Keep an Eye on These 5 Crypto-Adjacent Stocks

COIN, PYPL, and RIOT are stocks adjacent to cryptocurrencies

Sep 14, 2021 at 11:35 AM
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Cryptocurrencies are regaining popularity, as a rising number of corporations and financial institutions have adopted Bitcoin (BTC), making exposure to the digital currency is easier than ever. But the best kept secret on Wall Street is this; you don't even need to actually buy, own, or sell cryptocurrency to participate. Many NYSE- and NASDAQ-listed companies are offering cryptocurrency services or investing in cryptocurrencies themselves.

Here is our list of the top five crypto adjacent stocks that traders should keep on their radar.

1. Coinbase Global Inc (NASDAQ:COIN)

Coinbase is a San Francisco-based company that provides services supporting the buying and selling of cryptocurrency all over the world. COIN is a well-known platform on which crypto traders can buy, sell, store and transfer digital currency assets. Coinbase provides services to businesses and individuals alike for access to digital currencies in more than 30 different countries around the world.

COIN offers three major cryptocurrency services at this time including Ethereum, Bitcoin, and Litecoin. In the near future, Coinbase hopes to also include other cryptocurrencies on its platform.

From a user perspective, Coinbase usage comes with a few drawbacks. While there are zero fees for depositing funds on the COIN platform, there is a fee when buying cryptocurrency on the platform and the fee schedule is different based on country of residence. Additionally, users may have to pay virtual currency transfer fees and exchange rates.At this time, Coinbase fees seem to be a bit higher than other cryptocurrency exchanges.

COIN revealed on September 9 that the U.S. Securities and Exchange Commission (SEC) delivered a Wells notice to the company, intending to sue over its product, Coinbase Lend. The interest-earning product was slated for release in the upcoming weeks, and would allow users to earn a 4% annual percentage yield in exchange for lending their crypto holdings. In response, Coinbase announced they're delaying Lend's launch until at least October. 

2. Marathon Digital Holdings (NASDAQ:MARA)

Marathon Digital Holdings is another crypto-adjacent stock and operates as a digital asset company. Marathon Digital Holdings is operated out of North America and mines cryptocurrencies in an effort to assist users in creating digital revenue. MARA aims to develop a tremendous platform for Bitcoin miners where miners can access Bitcoin without much difficulty.

MARA supplies the computing power that is required in order to mine Bitcoin. Marathon Digital Holdings provides a platform for all to mine BTC by working together in a pool. When users mine Bitcoin with other miners, the paydays are typically higher.

Marathon Digital Holdings stock's volatility is due to the volatility of Bitcoin value. The volatility of Bitcoin prices has a direct impact on the security of investing in MARA. Marathon Digital Holdings stock has seen an overall 13% decrease over the past year.

The major risk factor associated with investing in Marathon Digital Holdings stock is that the digital asset company has no established record of strong and consistent revenue growth. 

    3. Riot Blockchain Inc (NASDAQ:RIOT)

    Riot Blockchain is a digital company that is based in the United States. RIOT provides its services in America for Bitcoin mining. Riot Blockchain is linked with the Bitcoin blockchain, and the company is promoting bitcoin mining at a great level.

    RIOT recently showed deployed a hash rate power of 1.6 EH/s and is managing about 51MW of energy. An increase is expected in the hash rate to 2.51 EH/s, consuming nearly 79.5 MW of power.

    RIOT's systems works on the same mechanism of solving complex computational mathematical problems as Bitcoin requires. As any equation gets solved on a computer, hashes are generated. The miner who accurately guesses the hash gets the reward for a right guess utilizing RIOT's modern hardware for mining bitcoin.

    The downside for users of RIOT is that the rate for newly minted coins gets half of what the coins that were minted earlier received, so the reward is now half for new miners.

    4. Bit Digital Inc (NASDAQ:BTBT)

    Bit Digital is a Bitcoin mining company based in New York, and BTBT is one of the highest rated bitcoin mining companies on the market today. If you are new in the field of Bitcoin mining, Bit Digital is a great option for you to get started. Bit Digital stock is affordable and easy to access. The stock is less tied to the volatility of Bitcoin prices, providing a more secure investment in the cryptocurrency realm. The criticism for the company is due to the large amount of energy required for Bitcoin mining.

    BTBT has previously moved a lot faster than other crypto-adjacent stocks, but this can be addressed through the application of proper money management principles when investing.

      5. PayPal Holdings Inc. (NASDAQ:PYPL) and MasterCard Inc (NYSE:MA).

      Both PYPL and MA now offer consumers access to cryptocurrencies and provide related crypto services.

      MasterCard launched a partnership with blockchain technology. MA also started a program for crypto users. In order to facilitate these programs, MasterCard launched a new cryptocurrency credit card that gives easy access to cryptocurrencies for card holders.

      PayPal also announced that it would provide services for cryptocurrency fund transfers. PayPal accounts can now facilitate the buying and selling of cryptocurrency right on the PayPal platform. News broke recently that PayPal will acquire Paidy -- a Japanese buy now pay later (BNPL) company -- in a $2.7 billion mostly cash deal. 

      Disclaimer

      Purchasing cryptocurrencies comes with a number of known and unknown risks, including volatile market price swings, market manipulation, and cybersecurity risks. Cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. There is no assurance that a person who accepts a cryptocurrency as payment today will continue to do so in the future. Several federal agencies have also published advisory documents surrounding the risks of virtual currency. For more information see, the CFPB’s Consumer Advisory, the CFTC’s Customer Advisory, the SEC’s Investor Alert, and FINRA’s Investor Alert.

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