The cryptocurrency craze is fast becoming mainstream.
PayPal’s peer-to-peer payment service Venmo has begun allowing users to buy, sell and hold bitcoin, ethereum, litecoin and bitcoin cash, the next step in PayPal’s spending on digital assets.
But in some cases, investors may be more fortunate with indirect crypto games than the currencies themselves, two traders told CNBC on Tuesday.
“In this case – the rush to mining – it’s better to sell the picks and shovels than to necessarily go for the exploited asset,” Gina Sanchez, founder and CEO of Chantico Global, said of Trading Nation. “
PayPal, for one, will pay ‘extraordinary fees’ from Venmo’s move, says Sanchez, also chief market strategist at Lido Advisors.
“We have PayPal in our portfolio [at Lido Advisors]. We also have other disk 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 shortage of chips is easier. ‘
As businesses embrace digital assets, companies that facilitate crypto-transactions can also win, said Mark Tepper, president and CEO of Strategic Wealth Partners, in the same interview.
“Silvergate is a bank … that works with all the crypto businesses out there. Venmo allows users to access crypto through Paxos, which happens to be a Silvergate customer. Silvergate will therefore benefit from this entire Venmo deal, “Tepper said.
“I really like them as a play and I think they’ll actually benefit a lot from what Venmo does,” he said.
As for bitcoin itself, more hype is likely to lead to higher prices, Tepper said.
“What’s really going to drive bitcoin higher is more and more adoption,” he said. “If Amazon were ever to suddenly accept payments in bitcoin, I think bitcoin would shoot up to over 100,000 overnight. Yes, the more you see companies accept and embrace it, I think the higher bitcoin goes.”
Disclosure: Lido Advisors owns shares of Nvidia and PayPal. Tepper owns shares in Silvergate Capital.
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