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2 Potentially Explosive Crypto Stocks to Buy in April
With Bitcoin With prices still above $60,000, the cryptocurrency market remains red hot despite a recent pullback. If you want to increase your exposure, you could of course buy Bitcoin or any other cryptocurrency directly.
But there are other ways to increase your exposure to cryptocurrencies, including through conventional stocks. Two crypto stocks in particular, they are poised for an explosive 2024 and beyond.
This stock bets on cryptocurrencies for the masses
Most people think PayPal (NASDAQ: PYPL) as a payments company. With over 400 million users, there’s a good chance you’ve used PayPal personally, to buy something online, or to send money to a friend or family member. This is still the company’s bread and butter. Its users rely on the company to provide a safe, secure and reliable way to make digital transactions. If something unintentional happens, like purchasing a fraudulent product or sending money to the wrong company, PayPal can step in and fix the mistake.
In 2013, PayPal made an $800 million bet by acquiring Venmo, a peer-to-peer money app. Through a smartphone, Venmo users can send and receive money from anyone in just a few clicks. The service is part of a megatrend called the democratization of finance, which allows ordinary people to have more control over their money.
PayPal’s purchase of Venmo turned out to be a terrific business decision. In 2013, Venmo users used the app to send just a few billion dollars to each other. Last quarter, however, nearly $70 billion was sent via Venmo’s platform. A growing percentage of that volume is made up of crypto payments. This is because, 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 shrunk, causing the stock to trade at a steep discount to its historical valuation. Cryptocurrencies could provide a new pillar of growth. After all, few companies have a user base of 400 million people who can seamlessly integrate into the crypto ecosystem. While it will take some time for cryptocurrencies 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 cryptocurrencies, the stock could skyrocket, especially given the depressed valuation.
PS PYPL Ratio Chart
Go all-in on the blockchain with this crypto stock
Similar to PayPal, To block (NYSE: SQ) stock is also exposed to cryptocurrency payments. Unlike PayPal, however, there are several ways to win here.
The story continues
Block has its own Venmo competitor called Cash App. The app has around 50 million users versus 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 provides similar crypto exposure to PayPal.
But Block also has many other lines of business related to cryptocurrencies. Its software divisions, TBD and Spiral, for example, create open source tools and ecosystems to accelerate the development and adoption of cryptocurrencies. Its Square platform, meanwhile, which allows merchants to adopt mobile payments quickly and easily, now accepts cryptocurrencies as a form of payment. The company’s music streaming app, Tidal, is also exposed to cryptocurrencies. Many companies have experimented with using blockchain for copyright verification and transparent payments. If this trend takes off in the music industry, Block will have a front row seat.
The best news is that, like PayPal stock, Block stock is currently on sale. Right now, shares are valued at just 2 times sales. A few years ago, its price-to-sales multiple was above 10. Recently, the company’s growth has slowed and profitability has become unreliable. But if you’re a long-term believer in cryptocurrency growth, few stocks offer as much direct exposure as Block.
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Ryan Vanzo has positions in Bitcoin. The Motley Fool has positions and recommends Bitcoin, Block and PayPal. The Motley Fool recommends the following options: Short June 2024 $67.50 PayPal Calls. The Motley Fool has a disclosure policy.
2 Potentially Explosive Crypto Stocks to Buy in April was originally published by The Motley Fool