The cryptocurrency craze is quickly becoming mainstream.
PayPal’s peer-to-peer payment service, Venmo, enables users to buy, sell, and hold Bitcoin, Ethereum, Litecoin, and Bitcoin cash. This is the next step in the journey from PayPal to digital assets.
However, in some cases, investors might be more lucky with indirect crypto games than with the currencies themselves, two traders told CNBC on Tuesday.
“In this case – the mining rush – it is better to sell the picks and shovels than necessarily buy the extracted asset,” said Gina Sanchez, founder and CEO of Chantico Global, to Trading Nation.
On the one hand, PayPal will charge “extraordinary fees” for Venmo’s move, said Sanchez, also chief market strategist at Lido Advisors.
“We have PayPal in our portfolio [at Lido Advisors]. We also have other chip names like Nvidia and Intel, “she said.” You need two things to mine Bitcoin: you need very powerful computers, and you need electricity. Electricity is harder to play, but the lack of chips is easier. “
According to Mark Tepper, President and CEO of Strategic Wealth Partners, companies that facilitate crypto transactions could also emerge.
“Silvergate is a bank … that works with all of the crypto companies out there. Venmo allows its users to access crypto through Paxos, which happens to be a Silvergate customer. So Silvergate will benefit from this whole Venmo deal,” said Tepper.
“I really like them as a play and I think they will actually benefit tremendously from what Venmo is doing,” he said.
As for Bitcoin itself, more hype is likely to bring higher prices, Tepper said.
“What is really going to drive Bitcoin soaring is increasing adoption,” he said. “If Amazon ever suddenly started accepting payments in Bitcoin, Bitcoin would likely rise to over 100,000 overnight. Yes, the more companies accept and accept it, the higher the Bitcoin, in my opinion.”
Disclosure: Lido Advisors owns shares in Nvidia and PayPal. Tepper owns shares in Silvergate Capital.
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