Cryptocurrency stocks are a new emerging asset class that Wall Street embraced fully thanks to massive interest in cryptocurrencies like Bitcoin, Ethereum, Cardano, and Dogecoin.
Table of Contents
- What are Cryptocurrency Stocks?
- Best Cryptocurrency Stocks
- Where to Buy Bitcoin Crypto Stocks
- Crypto Stocks FAQ
- Conclusion
What are Cryptocurrency Stocks?
Cryptocurrency stocks are shares in publicly traded companies with heavy exposure to cryptocurrencies such as Bitcoin. Many retail investors, institutional investors, and fund managers have flocked towards crypto stocks as an alternative asset class due to the projected growth over crypto adoption over the next few years.
Crypto could reach 1 billion users by 2024 and many investors are looking for the best cryptocurrency stocks that will benefit from fast-growing global adoption.
Bitcoin is the main asset class for crypto stocks because many people believe Bitcoin is a form of digital gold.
Bitcoin is decentralized, scarce, and available to anybody who owns a crypto wallet or digital exchange account.
The easiest way to buy Bitcoin is through a trusted cryptocurrency exchange like Coinbase.
Coinbase is the best US based cryptocurrency exchange to buy and sell coins like Bitcoin, Ethereum, and other altcoins. It's the largest exchange in America with over 68 million verified users. I've used them since 2018 with zero issues. Highly recommended.
However, many investors may prefer owning stock in companies with large Bitcoin holdings.
These companies followed the lead of MicroStrategy CEO Michael Saylor who became the first executive to hold Bitcoin as a treasury reserve asset.
If you’re looking for publicly traded Bitcoin mining companies then refer to my article on the best Bitcoin mining stocks.
Best Cryptocurrency Stocks
Here is a list of top cryptocurrency stocks to buy if you are looking to benefit from rising Bitcoin prices:
- Grayscale Bitcoin Trust (OTCMKTS: GBTC)
- MicroStrategy (NASDAQ: MSTR)
- Block, Inc. (NASDAQ: SQ)
- Marathon Patent Group (NASDAQ: MARA)
- Riot Blockchain (NASDAQ: RIOT)
- Coinbase (NASDAQ: COIN)
- Voyager Digital (OTCMKTS: VYGVF)
- BTCS (NASDAQ: BTCS)
Here’s a table of Bitcoins held by each company (According to BitcoinTreasuries.net as of January 06, 2022):
| Company | Bitcoins Held |
|---|---|
| Grayscale Bitcoin Trust | 654,885 |
| MicroStrategy | 129,218 |
| Voyager Digital | 12,260 |
| Marathon Digital Holdings | 9,373.6 |
| Block, Inc | 8,027 |
| Coinbase | 4,487 |
| Riot Blockchain | 6,062 |
1. Grayscale Bitcoin Trust (GBTC)
Grayscale is the world’s largest cryptocurrency asset manager with over $40 billion in assets under management.
The popular Grayscale Bitcoin Trust allows investors to own Bitcoin without worrying about storing it through a trust that reports to the SEC.
When you purchase GBTC through their private closed trust, you must invest at least $50,000 and Grayscale charges you a management fee.
Luckily, there is an easy way to avoid management fees by purchasing GBTC stock over the counter.
You can purchase GBTC through any stock trading broker that accepts OTC orders. I use Fidelity to buy GBTC in my SEP IRA but I also posted a list of good OTC brokers at the end of this article.
Grayscale owns around 3.5% of all Bitcoins 1 in total circulation so it’s an easy way to gain Bitcoin exposure until the SEC approves the Bitcoin ETF.
However, that may change in the future because Grayscale desperately wants to convert GBTC into an ETF 2 to gain additional exposure to retail investors and charge an expense ratio for managing the fund.
I understand the need for a product like GBTC to give institutional and whales a simple and easy way to invest in Bitcoin. It’s also useful for retail investors who want Bitcoin exposure in their 401k or IRA. You can even buy GBTC in your child’s UTMA or 529 plan to save for his or her future.
Read my article comparing Bitcoin (BTC) vs Grayscale Bitcoin Trust (GBTC) if you’re deciding between the best way to gain exposure to Bitcoin as an asset class.
2. MicroStrategy (MSTR)
In 2020, MicroStrategy (MSTR) became the first publicly traded US company to add Bitcoin to its balance sheet.
Microstrategy CEO Michael Saylor is a bullish bitcoin adopter who believes that cash is a “melting ice cube” and bitcoin is a better long-term store of value.
Watch this interview with Michael Saylor as he talks about bitcoin in-depth:
As of April 2022, MicroStrategy owns over 129,000 bitcoins and many investors (myself included) have bought the stock to own a stake in those bitcoins.
What’s also interesting is that Micheal Saylor did the unthinkable by borrowing $205 million in cash 3 using the company’s Bitcoin as collateral to purchase more Bitcoin.
With a market cap of under $6 billion, Microstrategy is an excellent way to gain exposure to bitcoin without purchasing crypto personally.
MSTR stock will trade extremely close along with BTC prices so it’s hard to figure out a long term price target.
However, many long-term bitcoin bulls like Cathie Wood believe Bitcoin could reach $500,000 4 in the near future.
That would give Microstrategy stock 10x upside if the prediction is true.
3. Block, Inc (SQ)
Block, Inc. is a digital payment company that owns the popular Cashapp.
Block, Inc. invested $50 million 5 in bitcoin in 2020 to acquire 4,709 BTC in total. As a digital payment company, I understand Square knows a lot about how payments will change in the future.
After reporting massive revenue growth due to the rising demand for Bitcoin, Block Inc. made another $170 million Bitcoin purchase in February 2021.
Square’s Cash App Bitcoin Revenue increased 785% YOY in 2020 6, forcing the company to take Bitcoin more seriously.
Selling Bitcoin alone represented 48% of revenue in 2020.
While more companies may add bitcoin to its balance sheet in the future, I think Square is a soft play on bitcoin whenever Bitcoin increases in price.
4. Marathon Digital Holdings (MARA)
Marathon is my favorite bitcoin mining stock in a fast-growing industry because Bitcoin isn’t distributed like fiat currency but instead must be mined like physical gold.
Marathon plans to deploy 199,000 Antiminer S-19 Pro Bitman miners to increase its Bitcoin mining output and achieve a 23.3 EH/s hash rate by Q1 2023.
In Q1 2022 7 Marathon produced a record 1,258.6 newly minted Bitcoins.
Marathon Digital Holdings is HODLing 9,373.6 Bitcoin and will increase its Bitcoin stash leading up to full mining capacity in early 2023. Total miners deployed reached 36,830 at the end of March 2022.
Marathon should become the largest Bitcoin mining company in America, giving them a ton of upside at the current price range. 199,000 deployed miners would make them a market leader in an industry that got a massive boost after China’s Bitcoin mining ban.
MARA stock currently trades at a price to sales ratio of around 30 but that’s with Marathon operating at less than 20% full capacity. Once all miners are deployed, Marathon could achieve $100+ million in Bitcoin mining revenue with the added bonus of HODLing newly minted Bitcoin.
That would make Marathon extremely value due to its Bitcoin holdings alone and should boost MARA stock accordingly. MARA stock could trade at over $100+ by next year and I think it’s one of the safer crypto stocks to own right now.
5. Riot Blockchain (RIOT)
Riot Blockchain is another Bitcoin miner that plans to profit from the rise in Bitcoin prices.
Riot will have over 9,000 S-19 Antiminer Pro deployed since they recently received a big order in early February.
While I don’t like Riot Blockchain as much as Marathon Patent Group (Riot hasn’t added Bitcoin to its balance sheet, I think Riot along with Marathon Patent Group maintain similar upside in the long run.
Bitcoin mining is a fast growing industry and you can’t go wrong with a company worth just under $2 billion that will have thousands of Antiminer S-19s mining Bitcoins pretty soon.
6. Coinbase (COIN)
Coinbase is the largest crypto exchange in the United States with 89 million users (11,000 of those are institutional investors) across 100 countries.
The company earns $7.81 billion in 2021 annual revenue and remains highly profitable and should continue to do so even as the overall crypto hype cools off.
Coinbase fees are the highest out of most cryptocurrency exchanges, which is bad for retail investors but good for COIN shareholders.
COIN stock is currently down big from its all-time highs despite the company achieving record growth in key metrics like verified users, monthly transacting users, trading volume, and assets on the platform.
The company faces ongoing competition for companies such as Robinhood (NASDAQ: HOOD), Binance, Crypto.com, and Voyager so Coinbase launched its own NFT marketplace to further diversify its revenue sources.
In addition, Coinbase holds nearly 5,000 BTC in its treasury and I expect this number to increase due to the lower Bitcoin prices recently.
COIN stock reminds me of Facebook in its early IPO days but Coinbase is super profitable and leads the cryptocurrency in trading fees by a wide margin. Crypto investors like myself rely on Coinbase for its ease of use and security so I don’t see fees hurting profitability in the long run.
7. Voyager Digital (VYGVF)
Voyager Digital is a fast-growing cryptocurrency trading platform with 3.5 million verified users and earned $415.8 million in 2021.
However, VYGVF is down a ridiculous 80% over the past 52 weeks after peaking during the most recent Novemver 2021 crypto bull market.
Total assets on the platform reached $5.6 billion in 2021 and Voyager Digital plans to offers its services in Canada and France during 2022.
Voyager remains in direct competition with other cryptocurrencies exchange like Coinbase because they offer crypto investors an easy way to earn high-interest APY from their crypto holdings.
While Coinbase is safe and easy to use, it lacks interest-earning opportunities on your crypto holdings outside of stable coins like DAI and USDC.
Voyager Digital does have a few problems that add additional risk to investors. These risk factors include:
- VYGVF trades on the OTC markets so it’s unavailable to many investors who use popular trading apps like Robinhood or Webull.
- Voyager Digital doesn’t have a desktop trading platform so many professional crypto traders avoid using the platform because of this. It seems the desktop beta release has been postponed for over a year.
- Voyager makes money using a spread instead of charging a commission. Institutional investors are extremely conservative with their assets and would prefer using a more professional platform like Coinbase because of this.
However, the good news is VYGVF stock trades at just $13 and looks like a bargain considering it’s under a $2 billion market cap.
8. BTCS (NASDAQ: BTCS)
BTCS Key Stats
- 2021 Revenue: 1.21 million
- 2021 Net Income: -$16 million
- P/S ratio: 19
- Dividend Yield: 1.6%
BTCS is a small-cap blockchain & cryptocurrency staking company that has a substantial cryptocurrency portfolio made up of Bitcoin, Ethereum, Cardano, and other major coins.
The company made history with the announcement of the first ever Bividend, a dividend payable in Bitcoin. BTCS already paid out its first bividend back in March and investors had to option to either receive a normal dividend or Bividend by providing their unique Bitcoin address.
BTCS has ambitious plans to launch a crypto portfolio tracker similar to Cointracker and will continue to earn staking revenue through its massive digital asset portfolio.
9. Core Scientific (NASDAQ: CORZ)
Core Scientific is a Bitcoin mining company that currently leads the entire mining industry in total BTC mined so far in 2022.
10: Bakkt (NASDAQ: BKKT)
Bakkt offers consumers a useful digital cryptocurrency app.
Where to Buy Bitcoin Crypto Stocks
Here are our recommended stock trading brokers & apps to invest in high growth crypto stocks.
For NASDAQ & NYSE Stocks (MSTR, SQ, MARA, COIN, RIOT)
Robinhood is a popular stock & crypto trading app that's extremely popular with millenials. You can buy and sell stocks, cryptocurrencies, and options for free.
Webull is my favorite stock trading app for creating watchlists and tracking stocks. I use the Webull app on my phone as well as the desktop platform for my Youtube videos. Get 2 free stocks when you sign up for Webull using my referral link.
For OTC Crypto Stocks (GBTC & VYGVF)
Fidelity Investments is my preferred full service broker for buying and selling stocks in a traditional brokerage account and IRA retirement account. $0 stock trades, 24/7 phone customer support, and an easy to use app are just some of the reasons why I use Fidelity.
Crypto Stocks FAQ
Conclusion
Just remember that Crypto stocks trade extremely closely along side Bitcoin so expect volatility if Bitcoin soars or crashes in price.
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Article Sources- BusinessInsider. “Grayscale Bitcoin Trust is Now the Largest Holder of Bitcoin, https://markets.businessinsider.com/currencies/news/grayscale-bitcoin-trust-largest-public-holder-competition-increasing-osprey-2021-3-1030221296[↩]
- CNBC. “Grayscale Desperate Wants to Convert GBTC into an ETF, https://www.cnbc.com/2021/08/10/bitcoin-etf-is-no-longer-an-if-but-a-when-grayscale-investments-says.html[↩]
- Decrypt.co. “MicroStrategy Takes $205 million Bitcoin-backed loan, https://decrypt.co/96313/microstrategy-takes-out-205m-bitcoin-backed-loan-buy-more-bitcoin[↩]
- TheStreet. “Cathie Wood Says Bitcoin Could Skyrocket Another $500,000, https://www.thestreet.com/investing/cathie-wood-bitcoin-skyrocket-500000-dollars[↩]
- Square. “Square Invests $50 million in Bitcoin, https://squareup.com/us/en/press/2020-bitcoin-investment[↩]
- Coindesk. “Square Cash App Bitcoin Revenues Swell 785% in 2020, https://www.coindesk.com/business/2021/02/23/square-cash-app-bitcoin-revenues-swell-785-in-2020/[↩]
- Marathondh, “Marathon Digital Holdings Announces March 2022 Production Update, https://ir.marathondh.com/news-events/press-releases/detail/1281/marathon-digital-holdings-announces-bitcoin-production-and[↩]
