Ethereum, Litecoin, and Ripple’s XRP – Daily Tech Analysis – January 30th, 2021
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A few months ago, I began prodding around the idea of, “What are the future FAANG stocks?” We’ve seen Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and other tech stocks swell from modest winners to worldwide behemoths. These stocks went from $100 billion to $1 trillion in market capitalization. So many people talk about what it would be like if we had bought Apple in the 1980s or Amazon in 1999. While anyone who did and was able to hold on until now is ridiculously rich, they also sat through a ton of volatility. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Further, investors could have waited until after Apple’s iPhone moment or Amazon’s clear dominance of e-commerce and still made a 10x or more return on their investment. Don’t believe me? Apple is up over 1,000% over the past decade, while Amazon is up 1,760%. Over just the last five years — when it was absurdly clear these two were established leaders — Apple and Amazon are up 463% and 442%, respectively. That led me to ponder, what are the next tech stocks that could become new FAANG leaders? Specifically, I am looking for companies in the $50 billion to $300 billion market cap range that can go to $400 billion to $1 trillion or more. It’s an admittedly wide range, but who cares — these winners are right under our noses. Let’s look at seven tech stocks: 7 Safe Stocks to Buy for Solid Returns in Tumultuous Times PayPal (NASDAQ:PYPL) Salesforce (NYSE:CRM) Nvidia (NASDAQ:NVDA) Advanced Micro Devices (NASDAQ:AMD) Roku (NASDAQ:ROKU) Shopify (NYSE:SHOP) Adobe Systems (NASDAQ:ADBE) Tech Stocks to Buy for Future Gains: PayPal (PYPL) Source: JHVEPhoto / Shutterstock.com Current Market Cap: $295 billion Many investors have continued to underestimate PayPal. When it comes to FAANG tech stocks in their younger years, that seems to be a staple observation of them as well. However, PayPal has found a way to become a payment juggernaut. While sending money to friends and family is free and convenient, that’s simply one part of the ecosystem. The company also makes a sliver of sales when involving another business or merchant. It’s become a safe, trusted and convenient way for businesses to sell online or to make subscriptions a piece of cake. PayPal’s acquisition of Venmo and Honey have only added to those layers of engagement, while e-commerce will continue to be the main catalyst behind its growth. For those looking at tech stocks, the power and trend of e-commerce doesn’t need to be explained. Lastly, PayPal’s now in the cryptocurrency game, allowing customers to buy and sell Bitcoin, Bitcoin Cash, Etherium and Litecoin. Maybe PayPal won’t be able to collect its current “fee” — read: commission — on these transactions forever, based on how stock commissions vanished almost overnight in the brokerage industry. However, for now it should act as an additional growth catalyst. Bonus: At a $100 billion market cap, Square (NYSE:SQ) could also be a consideration as a member of new FAANG tech stocks in this respect. Salesforce (CRM) Source: Bjorn Bakstad / Shutterstock.com Current Market Cap: $206 billion. It should go without saying that given the massive gains the stock market has registered over the past nine months, the ideal scenario would be a sizable correction for several of the stocks on this list. However, that doesn’t apply to all of them. Take Salesforce for example. This company keeps on printing money as revenue continues to chug higher. For all the doubt that Salesforce has endured over the years, it has done quite well. It doesn’t seem like management plans on stopping, either. For instance, management is looking to generate $60 billion in revenue by 2034. Most recently, it aims to scoop up Slack (NYSE:WORK), growing its workstation presence and scaling up its fight against Microsoft (NASDAQ:MSFT). 8 Cheap Stocks to Buy With Your Next Stimulus Check As we are talking about pullbacks, Salesforce is a great example. At the recent low, shares were 25% off the highs. That seems like a great opportunity for a company that continually sports 20%-plus revenue growth. Nvidia (NVDA) Source: Sundry Photography / Shutterstock.com Current Market Cap: $335 billion Admittedly a bit larger than what we were looking for, Nvidia needs to be included on this list. Almost every major technological trend is growing in demand. More internet traffic is creating strain in the cloud, increasing demand for edge-cloud computing. More data is creating more need for datacenters. Increasing self-driving vehicle capabilities demand more computing power. Better computers demand better graphics. The list goes on and on and Nvidia is there at every turn. The company’s products cater to multiple end markets with impressive secular growth. That’s why, despite the pandemic, Nvidia saw such an extreme acceleration in both earnings and revenue. Its savvy M&A strategy has allowed it to add high-quality names like Mellanox at reasonable valuations. Now Nvidia is going after Arm, a massive $40 billion deal. Nvidia is already nearing an unstoppable state, but with Arm it would be a juggernaut. From a pure antitrust perspective, Nvidia should be fine. However, this “juggernaut” position might cause some hiccups. Either way, this is a high-quality name that will only grow in size over time. Advanced Micro Devices (AMD) Source: Sundry Photography / Shutterstock.com Current Market Cap: $111.5 billion For Nvidia’s smaller sibling, we have Advanced Micro Devices. At about one-third the size, AMD has quickly climbed the ladder while drastically improving its financials. CEO Lisa Su has orchestrated one of the most impressive comeback stories in the stock market. Once left for dead, AMD was trading firmly below the $2 mark in 2016. Now sporting a 52-week high of $99-and-change, the leadership has been stellar. Like Nvidia, AMD is situated in multiple secular growth themes as rising demand in technology results in rising demand for AMD. Also like Nvidia, AMD saw a massive rise in revenue and profit during the pandemic. In one last final comparison to Nvidia, AMD is also working to close a large acquisition. In October, the company agreed to acquire Xilinx for $35 billion. 9 Stocks Selling at a Discount Right Now While it would require years worth of more growth, it’s not hard to imagine AMD growing to the size of Nvidia ($300 billion). Eventually clearing this level could put it on the lower end of the FAANG status in terms of its size. Roku (ROKU) Source: jejim / Shutterstock.com Current Market Cap: $53 billion Roku is a tough one, because it’s certainly the smallest name on this list (by a lot) and it just went on a massive rally. Shares are up 90% over the past three months, as Roku has climbed from a market cap of just $28 billion to where it is today. Additionally, investors just don’t understand this company. They still think it’s going head-to-head with Amazon with its stick players. While that’s kind of true, the story behind Roku isn’t the hardware — it’s the platform. Roku doesn’t care if it’s making money on the hardware. Instead, its focus is on the platform, where it collects fees from content providers and on ad revenue from its free Roku channel. In that respect, growth continues to explode. Analysts expect roughly 50% revenue growth this year, followed by 40% growth in 2021 and 36% growth in 2022. Respectfully, I believe that may be conservative. Bulls will acknowledge that a pullback may be in order (and a potentially large one at that). However, I don’t think the top is in for Roku. For AMD I mentioned the “lower end of the FAANG status,” which would be Netflix (NASDAQ:NFLX). Currently, that’s a $250 billion market cap and remember, NFLX is at a new high. I could see a scenario where Roku pulls back 20% to 25% — giving it a roughly $40 billion market cap — and ultimately roaring on to a $200-plus billion entity. Shopify (SHOP) Source: justplay1412 / Shutterstock.com Current Market Cap: $145 billion There is one problem with Shopify and several other names on this list: The rallies. While the massive rallies great for long-term investors, it makes the stocks susceptible to large pullbacks as well. If and when we get those declines, that’s investors’ opportunity to pounce. For Shopify, the bullish reasoning is multifold. First, Shopify is riding a much large trend — e-commerce — and therefore will continue to benefit from robust growth. When the coronavirus hit, sales were not negatively impacted. Instead, merchants flocked to its platform, driving Shopify’s revenue higher. Second, it’s building out the anti-Amazon business platform — giving merchants big and small power and control of the customer experience. Now the reward here is massive, as Shopify builds out multiple business segments likes shipping, credit, Shopify Pay and others. However, the risk is present as well. That is, can these companies that crave independence from Amazon delivery quality experiences for the customer? In the end, businesses and merchants are at least willing to try. In December 2019 I said investors could buy Shopify despite its lofty valuation. My argument centered on its valuation, saying this name could go from a $40 billion market cap to a $100 to $120 billion market cap in a decade. 7 Safe Stocks to Buy for Solid Returns in Tumultuous Times It was not obvious that the more than tripling in its value would take place in just a few months. In the long, long run, it’s not hard to imagine this name being significantly higher. Adobe Systems (ADBE) Source: r.classen / Shutterstock.com Current market cap: $228 billion Last but not certainly not least is Adobe. This company does a lot more than just Flash or Photoshop. It’s become a mainstay in e-commerce while also becoming a beacon in the graphics, digital and creative landscape. Find me a freelance graphic designer who’s not using Adobe. The stock has quietly racked up enormous gains as well. Adobe is up 140% over the past three years and 430% over the past five years. Over the last decade, the stock has rallied more than 1,300%, as its market cap was around $16 billion just 10 years ago. That’s some impressive action and Adobe doesn’t show many signs of letting up. Analysts expect double-digit earnings and revenue growth this year and next year, while the company gross margins remain solidly above 85%. While its top-line margins have been steady, its bottom-line profit margins have been soaring. Adobe is quickly yet quietly becoming a technology juggernaut right in front of us. Like some others on this list, the stock has been consolidating nicely over the past six months or so. Let’s see if this name can resolve to the upside. On the date of publication, Bret Kenwell held a long position in AAPL, ROKU, CRM and NVDA. Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post 7 Tech Stocks That Could Be the Future FAANGÂ appeared first on InvestorPlace.
Bitcoin vs Ethereum : What’s the Difference?
As an educated crypto investor it’s crucial you understand the differences between Bitcoin vs Ethereum. Both of these coins are titans in the market, albeit for different reasons. Both coins are vital for the market’s development at this point. Here’s what makes these coins so different but, yet so important in the market.
Bitcoin
Bitcoin was the world’s first successful cryptocurrency. Satoshi Nakamoto changed the world when he introduced his revolutionary protocol. His goal was to create a “peer-to-peer electronic cash system” that was both censorship-resistant and decentralized.
He succeeded in his mission when he launched Bitcoin officially in 2009. Since that time, Bitcoin has seen tremendous growth both financially and technologically. However, at its core, it still remains accessible to anyone. Bitcoin changed the world forever and inspired a new industry. For these reasons, you can consider Bitcoin the first generation of cryptocurrencies.
Notably, Bitcoin is not stagnant and the protocol continually develops. However, it was built to serve its particular purpose. Consequently, it’s not the best option for features such as smart contracts or other next-gen blockchain functionalities. Notably, the introduction of second layer protocols such as the Lightning Network expands Bitcoins functionality considerably.
The Second Generation – Bitcoin vs Ethereum
Ethereum is a distributed, public blockchain. This decentralized network introduced the world to smart contract scripting functionality. These protocols allowed anyone to build decentralized applications and expand the use cases for cryptocurrencies. Today, there are thousands of different cryptos and blockchain projects. However, most utilize some forms of smart contracts to streamline network activities.
Not Exactly A Cryptocurrency
It’s important you understand that Ethereum isn’t a cryptocurrency. Ethereum is the platform that the cryptocurrency Ether functions within. This network functions as a programmable decentralized network for Dapp developers primarily. Additionally, Ether’s primary role is to compensate miners for performing EVM (Ethereum Virtual Machine) computations.
Ethereum was the first cryptocurrency network built specifically to support Dapp development. Dapps are applications designed to run on decentralized networks. The first Dapps ran on decentralized networks such as Tor networks. These networks are censorship-resistant due to their decentralized nature.
Dapps that run on blockchain networks are at the core of the blockchain revolution. In this way, Ethereum represented a fundamental shift in the development and functionality of cryptocurrencies moving forward. For these reasons, Ethereum is considered a second-generation cryptocurrency
Smart Contracts
To execute smart contracts, Ethereum introduces a unique protocol known as the EVM – the Ethereum Virtual Machine. Each full Ethereum node runs an instant of these virtual stacks. The main advantage of EVMs is that they improve on the process of building decentralized applications by improving the programmability and efficiency that the network executes contract byte code.
History of Ethereum
One of Bitcoin’s early followers was a computer developer by the name of Vitalik Buterin. In 2013, this advantageous individual decided to build a new cryptocurrency. This new project would share many technical characteristics with Bitcoin. For example, both coins utilize a Proof-of-Work (PoW) algorithm to validate the state of the network.
Consensus
Bitcoin utilizes the SHA-256 algorithm. This mathematical equation requires miners to prove their work through advanced calculations. The network automatically adjusts its difficulty to ensure that blocks of transactions only get approved in ten-minute intervals. This approach ensures a predictive monetary issuance strategy until the last Bitcoin gets mined sometime in 2140.
Ethereum, like Bitcoin, currently uses a proof-of-work (PoW) consensus protocol. However, Ethereum uses the Ethash algorithm. Buterin decided on this mechanism to help reduce the advantage of specialized ASIC (Application Specific Integrated Circuit) mining rigs. ASIC mining rigs are built from the ground up to solve the SHA-256 algorithm Bitcoin uses. Critics of ASIC miners argue that these high-priced rigs cause centralization in the Bitcoin network.
Block Times
When comparing the transaction thru put of the networks, Ethereum comes out far ahead of Bitcoin. Bitcoin approves blocks every 10 minutes. These blocks hold no more than 1MB of data. Consequently, Bitcoin is only capable of around 7 transactions per second. This low data rate was built into Bitcoin’s core coding to ensure that anyone could use the network.
The Ethereum network is capable of approximately 15 transactions per second. These capabilities are set to improve significantly following the upcoming Ethereum 2.0 update. This upgrade would push Ethereum’s capabilities closer to 100,000 transactions per second according to developers.
Mining Rewards – Bitcoin vs Ethereum
There are different mining rewards paid out to nodes on each network. Bitcoin miners receive a reward of 6.5 BTC if they are the node that completes the SHA-256 equation first and adds the next block to the blockchain. Comparingly, Ethereum miners receive a reward of 2 ETH for their participation in validating blocks of transactions.
Total Supply – Bitcoin vs Ethereum
Bitcoin caps its supply of 21,000,000 coins. This strategy ensures that Bitcoin retains scarcity in the market. Reversely, there is no cap on the amount of Ether (ETH). The network must continue to produce ETH indefinitely to cover gas fees created by developers executing EVMs. Currently, there are 114,467,625.91 ETH in circulation today.
Ethereum to go to PoS
Interestingly, Ethereum is set to do a major upgrade this year to Ethereum 2.0. This hard fork would place ETH on a new blockchain that runs on a Proof-of-Stake (PoS) algorithm. PoS networks remove miners and rely on coin holders staking their tokens to validate the network’s state.
PoS networks are far more energy-efficient and cheaper to maintain. They also provide faster transaction times compared to PoW networks. Best of all, there is no need to purchase expensive mining equipment because all you need is a network wallet to stake your coins on a PoS system.
The ETH ICO vs Bitcoin’s Launch
Bitcoin had a quiet launch that was celebrated by only a select few in the cypherpunk and development community taking any notice of this monumental invention. Interestingly, Bitcoin’s journey officially began with the genesis block. This the first block of Bitcoin’s blockchain. While no one knows for sure how many Bitcoin’s Nakamoto mined, estimates put his rewards at 1 million Bitcoin.
In comparison, Ethereum entered the market with much more fanfare. The Ethereum ICO (Initial Coin Offering) raised $18 million. Ethereum continued this momentum into the launch of the first DAO (Decentralized Autonomous Organization). This event took place in April 2016. The launch of the DAO boosted Ethereum’s status and helped the network to secure $150 million in its public ICO. At the time, the DAO was the largest crowdfunding event to take place in the blockchain industry.
Bitcoin vs Ethereum – Apples vs Oranges
Now that you have a better understanding of the differences between Bitcoin vs Ethereum, it’s easy to see why both projects have longevity in the sector. As such, most crypto investors hold both of these coins in their portfolio.
Where to buy Bitcoin (BTC) & Ethereum (ETH)
These are two of the most popular cryptocurrencies in the world. The exchanges below enable the purchase of both of these digital assets.