The cryptocurrency craze is quickly becoming mainstream.
PayPal’s peer-to-peer payment service Venmo has begun enabling users to buy, sell and hold bitcoin, ethereum, litecoin and bitcoin cash, the next step in PayPal’s foray into digital assets.
But in some cases, investors may find better luck with indirect crypto plays 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 necessarily going for the mined well,” said Chantico Global founder and CEO Gina Sanchez of “Trading Nation.”
PayPal, for example, will pay “extraordinary fees” to Venmo’s move, said Sanchez, also chief market strategist at Lido Advisors.
“We have PayPal in our portfolio [at Lido Advisors]. We also have other chip names such as 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 chip shortage is easier. “
As companies embrace digital assets, companies that help 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 companies out there. Venmo gives its users access to crypto through Paxos, which happens to be a Silvergate customer. So Silvergate will benefit from this whole Venmo deal,” said Tepper.
“I really like them as a play and I think they will greatly benefit from what Venmo is doing,” he said.
As for bitcoin itself, more hype is likely to bring higher prices, Tepper said.
“What is really going to make bitcoin higher is that it is increasingly used,” he said. “If Amazon were ever to accept payments in bitcoin all of a sudden, I think bitcoin would skyrocket to over 100,000 overnight. So yeah, the more companies see it adopting and embracing it, I think the higher bitcoin goes.”
Disclosure: Lido Advisors owns shares of Nvidia and PayPal. Tepper owns shares of Silvergate Capital.
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