attractive way to gain exposure to cryptocurrencies through equities and could be poised for strong outperformance in the coming weeks.
That’s why we’ve put together a quick list of 3 crypto stocks for bitcoin bulls to buy now. Keep reading below to learn more.
First, we have Coinbase, a name that likely needs no introduction for investors that are familiar with cryptocurrencies. As the largest cryptocurrency exchange in the United States, this is a company that is a true powerhouse in the industry and has plenty of growth potential as digital currencies continue to gain traction in the financial world. What’s interesting here is that Coinbase generates transaction revenue and fees every time a user invests, spends, sends, or receives crypto assets on its platform. That means as trading volume increases so does the company’s revenue, which is why it’s such an intriguing stock for bitcoin bulls.
If you didn’t purchase Coinbase after its high-profile IPO, now might be a good time to add shares as the stock appears to have bottomed in May and is currently breaking out of its post-IPO base. There’s also a lot to like about the company’s upside potential if it can diversify its revenue and create more offerings for institutional investors. Coinbase will deliver its eagerly anticipated Q2 earnings results on August 10th, which could be another strong catalyst for the stock to look out for.
Silvergate Capital Corp (NYSE:SI)
Cryptocurrencies are fascinating because they are literally creating an entirely new financial ecosystem. That’s a strong reason to consider Silvergate Capital stock, as it’s the leading provider of innovative financial infrastructure solutions and services in the digital currency industry. The company has designed the Silvergate Exchange Network, which is a network of digital currency exchanges and digital currency investors that enables the movement of cryptocurrencies like Bitcoin and can clear transactions in U.S. dollars.
If you are bullish on the prospects of Bitcoin and believe that institutional demand for cryptocurrencies is only going to increase in the future, it makes a lot of sense to add shares of this company. With 771 institutional customers and counting, Silvergate’s network is growing fast and attracting plenty of new clients. Keep in mind that as deposits grow, the company will benefit from more interest income and revenue over the long term. In Q2, Silvergate Capital reported a net income of $20.9 million, up 64.5% year-over-year, and accepted an impressive $4.3 billion in new deposits. The Silvergate Exchange Network also handled $239.6 billion in U.S. dollar transfers in Q2, up 44% year-over-year, and is confirmation that the company is experiencing record volumes at this time.
I’ve previously mentioned why Square is a great fintech stock to own for the long-term, which includes the company’s strategic move into traditional banking services, tons of momentum with the company’s Cash App service, and big upside if it can expand internationally. However, another strong reason to consider adding shares, particularly if you are a bitcoin bull, is the fact that Square has invested significant capital in bitcoin and is one of the first major public companies to hold the cryptocurrency on its balance sheet. Square CEO Jack Dorsey is one of the most prominent bitcoin bulls, and his actions speak volumes about how big of a role the company could eventually play in the crypto economy.
There’s a lot to like about how Square allows customers to send and receive bitcoin on its Cash App without paying any transaction fees, which is certainly appealing to retail crypto enthusiasts. The company also generated $2.72 billion in Bitcoin revenue in Q2, up about 3x year-over-year, and continues to make exciting new moves to expand its product portfolio. With the stock trading right around all-time highs, Square could be a great way to play both the crypto rally and the rise of decentralized finance.