If you’ve followed recent financial news, you will attest to the increasing popularity of cryptocurrencies. Crypto coins have become a hot investment, with cryptocurrencies, such as Bitcoin surpassing $2 trillion.
Like any other investment, the sudden increase in value of these digital currencies has greatly enriched early investors, increasing the demand for cryptocurrency investments.
However, with over 11,000 types of cryptocurrencies available on the market, investing in digital technologies might be more lucrative than trying to predict which token will increase in value.
Cryptocurrencies or Crypto Stocks: Which Is a Better Investment?
Investing in crypto stocks or assets is risky, but potentially very profitable. Investing in cryptocurrencies is prudent if you want direct exposure to these digital currencies.
However, buying stocks of companies exposed to cryptocurrencies is a safer but less lucrative option.
Investing in cryptocurrencies directly is risky due to the volatility of these coins. Unlike stock exchanges, cryptocurrency exchanges are very vulnerable to hacks and other cyber security threats. These breaches have previously led to significant losses by investors, which makes storing cryptocurrencies safely more difficult than stocks.
While cryptocurrency exchanges make it easy to trade cryptocurrencies, most people don’t like keeping their digital currencies on exchange platforms due to risks such as cyberattacks. Some crypto owners prefer using offline or cold storage options, such as paper wallets or hardware.
Unfortunately, these storage options also come with several challenges. For instance, you can easily forget or lose your private key, making it impossible to access your cryptocurrencies. There is also no guarantee that your preferred crypto coins will succeed. There is stiff competition among various Blockchain projects, reducing the number of cryptocurrencies that flourish.
What Should You Invest In?
Despite these drawbacks, the Blockchain industry continues to grow stronger. The much-required financial infrastructure is being developed, and interested investors can access professional-grade services. Crypto traders have also received tools required to safeguard their assets.
Giants in the financial sector such as PayPal and Square have made it easier to trade cryptocurrencies on their platforms. Other reputable companies have invested millions of dollars in cryptocurrencies, with Tesla recently making a $1.5 billion Bitcoin purchase.
Despite the risky nature of cryptocurrency, increased adoption is a sign that the industry is maturing. Buying some cryptocurrencies can increase your investment portfolio.
However, if buying individual currencies seems risky, you should find other ways of profiting from cryptocurrencies. The best way is buying stocks of companies, such as Square, PayPal, Coinbase, or CME Group, which ease crypto trading.
While buying stocks in these companies is profitable, they don’t have the same profitability as trading cryptocurrencies directly.
6 Top Crypto Stocks To Invest In
Buying stocks in companies that invest in crypto assets is a safer way of gaining exposure to cryptocurrencies. Below are the top stocks that have created waves in the crypto market.
1. Coinbase Global
Coinbase Global is currently the leading crypto trading exchange that made its IPO debut in 2021. The company is a good choice for purchasing popular cryptocurrencies, including Bitcoin, Ethereum, Cardano, and other altcoins. Users of the platform can trade up to 50 cryptocurrencies.
The continuous increase in crypto prices is the main influencer of this platforms’ success. With millions of new users opening accounts in the platform, Coinbase earns profits by charging users a transaction fee every time they buy or sell crypto coins. However, the company also offers debit cards, which allow users to spend directly from their digital wallets.
2. Square and PayPal Holdings
Central intermediaries are at the center of most digital payments. Due to this, PayPal and Square decided to expand their money transfer business by enabling users to purchase and store cryptocurrencies in their digital wallets. Cash App, owned by Square, started facilitating Bitcoin trading in 2017. As of 2020, Bitcoin was among the leading revenue generators for the company.
Square recently introduced Square Ecosystem, which aims at making the company the leading platform for cryptocurrency transactions between customers and companies. This is very promising as it replaces the hefty foreign transaction fees banks charge. Currently, Cash App, despite being a crypto trading platform, has all the basic banking features.
On the other hand, through Venmo’s digital wallet, PayPal introduced peer-to-peer app payments, which included cryptocurrencies in 2021. During the launch, the platform supported trading of Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. Venmo is a convenient access point for buying major crypto coins and trading them for other altcoins or other decentralized currencies.
3. Nvidia and AMD
While Nvidia (chipmakers) and AMD do not handle cryptocurrencies directly, these two companies are the best designers of GPUs (Graphics Processing Units). Initially, GPUs from these companies were mainly used in powering video games that required high-end graphics.
Currently, they are also used to power computing-intensive systems, such as artificial intelligence, data centers, and crypto mining.
Blockchain and crypto mining requires robust computational power, which can best be provided by GPUs. Initially, the surging cryptocurrency prices led to an increase in Nvidia’s and AMD’s stock prices as crypto miners rushed to purchase GPUs that could handle these tasks.
To date, GPUs are important in creating and maintaining cryptocurrencies.
4. Facebook and Shopify
The popular social platform, Facebook, has been developing a Cryptocurrency called Diem. According to Facebook, Diem will facilitate global payments and provide financial infrastructure to everyone, including those without bank accounts.
However, the project experienced serious setbacks, especially after Visa, MasterCard, and PayPal, withdrew their support.
Several government agencies also expressed uncertainty, claiming that Diem is largely unregulated. Nonetheless, developers are still working on the project, with Facebook claiming renewed efforts to meet the Cryptocurrency’s development goals.
Shopify, a popular eCommerce software provider, started allowing merchants using the platform to accept Cryptocurrency payments. Shopify recently deepened this ability by adopting CoinPayments, a crypto payments processor, into the platform.
Tesla, a space and electric car company, is another company that has made significant investments in Cryptocurrency. The company recently invested an estimated $1.5 billion to purchase digital assets. That aside, the company started accepting Bitcoin payments from those who buy their electric cars in 2021.
Tesla currently owns over 42000 Bitcoins with an estimated value of $2 billion. It also periodically trades Bitcoins for profits.
6. MicroStrategy, Inc.
MicroStrategy Inc. is an intelligence and analytics company that designs, develops, and markets various business software platforms. The company creates tools that help their customers optimize their business intelligence for better marketing results.
Most clients of MicroStrategy Inc. are in the technology, insurance, manufacturing, telecommunication, and consulting sectors.
All these companies are among the key industries of the future, which is why investing in MicroStrategy makes sense. Recently, the company purchased more than $100,000 Bitcoins valued at over $3 billion. As a result, purchasing stocks from MicroStrategy is indirectly investing in crypto.
Blockchain and cryptocurrencies are bound to play a major role in the future of finance, technology, health, and many other industries. However, investing in cryptocurrencies directly isn’t prudent due to the volatile nature and insecurities associated with these digital assets.
As suggested by Wall St Now, investing in companies that benefit directly from Blockchain and cryptocurrency growth and won’t depreciate even if these cryptocurrencies fail is a wiser decision.
Apart from the companies mentioned above, you can also buy stocks from Canaan and Hut 8 Mining, RobinHood Markets, and CME Group companies.