With Bitcoin At $51,000, Check Out These Crypto Stocks

Cryptocurrencies have seen a lot of volatility in recent weeks. Bitcoin prices have plummeted by almost 25% from their November highs to levels of about $51,000 currently, although they have recovered a bit from recent lows of about $46,000. The decline comes as the U.S. Federal Reserve turns increasingly hawkish, planning for as many as three interest rate hikes over the next year, likely making investors reduce exposure to non-productive assets such as cryptocurrency. Moreover, the recent uncertainty following the surge in Covid-19 cases worldwide, amid the spread of the more infectious omicron coronavirus variant, is also adding to the volatility.

Our theme of Cryptocurrency Stocks which includes semiconductors, payments, and brokerage companies, enables investors to gain exposure to the cryptocurrency value chain without betting on the volatile cryptocurrencies themselves. The theme remains up by about 27% year-to-date, compared to the S&P 500 which is up by about 25% over the same period. The theme has also been much less volatile over time, with average drawdowns over the last five years standing at just about -9%. Within our theme, semiconductor major Advanced Micro Devices has been the strongest performer, with its stock rising by about 57% year-to-date. On the other side, digital payments player PayPal has been the worst performer, with its stock down by about 18% year-to-date.

Below you’ll find our previous coverage of the cryptocurrency theme where you can track our view over time.

[10/15/2021] With Bitcoin At $60K, Consider These Crypto Stocks

Bitcoin prices have rallied by almost 25% over the last month, trading at about $59,600 as of late Thursday. The bellwether crypto has rallied from lows of under $30,000 in July. There are likely a couple of factors driving the recent gains. Firstly, there has been some anticipation that a Bitcoin futures ETF could be approved by the U.S. Securities and Exchange Commission shortly. Moreover, the chairman of the Federal Reserve clarified that he has no intention to ban cryptocurrencies in the U.S, easing concerns in the market following China’s recent crackdown on cryptocurrency. However, despite the recent rally, Bitcoin and other cryptocurrency assets have proved very volatile.

Investors looking to play the long-term upside in cryptocurrency adoption, without exposing themselves to the big swings in the crypto market, should take a look at our indicative theme on Cryptocurrency Stocks which includes semiconductors, payments, and brokerage companies that have exposure to the cryptocurrency value chain. The theme has gained a solid 30% year-to-date, compared to the S&P 500 which is up by about 18% over the same period. The theme has also been less volatile, with maximum drawdowns over the three years standing at just about -20%. Within the theme, graphics processor major Nvidia has fared the best, with its stock rising by 66% year-to-date. On the other hand, exchange major CME Group has been the weakest performer in our theme, rising by just about 13% over the same period.

[9/27/2021] Bitcoin Falls On China’s Crypto Crackdown. Are These Crypto Stocks Better Picks?

Bitcoin prices have declined by almost 7% since Friday, to levels of around $42,000 a unit although it recovered a bit over the weekend. The cryptocurrency also remains down by about 11% over the past month. The recent volatility comes as China’s central bank announced that all cryptocurrency transactions in the country were illegal. While a ban on crypto trading came into effect in China in 2019, it apparently continued via offshore exchanges. With the latest developments, crypto trading of all forms is likely to be shut down in China, and this likely caused liquidation of cryptos, putting pressure on prices.

While China’s crypto crackdown is a setback, it probably doesn’t change the course for the broader adoption of cryptocurrencies, which have the potential to be one of the most disruptive technologies of our time. Investors who want to play the long-term upside in cryptocurrency adoption, without exposing themselves to this sort of volatility in crypto pricing, should take a look at our indicative theme on Cryptocurrency Stocks which includes semiconductors, payments, and brokerage companies that have exposure to the cryptocurrency value chain. The theme has gained roughly 27% year-to-date, compared to the S&P 500 which is up by about 19% over the same period. Within our theme, graphics processor major Nvidia has fared the best, with its stock rising by 69% year-to-date. On the other hand, exchange major CME Group has been the worst performer in our theme, rising by just about 9% over the same period.

[8/23/2021] With Bitcoin Back At $50K, Consider These Crypto Stocks

Bitcoin prices have been on a wild ride this year. While prices for the bellwether cryptocurrency more than doubled to levels of around $65,000 between early January and mid-April 2021, driven by higher institutional interest, prices fell back to levels of just under $30,000 as of mid-July, due to China’s crackdown on Bitcoin trading and the U.S. Federal Reserve’s increasingly hawkish stance. However, the currency has recovered swiftly from the recent lows, rising by about 65% since July 20th, and trades at about $50,000 currently. The recent recovery is apparently driven by factors including short-covering, as well as signs that the U.S. SEC was increasingly open to allowing Bitcoin exchange-traded funds.

Investors who want to play the long-term gains in cryptos, without exposing themselves to the volatility and boom and bust cycles in cryptocurrency pricing, should take a look at our indicative theme on Cryptocurrency Stocks which includes semiconductors, payments, and brokerage companies that have exposure to the cryptocurrency value chain. The theme has gained roughly 24% year-to-date, compared to the S&P 500 which is up by about 19% over the same period. Within our theme, graphics processor major Nvidia has fared the best, with its stock rising by 59% year-to-date, driven by strong demand for its chips as well as its recent stock split. On the other side, exchange major CME Group has been the worst performer in our theme, rising by just about 9% over the same period.

[7/1/2021] Bitcoin Prices Crash

Bitcoin prices have crashed from levels of around $62,000 in mid-April to just about $34,000 as of Wednesday. The crypto bear market appears to be driven by a host of factors, including China’s crackdown on Bitcoin trading and mining and Tesla’s unexpected reversal of its decision on accepting the digital currency as payment for its cars. Moreover, the U.S. Federal Reserve has turned increasingly hawkish following its mid-June meeting indicating that it could start hiking interest rates from 2023, rather than 2024. This is also likely putting pressure on non-productive assets such as cryptocurrency.

Now, although the market sentiment for cryptos, in general, is clearly bearish, cryptocurrencies have the potential to be one of the most disruptive technologies of our time. Moreover, with increasing institutional interest, they appear to be here to stay as an asset class. Investors who want to play the long-term gains in cryptos, without exposing themselves to the volatility and boom and bust cycles in cryptocurrency pricing, should take a look at our indicative theme on Cryptocurrency Stocks which includes semiconductors, payments, and brokerage companies that have exposure to the cryptocurrency value chain. The theme has gained roughly 22% year-to-date, compared to the Nasdaq-100, which has returned about 15% over the same period. Within our theme, graphics processor major…