Investing in Cryptocurrency StocksJune 5, 2021
As you probably know, cryptocurrency stocks are linked to the broader cryptocurrency market. Some of these stocks outperform the market, while others may be more specialized. For instance, the Greenidge Generation mining operation might be a cheap stock, while the CEO of Coinbase may become the next Jeff Bezos. These stocks can be a great way to gain exposure to the growing cryptocurrency market, as they have been in the news recently.
Cryptocurrency is a form of digital file secured by cryptographic technology. This makes it impossible for others to duplicate or change it without the owner’s permission. These assets are not sold on a traditional stock exchange, but on crypto exchanges. These exchanges choose which assets to list. Certain cryptocurrencies give their users a stake in the network’s governing power. The process of issuing these digital assets is more technical than regulatory.
Bitcoin mining stocks are the best places to get exposure to the industry. Many investors are betting on the growing potential of blockchain technology. The best time to buy bitcoin stocks is now, because these are among the most volatile and unpredictable investments. You can buy bitcoin and other crypto stocks at reasonable prices and get exposure to a growing market. However, you can also make a profit by selling outright. But remember, cryptocurrency stocks may not be the best choice for every investor. For example, Ebang is a Chinese company that makes crypto mining equipment and chips. However, it is still worth mentioning that Ebang’s stock price suffered in the recent months after the Chinese government pooh-poohed the industry. However, as of December 2021, Ebang had a market cap of $243 million.
The biggest loss in Bitcoin’s value was last month, as the price of Bitcoin plunged from a mid-April high to a low of $30,000, dragging down other cryptocurrencies with it. Bitcoin rebounded slightly and hovers around $30,000, while other crypto assets like Ether, Cardano, and Polkadot have been underperforming. All of these losses have brought back the excitement for retail investors. Even with these losses, the market remains relatively high, with bitcoin having a market capitalization of more than $570 billion.
The market for cryptocurrencies is extremely volatile, which means that they come with greater risks than most other assets. The most popular cryptocurrency, Bitcoin, hit an all-time high of $68,000. As of first quarter 2022, the price of the cryptocurrency is trading around $30,000, which is still significantly below its 2021 average of $47,300. This volatility has made investing in cryptocurrencies like Bitcoin stocks a great way to manage your risks while still earning a handsome profit.
While Nvidia may be a good pick right now, it hasn’t reached that price yet, and the cyclical nature of the cryptocurrency market means further weakness is inevitable. While $410 for Nvidia isn’t out of the question, it’s unlikely to happen within the next twelve months. Coinbase Global, a leading crypto-exchange and ecosystem, is another stock that might be worth buying. According to BTIG analyst Mark Palmer, the stock could reach $380 per share, which would be a quintuple of its current value.