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3 Stocks to Ride Bitcoin's Record-Breaking Start to 2021

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Bitcoin of late has climbed north to a new record high despite choppy trading sessions at the start of the year. Per data from Coin Metrics, as quoted in a CNBC article, the price of the top crypto crossed the coveted $35,000 mark on Tuesday night, touching an intraday high of $35,821.

Bitcoin did pare some gains on Wednesday but anyhow its latest rally indicated that institutional investors still have great interest in the world’s largest cryptocurrency. Lest we forget, institutional investors didn’t ignore the space last year as well.

Per the CNBC article, bitcoin surged more than 300% last year to reach at levels above $29,000. Interestingly, the article stated that JPMorgan Chase & Co.(JPM - Free Report) recently said that the long-term price of bitcoin may climb to $146,000 as the cryptocurrency tries to win against gold as an “alternative” currency. Gold prices, by the way, also notched sizeable gains last year.

Nevertheless, head of research at Blockchain.com, Garrick Hileman, as mentioned in a businessinsider article, recently said that the bitcoin market may touch $1 trillion this year as top hedge fund and money managers have now started to consider it as a reserve asset.

In fact, Garrick Hileman went on to say that some of the top institutional players like Jack Dorsey, BlackRock, Bill Miller and Stanley Druckenmiller have now begun to consider bitcoin’s reserve currency status more seriously. Notably, some of the market pundits believe that bitcoin should provide a hedge against the recent weakness in the dollar and may also provide a cushion against any inflation-related risks.

What’s more, many payment companies including Square, Inc. (SQ - Free Report) and PayPal Holdings, Inc. (PYPL - Free Report) now have bitcoin as part of their balance sheet reserves. This in turn should egg on retail investors to take a keen interest in bitcoin, resulting in an uptick in demand for the cryptocurrency. It’s also worth pointing out that retail investors for quite some time had actually restrained from being part of the volatile bitcoin market amid the coronavirus pandemic.

By the way, things are even looking brighter for bitcoin as people across the world have now started to embrace blockchain technology, and the cryptocurrency is dependent on such technology. Blockchains have come a long way in a short period of time and are now being utilized in a number of ways, and their demand is only expected to perk up in the near term.

3 Stocks to Make the Most of the Bitcoin Boom

With bitcoin touching new highs, with many more expected to come in the near future, it’s imperative to watch out for stocks that can tap the rising bitcoin trend. Such companies are now set to make the most of the uptick in the value of the cryptocurrency as well as the technology that supports it, such as blockchain. Let us, now, look at three such stocks –

PayPal is now part of the cryptocurrency market after it said that its customers will be able to purchase and sell bitcoin by using their PayPal accounts. The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for its current-year earnings has risen0.2% over the past 60 days. The company’s expected earnings growth rate for the current year is a solid 18.7%. What’s more, the company’s expected earnings growth rate for the next five-year period is 20.9%.

Microsoft Corporation (MSFT - Free Report) time and again has been facing serious competition from rivals likeAmazon.com, Inc. (AMZN - Free Report) in the cloud computing space. As a result, Microsoft has introduced Azure blockchain service, which is expected to lend the tech behemoth an edge over competitors.

The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings has moved up5.3% over the past 90 days. The company’s expected earnings growth rate for the current year is a superb16.8%. Additionally, the company’s expected earnings growth rate for the next five-year period is 13.2%.

JPMorgan’s CEO Jamie Dimon hasn’t been particularly supportive of bitcoin trading. But still, he has been supportive of at least blockchain technology and the investment bank in fact has created its own cryptocurrency, JPM Coin. Nonetheless, the bank is now currently relying heavily on blockchain technology to minimize the time needed to verify global payments.

The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has climbed7.3% over the past 60 days. The company’s expected earnings growth rate for the current quarter is a whopping 203.9%. To top it, the company’s expected earnings growth rate for the next five-year period is 5%.

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