Following the monstrous rally of bitcoin in recent days, investors are looking for tech stocks to buy that have exposure to cryptocurrencies such as Bitcoin, as well as blockchain technology. Intercontinental Exchange (ICE Stock Report) and Intel (INTC Stock Report) are two examples of tech stocks to watch for bitcoin exposure. These stocks could benefit from the rise of bitcoin whether as a financial asset or medium of transaction. There are a number of reasons for bitcoin’s rising movement in 2020. One major reason is due to the halving of bitcoin’s block rewards earlier this year. For starters, block rewards refer to the amount of bitcoin awarded to miners for providing the validity of transactions across its blockchains. By halving the block rewards, it limits the growth of bitcoin supply. Prior to a halving event, there has been a run-up in the price of bitcoin.
Another reason for the ascent of Bitcoin could be because it is deemed as a safe-haven investment in the wake of the coronavirus pandemic. Some may say its the lower use of cash gave rise to the demand for bitcoin. But many believe it has more to do with the massive money printing globally. After all, central banks could continue printing money indefinitely.
On the other hand, the number of bitcoin circulated in the network is finite. That arguably makes it a “commodity” like gold. While it’s great for existing investors to see their commodities rise in prices, there’s really not much ‘utility’ in owning these. That’s because most investors have no intention of using bitcoin or physical gold to make purchases. For this reason, instead of buying bitcoin, could these tech stocks be a smarter buy with your hard-earned money?
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The FOMO moment is back once again when the virtual currency is surging at a pace mirroring those we saw at the end of 2017. Perhaps you absolutely want exposure to the virtual currency. If so, the best way to do that might be to buy fintech darling Square (SQ Stock Report). That’s because “Cash App generated $1.63 billion of bitcoin revenue and $32 million of bitcoin gross profit during the third quarter of 2020, up approximately 11x and 15x year over year, respectively,” the publicly traded payments firm wrote in its Q3 investor letter published Thursday at the market close.
The company brought in $306 million in revenue from selling bitcoin in the Cash App. 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.”
No doubt, the coronavirus crisis has accelerated contactless payments. And in the case of Square, its Cash App has fueled considerable growth. Considering that Cash App’s monthly active users have been growing aggressively and the bullish momentum from bitcoin, would you buy SQ stock today after another strong quarter?Top Tech Stocks To Watch With Bitcoin Exposure: OverStock.com
You could say that Overstock.com (OSTK Stock Report) is one of those under the radar tech stocks in the market. Unless you are in the blockchain industry, you would probably still think that Overstock.com is an online retailer. But many believe the company is on the way to becoming a blockchain and cryptocurrency company, transforming from an online retailer. It could use its revenue from online retail to invest in the blockchain business moving forward.
“After a record-setting second quarter, we maintained our momentum, continued to outperform expectations, and grew faster than competitors in the third quarter,” said Overstock CEO Jonathan Johnson. “Our quarterly gross sales in our Retail business doubled year over year once again and new customers grew 141%. These new customers are making repeat purchases at an increasing rate. Heading into the fourth quarter, I am as confident as ever in our Retail business maintaining sustainable, profitable market share growth.”
This year, OSTK stock went up by over 1,000%, before a slight correction recently. Many investors remain keen on the growth of the company’s blockchain and crypto venture. If you are one of them, would you consider buying the dips in OSTK stocks?Top Tech Stocks To Watch With Bitcoin Exposure: PayPal
Another company with bitcoin exposure is PayPal (PYPL Stock Report). The company also said on October 21 that it launched a service enabling customers to trade cryptocurrencies directly from their PayPal accounts. It said it planned to “significantly increase cryptocurrency’s utility by making it available as a funding source for purchases at its 26 million merchants worldwide.”
No doubt, PayPal is at the forefront of digital finance. Its services range from mobile commerce to peer-to-peer transfers. And now, offering cryptocurrencies on its platform could lead to asymmetric returns. If crypto becomes fully established and regulated, PayPal could stand to benefit hugely. All these areas that the company is looking at are large markets worth over $100 trillion in total market size. PayPal’s ability to benefit from the pandemic tailwinds does not diminish its future prospects.
PayPal saw a boost of demand in electronic payments as consumers have been avoiding physical cash. That’s to curb the spread of the novel coronavirus. And this trend contributed significantly to PayPal’s business. On top of that, the company has reached record growth for new accounts this year. By introducing new services and products such as QR codes for payments, PayPal is diversifying its revenue sources. It also recently launched an installment payment program called Pay in 4, which allows customers to pay in installments, interest-free. That brings PayPal head to head with “buy now, pay later” companies like Affirm and Afterpay which have gained a lot of attention in recent years. As the top dog among fintech companies, is PYPL stock the best stock for blockchain and cryptocurrency exposure?