Bitcoin is the gift that keeps on giving. Those who had the vision to see the potential of the blockchain-powered cryptocurrency early on became multimillionaires. Even now, opportunities abound, with bitcoin tantalizingly surging to increasingly higher ground. Love it or hate it, the digitalization of money is one of the groundbreaking paradigm shifts of this century.
Bitcoin is so profound that you don’t even have to own the cryptocurrency to enjoy enormous profitability. A few months ago, I wrote that Bitcoin Investment Trust (OTCMKTS:GBTC) is one of the best stocks to buy as a Millennial. My reasoning at that time was that the digital currency’s blockchain technology eliminated the need for “third-party verification in financial transactions.” In turn, this eliminates limitations based on “time, tradition or borders.”
What I should have said was that bitcoin was among the best stocks to buy as an aging baby boomer. The reason is that bitcoin trades on a 24-hour cycle, while Wall Street is open for only six-and-a-half hours. This “accelerated” time frame is a key reason why GBTC is up 204% year-to-date. Nothing moves faster than bitcoin, and if you catch it on the right cycle, it can eliminate past investing mistakes.
Of course, many folks are naturally leery about investments with which they are not familiar. Fortunately, a number of “traditional” companies offer secondary exposure to digital currencies.
Here are three stocks to buy to leverage the bitcoin craze!
Stocks to Buy: Nvidia Corporation (NVDA)
If you love the blockchain story but just can’t see yourself putting up $2,500 for a single bitcoin, Nvidia Corporation (NASDAQ:NVDA) is a name to put on your stocks to buy list.
NVDA graphics cards, or GPUs, are incredibly popular with cryptocurrency miners. According to Engadget, “modern GPUs have enough general-purpose computing power to process money formats like Bitcoin much faster than a CPU alone.”
The problem is that standard GPUs aren’t purpose-driven for currency mining algorithms. So in response to the bitcoin craze, NVDA did what any company would do under the circumstance: create a mining-specific GPU. Nvidia rival Advanced Micro Devices, Inc. (NASDAQ:AMD) has also jumped onboard the bitcoin bandwagon. Neither companies provided official confirmation about their mining GPUs. However, the broader takeaway is that cryptocurrencies are attracting significant attention from major players.
Furthermore, it’s not even bitcoin that provides the greatest opportunity for NVDA and other semiconductors. With a market capitalization exceeding $41 billion, the king of the cryptocurrencies is difficult and economically onerous to mine. But today, hundreds of smaller digital coins are circulating across the internet. Undoubtedly, several currency miners looking to make a speculative buck will be lured by NVDA and their powerhouse GPUs.
Cryptocurrencies aren’t for everyone, but Nvidia is a proven company with exposure to an exciting growth industry.
Stocks to Buy: Zynga Inc (ZNGA)
Although the company has suffered setbacks and layoffs in prior years, it might be getting its mojo back. After three consecutive quarters of 18 million daily active users, the first quarter of 2017 saw a bump-up to 21 million users. Furthermore, ZNGA stock is up 44% YTD, making it one of the leading stocks to buy this year.
Coincidentally, bitcoin is enjoying its strongest performance in 2017. Last year, the cryptocurrency traded hands for less than $1,000. Today, it trades above $2,500 after briefly dancing with the $3,000 mark. More importantly, the enthusiasm triggered bitcoin-alternatives, such as ethereum or litecoin.
As an online business, ZNGA is incentivized to increasingly promote blockchain transactions. This opens the door to a new community of digital enthusiasts, as well as an important revenue stream. Crypto-fans have a way of spreading news quickly, which is essentially a form of free advertising.
It’s a win-win across the board, which is why ZNGA belongs on the stocks to buy list.
Stocks to Buy: PayPal Holdings Inc (PYPL)
PYPL is what I call the conservative paper-pusher’s bitcoin — and I mean that in the best way possible. I’ve long been a proponent of PayPal, having used its platform extensively for my business. Aside from that, every single metric screamed that PYPL is one of the hottest stocks to buy. In my opinion, the biggest catalyst is that society is steadily embracing the digitalization of money.
I don’t like to make grandiose statements about any company, no matter how great they are. The markets tend to punish hubris in the cruelest of manners. Nevertheless, last November, I wrote that “Investing in PYPL stock is simply gambling that the sun will rise.”
And rise it did. Since that article was published, PYPL has gained nearly 32%. Amid the cryptocurrency rally, I believe that PayPal has even more upside. A few years back, the company announced a partnership with three bitcoin-based service providers. In addition to the enormity of the deal, it critically “normalized” bitcoin as a legitimate, dollar alternative.
It’s patently evident from the cryptocurrency’s mercurial surge that people want to be paid in bitcoin. I believe that PayPal recognizes this development and will eventually integrate major digital coins into its network.
Josh Enomoto is long bitcoin and ethereum.