Of Bitcoin While prices are 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 crypto, even through conventional stocks. Two crypto stocks in particular are primed for an explosive 2024 and beyond.
This stock is betting on crypto for the masses
Most people think about PayPal (NASDAQ:PYPL) as a payment company. With over 400 million users, chances are you’ve used PayPal personally, to buy something online or to send money to a friend or family member. This is still the bread and butter of the company. Users trust the company to provide a safe, secure and reliable way to transact digitally. If something unintentional happens, such as 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. Through a smartphone, Venmo users can send and receive money from anyone with just a few clicks. The service is part of a megatrend called the democratization of finance, giving ordinary people more control over their money.
PayPal’s purchase of Venmo turned out to be a great business decision. In 2013, Venmo users used the app to send just a few billion dollars between themselves. However, last quarter, nearly $70 billion was sent through the Venmo platform. A growing percentage of that volume consists of crypto payments. That’s because the company introduced crypto payments last year. With Venmo, anyone can now purchase and transact in various cryptocurrencies, including Bitcoin.
Lately, PayPal’s traditional business has shrunk, leaving its shares trading at a deep discount to their historical valuation. Crypto could provide a new pillar of growth. After all, few companies have an existing user base of 400 million people that they can seamlessly connect to the crypto ecosystem. While it will take some time for crypto to become a meaningful driver of PayPal’s growth, few companies in the world can match its potential. PayPal already has massive scale. If it can bridge the gap between its massive user base and crypto’s meteoric rise, its shares could rise, especially given its low valuation.
Go all-in on blockchain with this crypto stock
similar to PayPal, Block (NYSE: SQ) stocks also have exposure to crypto payments. However, unlike PayPal, there are multiple ways to win here.
Block has its own Venmo competitor called Cash App. The app has about 50 million users, compared to Venmo’s about 70 million users. Just like Venmo, anyone can use Cash App to buy, sell, and transact various cryptocurrencies. In this regard, Block offers similar crypto exposure to PayPal.
But Block has several more also crypto-related business units. For example, its software divisions, TBD and Spiral, are building open-source tools and ecosystems to accelerate crypto development and adoption. The Square platform, which allows merchants to quickly and easily adopt mobile payments, now accepts crypto as a form of payment. 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 have a front row seat.
The best news is that Block stock, like PayPal stock, is currently on sale. Currently, shares are valued at just 2 times sales. A few years ago, the price-to-sales ratio was above 10. The company’s growth has slowed recently, making profitability unreliable. But if you believe in the long-term growth of crypto, few stocks offer as much direct exposure as Block.
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Ryan Vanzo has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin, Block, and PayPal. The Motley Fool recommends the following options: June 2024 short calls of $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
