The fashion for cryptocurrencies is fast becoming a major thing.
PayPal’s peer-to-peer payment service, Venmo, has begun allowing users to buy, sell and hold bitcoins, ethereum, litecoin and bitcoin cash, the next step in PayPal’s foray into digital assets.
But in some cases, investors could find more luck with indirect cryptocurrencies than the currencies themselves, two traders told CNBC on Tuesday.
“In this case, the rush to mining, it’s better to sell picks and shovels than necessarily for the mined asset,” Gina Sanchez, founder and CEO of Chantico Global, told Trading Nation.
PayPal, on the other hand, will reduce “extraordinary fees” from Venmo’s decision, said Sanchez, also market strategist at Lido Advisors.
“We have PayPal in our wallet [at Lido Advisors]. We also own other chip names like Nvidia and Intel, “he said.” You need two things to extract Bitcoin: you need very powerful computers and you need electricity. Electricity is harder to play, but the shortage of chips is easier. “
As companies adopt digital assets, companies that help facilitate cryptographic transactions could also benefit, Mark Tepper, president and CEO of Strategic Wealth Partners, said in the same interview.
“Silvergate is a bank … that works with all the encryption companies that exist. Venmo allows its users to access encryption through Paxos, which is a Silvergate customer. Therefore, Silvergate will benefit from all of this agreement. Venmo, ”Tepper said.
“I really like it as a play and I think they will actually benefit tremendously from what Venmo is doing,” he said.
As for bitcoin itself, it’s more likely that there will be more advertising leading to higher prices, according to Tepper.
“What will really make Bitcoin rise is more and more adoption,” he said. “If Amazon suddenly accepted bitcoin payments all of a sudden, I think Bitcoin would shoot up more than 100,000 overnight. So yes, the more you see companies adopt and embrace it, I think will increase bitcoin “.
Disclosure: Lido Advisors has shares in Nvidia and PayPal. Tepper owns shares in Silvergate Capital.
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