Cryptocurrencies have been on a wild ride so far this year.
Bitcoin started 2021 at just over $29,000, rose as high as $64,829 just last week before sinking to $52,985 at the time of this writing on Thursday. All-in-all, the world’s largest digital coin is up 86% year-to-date.
The second largest coin, ether, popped above $2,000 at the beginning of April and now sits at $2,548, up more than 248% since the start of 2021. Even Dogecoin, the cryptocurrency started as a joke back in 2013, has seen massive gains – rising 6,170% since January 1.
And as cryptos have risen, they’ve gone more mainstream.
Coinbase (NASDAQ: COIN), the most popular cryptocurrency exchange in the U.S., went public last week. Morgan Stanley’s (NYSE: MS) new bitcoin-only private fund raised $29.4 million from 322 investors in just its first 14 days. PayPal’s (NASDAQ: PYPL) Venmo app now allows customers to buy, sell, and hold digital coins, including bitcoin, ether, litecoin, and bitcoin cash.
But even with the institutional buy-in, cryptos are still volatile and some investors may find better luck investing indirectly with stocks that have exposure to cryptos but with more stability than the currencies themselves.
PayPal is one option. Chantico Global CEO and Lido Advisors chief market strategist Gina Sanchez said the company stands to make “extraordinary fees” off the move to allow Venmo’s 70 million+ users access to cryptos.
“We own PayPal in our portfolio [at Lido Advisors],” Sanchez added. “We also own other chip names like Nvidia (NASDAQ: NVDA) and Intel (NASDAQ: INTC). You need two things to mine bitcoin: you need very powerful computers and you need electricity. Electricity’s harder to play, but the chip shortage is easier.”
Strategic Wealth Partners’ Mark Tepper has another stock in mind, one that helps companies facilitate crypto transactions.
“Silvergate (NYSE: SI) is a bank… that works with all the crypto companies out there,” Tepper, the firm’s president and CEO, said. “Venmo’s allowing its users to access crypto through Paxos, which happens to be a Silvergate customer. So Silvergate’s going to benefit from this whole Venmo deal.”
“I really like them as a play and I think they’re actually going to benefit tremendously from what Venmo’s doing,” Tepper added.