Investing in cryptocurrency and blockchain-related projects does not necessarily mean investors have to buy the actual coin or token associated with a digital asset platform. It’s also possible to become an active investor in the crypto space by purchasing stocks of companies that have made substantial investments in the digital currency ecosystem.
Jack Dorsey’s Square Recorded 68% Year-Over-Year Gains
Square (NYSE:SQ), a company focused on payment processing and owned by Jack Dorsey, the billionaire co-founder and CEO of Twitter, has invested heavily in the cryptoasset industry. Dorsey’s Square received a BitLicense (in June 2018) from New York State’s Department of Financial Services (NYDFS). This was required before Square could offer bitcoin (BTC) trading services (by using the “Cash” app) to New York residents, one of the most tightly regulated jurisdictions in the world.
Although Square’s revenue from BTC trading was only a modest $43 million during Q3 2018, the company offers many other services. These include being a lender to small and medium sized firms (SMEs) and a person-to-person payments facilitator. Notably, Square’s adjusted year-over-year revenue increased by a sizable 68% in the last reported quarter. The company’s services and subscription-based earnings also increased by 155%.
Nvidia Shares May Perform Well, Despite Crypto Bear Market
Nvidia (NASDAQ:NVDA), the California-based manufacturer of high-end GPUs, has seen its share prices surge over the years because of high demand for its graphics cards in the multi-billion dollar PC gaming industry. Data centers throughout the world also use microchips developed by Nvidia, which has helped drive the multinational firm’s stock prices even higher.
Compared to all the other sectors that use Nvidia’s products, the company’s revenue from the sale of GPUs used in mining digital currencies has fallen sharply. This is largely due to the declining prices of cryptoassets, however Nvidia’s earnings from the mining sector could potentially increase if/when the bull market returns. For now though, investing in Nvidia might still be profitable given that the firm’s GPUs are used by many different business sectors.
Goldman Sachs May Be A Safe Bet
Goldman Sachs (NYSE:GS), a New York-based multinational investment bank with over $900 billion in total assets, invested a large amount of startup capital into Circle Internet Financial (in 2015). Circle’s main service, Circle Pay, allows users to send and receive payments using blockchain technology. The fintech firm has also launched a product called Circle Invest, which makes it easier for people to trade and invest in digital currencies.
Although Goldman Sachs shelved its plans earlier this year to launch a cryptocurrency trading desk, citing regulatory uncertainty as the primary reason for not launching an exchange, the giant Wall Street bank has not backed off entirely from the crypto space. In fact, Goldman Sachs invested in digital asset custodian, BitGo (in October 2018). According to the announcement’s press release, BitGo Holdings received a total $58.5 million in investments in the Series B funding round, led by Goldman Sachs’ Principal Strategic Investments group and Galaxy Digital Ventures LLC, a VC firm founded by Michael Novogratz (a former partner at Goldman Sachs).
Diversifying Your Investment Portfolio
Purchasing shares of Nvidia, Circle, and Goldman Sachs may not be considered direct investments in cryptocurrencies. However, investors who hold shares in these companies can expect to potentially profit from the strategic investments these organizations have made in the cryptoasset sector.
It’s also possible that the share prices of these companies will increase even as digital currency prices continue to drop sharply.