Cryptocurrency stocks are a new emerging asset class that Wall Street embraced fully in 2021 thanks to massive interest in cryptocurrencies like Bitcoin, Ethereum, Cardano and Dogecoin.
Table of Contents
- What are Cryptocurrency Stocks?
- Best Bitcoin Crypto Stocks
- Where to Buy Bitcoin Crypto Stocks
- Crypto Stocks FAQ
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 Bitcoin stocks as an alternative asset class to gain Bitcoin exposure without holding BTC directly.
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 Bitcoin Crypto 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)
- Square (NASDAQ: SQ)
- Marathon Patent Group (NASDAQ: MARA)
- Riot Blockchain (NASDAQ: RIOT)
- Coinbase (NASDAQ: COIN)
- Voyager Digital (OTCMKTS: VYGVF)
Here’s a table of Bitcoins held by each company (According to BitcoinTreasuries.net as of August 28th, 2021):
|Grayscale Bitcoin Trust||654,885|
|Marathon Digital Holdings||6,225|
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 manageent 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 in total circulation so it’s an easy way to gain Bitcoin exposure until the SEC approves Bitcoin ETF.
However, that may change in the future because Grayscale desperately wants to convert GBTC into an ETF 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 August 2021, MicroStrategy owns over 105,000 bitcoins and many investors (myself included) have bought the stock to own a stake in those bitcoins.
With a market cap of under $8 billion, Microstrategy is an excellent way to gain exposure to bitcoin without purchasing crypto personally.
My strategy is to own all 3: physical gold, Microstrategy shares, and bitcoin.
MSTR stock will trade extremely close along BTC prices so it’s hard to figure out a long term price target.
However, many long term bitcoin bulls think Bitcoin could reach $1,000,000 by the end of 2021.
That would give Microstrategy stock 20x upside if the prediction is true.
3. Square (SQ)
Square is a digital payment company that owns the popular Cashapp.
Square invested $50 million in bitcoin last year 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, Square bought another $170 million in Bitcoin during February 2021.
Square’s Cash App Bitcoin Revenue increased 785% YOY in 2020, 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 that will explode in 2021.
Bitcoin isn’t distributed like fiat currency but instead must be mined like physical gold.
Marathon plans to deploy 133,000 Antiminer S-19 Pro Bitman miners to increase its Bitcoin mining output by Q3 2022.
In Q2 2021, Marathon achieved $29.3 million in BTC mining revenue (Up 220% YOY) and produced 654 newly minted Bitcoins. Q2 was on track to become a record quarter in terms of profit but net losses reached $1.04 per share due to a change in value in the company’s NYDIG holdings.
Marathon Digital Holdings is HODLing 6,225.6 Bitcoin as of August 2021 and will increase its Bitcoin stash leading up to full mining capacity in July 2022. Total miners deployed reached 19,395, which is a far cry from MARA’s 133,000 miner goal next year.
MARA stock has a market cap of less than $3 billion so I think the stock has a ton of upside this year.
I expect Bitcoin mining stocks to soar much higher as more investors realize the potential of Bitcoin as an alternative store of value to regular savings.
Marathon should become the largest Bitcoin mining company in America, giving them a ton of upside at the current price range. 133,000 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 went public in April 2021 at the top of the crypto bull market as the largest crypto exchange in the United States.
Coinbase has 68 million users (9,000 of those are institutional investors) across 100 countries with $2 billion revenue in Q2 2021. The company 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 around 40% 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 platform.
In addition, Coinbase holds nearly 5,000 BTC in its treasury and I expect this number to increase due to the lower Bitcoin prices as of 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 that gained popularity among retail and institutional investors since the beginning of 2021.
The company posted a superb Q2 2021 quarter with total verified platform users up 75% QoQ to 1.75 million. Quarterly revenue hit records also and projects in the $103 to $107 million range.
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 stablecoins like DAI and USDC.
VYGVF trades on the OTC markets so it’s unavailable to many investors who use popular trading apps like Robinhood or Webull.
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.
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)
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
Just remember that Crypto stocks trade extremely closely along side Bitcoin so expect volatility if Bitcoin soars or crashes in price.