Home Merchant cash advance Forget Dogecoin: these stocks will make you richer

Forget Dogecoin: these stocks will make you richer

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ohIn the long run, there has been no better creator of wealth than the stock market. According to a report published by Crestmont Research, the 20-year rolling total returns (including dividends) for S&P 500 have never been negative between 1919 and 2020. In other words, if you bought an S&P 500 Tracking Index at some point since 1919 and held it for 20 years, you made money. money, period.

But over the past decade, cryptocurrencies have circled around traditional stocks. During the past year, until April 21, 2021, Bitcoin (CRYPTO: BTC), the world’s largest digital currency, gained over 700%. Meanwhile, the hottest crypto, Dogecoin (CRYPTO: DOGE), has grown almost 16,000% in the past 12 months – and no, that’s not a typo.

Image source: Getty Images.

Dogecoin soars for stupid reasons

Dogecoin, which can be bought for pennies, has been the mother of all FOMO (fear of running out) exchanges lately. Young investors have always been attracted to assets with strong momentum. Take its perceived low token price and the unregulated nature of the crypto markets, and you have powder keg moment for Dogecoin.

But all is not as it seems. For example, Dogecoin is not motivated by anything fundamental that would remotely support its market capitalization of around $ 50 billion reached earlier this week. On the contrary, the tweets and the pumping of You’re here CEO Elon Musk seems to have done the heavy lifting.

Plus, it’s hard to ignore the fact that Dogecoin was created in 2013 as a joke by two engineers. By combining two of the hottest things of 2013 – cryptocurrency and a popular Shiba Inu dog meme – Dogecoin was born. Dogecoin has a lot of momentum right now, but it lacks the real differentiation to be a meaningful digital currency.

Moreover, the utility of Dogecoin is practically non-existent. If you think I am emphasizing the lack of real-world Bitcoin use, take a look at where Dogecoin is accepted. Depending on your source, anywhere from a few dozen to 1,200 companies around the world accept Dogecoin as a method of payment. There are hundreds of millions of businesses around the world which shows how minimal the utility of Dogecoin is.

Ignore Dogecoin: These Actions Can Make You Rich

Dogecoin is nothing more than a dart throw – and bad at that. Rather than throwing your money into what looks like a clear pump-and-dump asset, consider investing it in companies with tangible growth prospects that can make you richer over time. The following trio of actions certainly does the trick.

A person inserting their Cash Card into a Square point of sale card reader.

Image source: Square.

Square

If you are keen on having exposure to cryptocurrency stocks, the payment platform Square (NYSE: SQ) is the smart way to get that exposure.

Square is arguably best known for its ecosystem of sellers. For nearly a decade, the company has primarily provided small merchants with physical point-of-sale devices, analytics, loans, and other tools to help their businesses succeed. In the seven years leading up to the pandemic, gross payment volume (GPV) crossing Square’s network grew at an annualized rate of 49%. Even though that growth slowed significantly due to the pandemic in 2020, we still saw $ 112.3 billion in GPVs flow through the seller ecosystem.

The interesting thing about the seller ecosystem is that it is starting to attract big companies. Two years ago, 24% of all GPVs came in the fourth quarter from companies with at least $ 500,000 in annualized GPV. In the fourth quarter of 2020, this figure reached 30%. Since this segment is driven by merchant fees, having larger companies as customers should result in a higher gross margin.

However, Cash App is the bigger story. The company’s peer-to-peer payment platform has seen its number of monthly active users more than quintuple to 36 million in three years. Cash App enables Square to generate income from merchant transactions, as well as wire transfers, investments, and Bitcoin exchange. In fact, Bitcoin’s revenue grew nine-fold in 2020 to $ 4.57 billion. Bitcoin revenue only generates subordinate margins, but it attracts millions of new members.

Better yet, Cash App generated $ 41 in gross profit per user in Q4 2020. That compares to its cost of acquiring customers per user of less than $ 5. It’s a high-margin business, and it should quickly become Square’s primary profit driver.

An esports player participating in a tournament by playing a game on their smartphone.

Image source: Getty Images.

Skillz

Another “SPAC-tacular” stock that can make you much richer than Dogecoin is the esports and gaming platform. Skillz (NYSE: SKLZ).

Skillz went public in mid-December via a Special Purpose Acquisition Company, or SPAC (hence the terrible pun above). He has since tracked down all of his impressive gains. But the short-term pain in large companies or single firms has always been to the benefit of long-term investors.

What sets Skillz apart is the company’s unique approach to gaming. Instead of spending a lot of money developing games and hoping it could compete with some of the most established companies in the world, he created a platform that allows developers to show off their games and gamers to compete for money and prizes. The end result is that Skillz and the developers are able to pocket a percentage of the money, leading to the company’s absurdly high gross margin of 95% in 2019 and 2020.

The key to Skillz is simply to get your name out there. The multi-year deal he signed with the NFL in the first week of February goes a long way in getting there. This deal will allow developers to create NFL-themed games that will debut on the Skillz platform by the end of 2021 or early 2022. Football is by far the most popular sport in the United States, so Skillz couldn’t have asked for a better partner.

And Skillz offers some of the strongest growth prospects on Wall Street. While estimates remain somewhat limited and fluid, revenue is expected to grow from $ 230 million in 2020 to around $ 1 billion by 2024. This kind of growth can make patient investors rich.

A woman holding a credit card in her left hand, as she prepares to make an online purchase.

Image source: Getty Images.

Etsy

One last stock to buy instead of Dogecoin that has all the tools you need to get rich is the e-commerce platform. Etsy (NASDAQ: ETSY).

Etsy is one of the few dozen companies that have truly prospered from the pandemic. People choosing to stay at home to avoid catching or spreading COVID-19 have turned online to purchase necessary goods or simply to make wellness purchases. Etsy has benefited from both, with face covers flying off digital shelves.

What makes Etsy so special is its emphasis on personalization and small merchants. By creating a platform for small and medium businesses that aim to produce unique or personalized products, Etsy has a degree of specialization in the retail space that will be extremely difficult to replicate. Although Amazon is the industry goliath, it is not as big a threat to Etsy as it seems due to Etsy’s specialization.

The proof is also in the pudding that consumers really love what Etsy has to offer. Last year, half of the company’s all-time buyers made a purchase, with repeat buyer growth of nearly 160%. A repeat buyer is someone who makes six or more separate purchases totaling at least $ 200 in total throughout the year.

Etsy also does an amazing job of keeping buyers and sellers motivated. He has increased his use of video and recently started offering SEO videos to marketers. He also overhauled Etsy Ads to make advertising on the platform as effective as possible for merchants. Understand that their success is imperative to Etsy’s long-term well-being.

With revenues set to triple by the middle of the decade, Etsy looks like a money maker for patient investors.

10 stocks we like best at Etsy
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool. Sean Williams owns shares of Amazon, Skillz Inc. and Square. The Motley Fool owns stock and recommends Amazon, Bitcoin, Etsy, Skillz Inc., Square, and Tesla. The Motley Fool recommends the following options: January 2022 long calls at $ 1,920.0 on Amazon and January 2022 short calls at $ 1940.0 on Amazon. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.