3 cryptocurrency stocks I would buy in the blink of an eye on Shiba Inu
For more than a century, no investment vehicle has delivered more impressive returns than the stock market. While stocks don’t outperform bonds, gold, or housing every year, no other asset matches the long-term average annual returns of stocks.
But over the past decade, cryptocurrencies have certainly given the stock market a hard time. A number of digital currencies have generated mind-blowing returns in a short period of time, the most recent of which is Shiba inu (CRYPTO: SHIB). Over a seven-day period, Shiba Inu gained north of 260%, as of October 8, and climbed into the top 20 of the largest cryptocurrencies by market cap.
Shiba Inu piece: All bark, no bite
As the name suggests, Shiba Inu is a digital coin inspired by the Japanese dog breed of the same name. It is also advertised as the so-called “Dogecoin (CRYPTO: DOGE) killer. ”Dogecoin was developed in 2013 as a joke that combined two of the hottest topics of the time: crypto and a Shiba Inu dog meme. But thanks to the support of Elon Musk and Mark Cuban, Dogecoin was able to build incredible momentum earlier this year that sent its token price into the stratosphere.The belief among crypto investors, at least based on what we’ve seen in recent days, is that Shiba Inu could generate the same community effect.
However, the relatively common theme for the vast majority of cryptocurrencies is that they have no competitive advantage and offer little use in the real world.
For example, it’s no secret that I’m not a fan of Dogecoin. Its transaction fees are significantly higher than most popular cryptocurrencies, and transactions on its blockchain are often processed and validated more slowly than many of its peers. If that wasn’t enough, only 1,714 companies around the world accepted Dogecoin as a payment method after eight years. This compares to 32 million businesses in the United States and over 500 million entrepreneurs worldwide. Dogecoin has almost no use outside of a cryptocurrency exchange.
But if you think it’s bad, Shiba Inu’s use case is a lot worse. Even with a market value of nearly $ 11 billion, a paltry 43 companies worldwide accept Shiba Inu as a method of payment, according to the online business directory Cryptwerk.
There is also little long-term conviction. According to the crypto exchange Coinbase, the average holding time of an investor in Shiba Inu is (drum roll) … six days.
Send Shiba Inu to the Niche and Buy This Crypto Stock Trio
Instead of putting in some hard-earned cash to work on what essentially amounts to a dart throw fueled by Elon Musk’s tweets, I would suggest buying the following trio of cryptocurrency stocks.
A cryptocurrency stock that I already own and would happily buy more in the blink of an eye on Shiba Inu is a financial technology company Square (NYSE: SQ).
For over a decade, Square’s seller ecosystem has been its foundation. The seller ecosystem provides point-of-sale devices, data analytics, loans, and other tools to merchants to help them be successful. In 2012, $ 6.5 billion in gross payment volume (GPV) passed through its platform. But in 2021, Square could reach $ 150 billion in GPVs.
While Square’s seller ecosystem has historically courted small merchants, it has also become more palatable to large businesses. In the quarter ended in June, 65% of GPV in the seller ecosystem came from companies with $ 125,000 in annualized GPV. Since most of the revenue in this segment is generated from merchant fees, larger companies are expected to drive higher sales and profits.
Where Square gets its crypto links through the peer-to-peer digital payment platform Cash App. Over a three-year period, ended December 31, 2020, the number of Monthly Active Users (MAUs) of Cash App more than quintupled from 7 million to 36 million. Likewise, the gross margin per MAU of $ 55 (as of June 2021) has more than doubled in two years.
The Cash app allows Square to generate income in a number of ways including merchant fees, bank transfers, and investments including Bitcoin trade and exchange. In the second quarter, $ 2.72 billion of Square’s $ 4.68 billion in net sales came from trading / exchanging Bitcoin.
Despite its incredible higher run, the graphics and networking company Nvidia (NASDAQ: NVDA) is another crypto stock that I would buy in the blink of an eye before putting a single penny to work on Shiba Inu.
Nvidia is best known for its GeForce graphics processing units (GPUs) used in personal computers (PCs) and for games. Between the pandemic that is increasing PC sales and the evolution of games increasing demand for high-performance GPUs, Nvidia has had little trouble growing its top segment by a healthy double-digit percentage.
This segment is also responsible for fueling the craze for cryptocurrency mining. Cryptocurrency miners are people or businesses who use powerful computers to solve complex mathematical equations. Solving these equations validates groups of transactions (called blocks) on a blockchain as true. For being the first to validate a block, the crypto miner receives a block reward in tokens from the digital currency being validated. Although crypto-focused GPUs make up a relatively small percentage of company-wide sales, miners’ appetite for GPUs is bordering on insatiable.
The other key growth segment for Nvidia is its data center platform. The company’s data center solutions are designed for high performance computing or to enhance machine learning capabilities within the data center. With more information than ever being transferred to the cloud by businesses, it makes sense that Nvidia’s GPUs are getting more support to improve server performance.
In short, this growth stock shows no sign of slowing down.
A third cryptocurrency stock that I would buy in the blink of an eye compared to the trendy Shiba Inu coin is a cloud-based e-commerce platform Shopify (NYSE: SHOP).
While most businesses struggled during the first waves of the coronavirus pandemic, Shopify found itself in the right place at the right time. Before the pandemic, businesses were already partnering with Shopify to improve their presence in online retail. But when the closures hit much of the country, demand for online retail skyrocketed. Simply put, Shopify has yet to see online retail demand decline. In the quarter ended in June, more than $ 42 billion in gross value of goods passed through its network.
What gives Shopify its crypto links is the ability for merchants to accept certain digital currencies as a form of payment, if they choose to do so. Although testing began in 2019, Shopify last year launched the option to allow merchants to adjust their settings to accept cryptocurrency. While it’s not clear to what extent this acceptance will have a tangible impact on Shopify’s growth potential in the near term, this additional choice is another feather in the cap of the leading e-commerce platform based on the cloud.
Investors should also appreciate the long-term outlook for online sales. After $ 4.28 trillion in global e-commerce sales in 2020, eMarketer projects nearly $ 6.4 trillion in online retail revenue globally by 2024. That means nearly 22% of all sales in the world will come from online purchases within a few years. Shopify is in a privileged position to benefit from this unstoppable change.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.