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2 Potentially Explosive Crypto Stocks to Buy in April
With Bitcoin with prices still above $60,000, the crypto market remains red hot despite a recent pullback. If you want to increase your exposure, you can of course buy Bitcoin directly, or any other cryptocurrency for that matter.
But there are other ways to increase your exposure to cryptocurrencies, even through conventional stocks. Two crypto stocks in particular, are ready for an explosive 2024 and beyond.
This stock is betting on crypto for the masses
Most people think of PayPal (NASDAQ: PYPL) as a payments company. With over 400 million users, there’s a good chance you’ve used PayPal personally, either to buy something online or to send money to a friend or family member. It’s still the company’s bread and butter. Its users rely on the company to provide a safe, secure and reliable way to transact digitally. If something unintended happens, like purchasing a fraudulent product or sending money to the wrong company, PayPal can step in and correct the mistake.
In 2013, PayPal made an $800 million bet by acquiring Venmo, a peer-to-peer money app. Using a smartphone, Venmo users can send and receive money from anyone with just a few clicks. The service is part of a larger trend called financial democratization, which is giving everyday people more control over their money.
PayPal’s purchase of Venmo turned out to be a wonderful business decision. In 2013, Venmo users were using the app to exchange just a few billion dollars. However, last quarter, almost $70 billion was sent via the Venmo platform. A growing percentage of this volume is made up of crypto payments. Indeed, last year the company introduced crypto payments. With Venmo, anyone can now purchase and transact in a variety of cryptocurrencies, including Bitcoin.
Lately, PayPal’s traditional business has declined, leading to a steep discount to its historical valuation. Crypto could constitute a new pillar of growth. After all, few companies have a 400 million strong user base that they can seamlessly connect to the crypto ecosystem. Although it will take time for crypto to become a significant driver of PayPal’s growth, few companies in the world can match its potential. PayPal already has mass scale. If it can bridge the gap between its huge user base and the rapid rise of crypto, shares could soar, especially given falling valuations.
PS PYPL Ratio Chart
Go blockchain with this cryptocurrency stock
Similar to PayPal, Block (NYSE: SQ) also has exposure to crypto payments. However, unlike PayPal, there are multiple ways to earn here.
The story continues
Block has its own Venmo competitor called Cash App. The app has around 50 million users compared to Venmo’s around 70 million users. Like Venmo, anyone can use Cash App to buy, sell, and transact in a variety of cryptocurrencies. In this regard, Block offers similar crypto exposure to PayPal.
But Block also has several other crypto-related lines of business. Its software divisions, TBD and Spiral, for example, create open source tools and ecosystems to accelerate crypto development and adoption. Its Square platform, which allows merchants to quickly and easily adopt mobile payments, now accepts crypto as a payment method. Even the company’s music streaming app, Tidal, is exposed to crypto. Many companies have experimented with using blockchain for copyright verification and transparent payments. If this trend takes off in the music industry, Block will be at the forefront.
The best news is that, like PayPal stock, Block stock is currently on sale. Right now, shares are valued at just 2x sales. A few years ago, its price-to-sales ratio was above 10. The company’s growth has recently slowed and its profitability is no longer reliable. But if you’ve long believed in crypto’s growth, few stocks offer as much direct exposure as Block.
Where to invest $1,000 now
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Ryan Vanzo has positions in Bitcoin. The Motley Fool posts and recommends Bitcoin, Block, and PayPal. The Motley Fool recommends the following options: Short June 2024 calls at $67.50 on PayPal. The Motley Fool has a disclosure policy.
2 Potentially Explosive Crypto Stocks to Buy in April was originally published by The Motley Fool