9 Best Bitcoin Cryptocurrency Stocks to Buy Now
I’m buying crypto stocks with exposure to Bitcoin. This article will explain why I’m betting on these following stocks with the largest Bitcoin holdings to outperform the S&P 500 over the next few years.
Read my article on best crypto stocks under $5 if you are looking for cheaper crypto stocks with higher risk.
Table of Contents
What are Cryptocurrency Stocks?
Cryptocurrency stocks are shares in publicly traded companies with heavy exposure to cryptocurrencies. These companies usually hold Bitcoin on its balance sheet and can grow due to the increased crypto adoption over the next few years.
9 Best Crypto Stocks to Buy
Here is a list of top cryptocurrency stocks you may want to add to your portfolio:
- Grayscale Bitcoin Trust (OTCMKTS: GBTC)
- MicroStrategy (NASDAQ: MSTR)
- Block, Inc. (NASDAQ: SQ)
- Marathon Digital Holdings (NASDAQ: MARA)
- Riot Blockchain (NASDAQ: RIOT)
- Coinbase (NASDAQ: COIN)
- Silvergate Capital (NYSE: SI)
- Bitcoin Depot (NASDAQ: GSRM)
- Robinhood (NASDAQ: HOOD)
Here is also a chart with the current Bitcoin holdings for each company (As of September 30th 2022).
| Company | Bitcoins Held |
|---|---|
| Grayscale Bitcoin Trust (GBTC) | 635,240 |
| MicroStrategy (MSTR) | 130,000 |
| Marathon Digital Holdings (MARA) | 10,670 |
| Block, Inc (SQ) | 8,027 |
| Coinbase (COIN) | 8,633 |
| Riot Blockchain (RIOT) | 6,696 |
| Silvergate Capital (SI) | N/A |
| Bitcoin Depot (GSRM) | N/A |
| Robinhood (HOOD) | N/A |
Here are my thoughts on each individual stock.
1. Grayscale Bitcoin Trust (GBTC)
Grayscale is the world’s largest cryptocurrency asset manager with over $16 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.
Grayscale’s Bitcoin Trust is a closed-ended fund that holds around $12.4 billion AUM (~635,240 BTC) and has returned over 12,500% since inception.
GBTC’s Bitcoin deposits remained locked forever and cannot be resold back into the crypto market.
How Much Bitcoin is in each GBTC Share?
Each share of GBTC holds 0.00091713 BTC, which is worth about $17.85 in current market value.
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 Bitcoin Spot ETF Approval
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.
Unfortunately, the SEC rejected Grayscale’s Bitcoin Spot ETF application but Grayscale plans to sue the SEC and fight the decision in court.
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.
GBTC Risk Factors
The only downside to buying GBTC is the Grayscale Bitcoin Trust Discount issue. GBTC often trades below its NAV due to its annual fees and lack of accessibility on the NASDAQ & NYSE.
Once new Bitcoin spot ETFs appeared in Canada and Europe, many crypto investors sold their GBTC shares and bought up Bitcoin ETFs instead.
As of October 2022, the GBTC discount is 36% and you can purchase GBTC shares for under $12 even though each share holds over $17 in Bitcoin.
If the SEC approves the Bitcoin Spot ETF then the GBTC discount will be erased fairly quickly.
Read my article comparing Bitcoin (BTC) vs Grayscale Bitcoin Trust (GBTC) if you’re deciding between the best way to gain exposure to Bitcoin
2. MicroStrategy (MSTR)
MicroStrategy is an American business intelligence software and analytics company that added Bitcoin to its balance sheet in 2020 to protect the company’s balance sheet from inflationary risks.
MicroStrategy Executive Chair Michael Saylor is a Bitcoin maximalist who believes that cash is a “melting ice cube” and Bitcoin is a better long-term store of value.
MicroStrategy Total Bitcoin Holdings
Michael Saylor tweeted that MicroStrategy owns 130,000 bitcoins for $3.98 billion at an average purchase price of $30,639 as of October 2022.
What’s also interesting is that MicroStrategy borrowed $205 million in cash using the company’s Bitcoin as collateral to purchase more Bitcoin.
Despite crashing Bitcoin Prices, Michael Saylor continues to HODL MicroStrategy’s BTC stash and invest future cash flows into Bitcoin.
Why Buy MSTR over Bitcoin?
There are several reasons why investors may choose to buy MSTR stock over BTC on a crypto exchange.
- MicroStrategy is an excellent way to gain exposure to bitcoin without purchasing crypto personally because MSTR stock trades alongside BTC prices.
- MicroStrategy will continue to acquire BTC in the futures thus increasing the value of its balance sheet
- MicroStrategy plans to launch enterprise Bitcoin lighting products in the future to help corporations accept Bitcoin quickly and easily. This alone could add millions of dollars in future revenue.
- Holding Bitcoin on an exchange or digital wallet carry risks due to hackers, theft, or lost private keys. As long as MicroStrategy protects its Bitcoin stash, your shares will retain their value.
I personally hold MSTR in my SEP IRA because I believe MicroStrategy will become one of the most valuable companies in the world once the Bitcoin standard becomes mainstream.
3. Block, Inc (SQ)
Block, Inc. is a digital payment company that owns the popular Square and Cashapp financial products.
Block CEO Jack Dorsey is a Bitcoin Maximalist that believes in solving global financial inequity through the power of blockchain technology and cryptocurrency.
Block’s Total Bitcoin Holdings
Block Inc owns 8,027 Bitcoin that were purchased for $220 million at an average purchase price of ~$27,407.
As inflation and a potential US recession has hurt Block’s Inc net income, Jack Dorsey made a pledge to mine Bitcoin to boost revenue and push forward global Bitcoin adoption.
The company partnered with Blockstream to build a solar powered Bitcoin mining farm powered by Tesla technology.
Hopefully, Jack Dorsey will provide more information on how much revenue will be generated from Block Inc’s Bitcoin mining efforts in the future.
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 Digital Holdings is my favorite bitcoin mining stock because the company holds the most BTC on its balance sheet out of any publicly traded miner.
Marathon’s Total Bitcoin Holdings
Marathon owns 10,670 Bitcoin on its balance sheet and currently holds more BTC than any other BTC miner.
While most BTC miners sell Bitcoin from time to time to fund operations, Marathon adopted a long term HODL strategy and instead raises capital through stock offerings and loans to fund operations.
Marathon’s Total BTC Miners Deployed
Marathon currently has 57,000 active miners producing 5.7 Eh/s and plans to install an additional 19,000 miners by the end of 22.
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.
Marathon should become the largest Bitcoin mining company in North America, giving them a ton of upside at the current price range.
MARA Risk Factors
The biggest problem with Marathon is funding miner expansion without diluting shareholders too much. Marathon holds $55.3 in unrestricted cash on its balance sheet as of September 30th, 2022 and will most likely offer more stock to fund growth.
As long as Marathon holds its BTC then dilution won’t destroy shareholder value in the long run. On the other hand, Marathon may be forced to sell BTC during the current crypto bear market and I believe many investors would dump MARA stock in response to panic selling.
MARA stock currently trades at a price to sales ratio of 6 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.
5. Riot Blockchain (RIOT)
Riot Blockchain is an American Bitcoin mining company with operations in Central Texas, USA.
The company owns the single largest BTC mining in North America by developed capacity called Whitestone located in Rockdale, Texas. Whitestone has a total power capacity of 750 MW where Riot self-mines Bitcoin for itself along with two other institutional clients.
Riot’s Total Bitcoin Holdings
Riot holds 6,775 BTC on its balance sheet from self-mining operations.
Riot, unlike Marathon Digital Holdings, sells Bitcoin from time to time to generate income to fund existing operations.
Riot’s Mining Fleet and Hashrate
As of September 30th 2022, Riot deploys 55,728 miners with a mining capacity of 5.6 EH/s. The company plans to increase its mining fleet to 115,450 ASIC miners by Q1 2023 at a 12.5 EH/s hash rate.
Risk Factors
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 103 million users (14,500 of those are institutional investors) across 100 countries.
Coinbase fees are the highest out of most cryptocurrency exchanges allowing the company to generate revenue through transaction fees when users buy, sell, or convert cryptocurrency on its platform.
Coinbase Total Bitcoin Holdings
Coinbase holds 8,633 Bitcoin on its balance sheet
Coinbase Total Ethereum Holdings
Coinbase holds 123,021 ETH on its balance sheet.
Coinbase Risk Factors
However, Coinbase has struggled recently during the current crypto bear market.
Coinbase doesn’t perform well during crypto bear markets because retail and institutional trading activity decreases substantially.
The SEC is targeting Coinbase for potential security trading violations plus a former Coinbase executive was arrested before attempting to flee the country.
Coinbase faces ongoing competition for companies such as Robinhood (NASDAQ: HOOD), Binance, and Crypto.com so the company launched a NFT marketplace to further diversify its revenue sources.
The good news is that Coinbase has been around since 2012 and could become a major winner during the crypto crash because several other crypto exchanges have gone out of business or bankrupt since the 2021 crypto bull run.
COIN stock reminds me of Facebook in its early IPO days. 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.
Read my Coinbase statistics article for more information about the company.
7. Silvergate Capital (SI)
Silvergate Capital is the holdings company for Silvergate bank, a crypto financing company that provides liquidity to crypto related companies.
Silvergate famously loaned MicroStrategy $200 million to buy Bitcoin as an example of how the company generates revenue.
8. Bitcoin Depot (GSRM)
Bitcoin Depot is the largest Bitcoin ATM company in the world with thousands of crypto ATMs all over the country.
The company has over 7,000 crypto ATMs across the United States and Canada with further plans for global expansion in the future. Bitcoin Depot crypto ATMs make it easy for people to purchase Bitcoin, Litecoin, and Ethereum using cash or credit/debit cards and send the crypto to a digital wallet without using a crypto exchange.
Bitcoin Depot SPAC IPO Details
The company plans to go public via a SPAC in early 2023 worth ~$900 million to tap the public equity markets for enhanced liquidity. Of course, many investors will be skeptical since SPACs allowed insiders to sell shares to the public at higher prices.
You can invest in Bitcoin Depot stock now by purchasing the SPAC under the ticker: GSRM. Once the SPAC merger is approved, Bitcoin Depot will trade under a new ticker symbol: BTM.
Bitcoin Depot Valuation
Bitcoin Depot’s estimated revenue for 2022 is $623 million with EBITDA of $42 million. Since Bitcoin Depot is profitable, investors will pay around 15x EBITDA based on the current $888 million valuation.
This seems a bit expensive considering how the crypto markets are struggling right now. The good news is that Bitcoin Depot is profitable, which will help the company attract new investors.
The majority of SPACs are down from the 2021 SPAC boom so I won’t necessarily invest in GSRM until the price gets cheaper.
9. Robinhood (HOOD)
Robinhood is an American online brokerage company that offers stocks, ETFs, and cryptocurrencies for millions of retail investors in the United States.
While Robinhood isn’t a crypto company, you can buy and sell cryptocurrencies for free on its platform and store your crypto in your Robinhood wallet.
Robinhood Monthly Active Users (MAUs)
Robinhood had 13.3 million MAUs at the end of August 2022 and $71 billion in assets under custody on its platform.
Robinhood Risk Factors
Robinhood has struggled during the current crypto winter just like Coinbase because crypto trading activity is closely tied to revenue.
The good news is that crypto Billionaire Sam Bankman-Fried bought a stake in Robinhood in 2022, which will help the company avoid any bankruptcy fears.
Why Invest in Crypto Stocks?
Crypto could reach 1 billion users by 2030 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. Investing in Bitcoin offers future protection against inflation and fiat currency debasement.
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.
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.
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
Things aren’t looking good for crypto stocks at the moment. The overall crypto market has crashed, Voyager and Celsius are facing bankruptcy, and many crypto newbies have lost their entire savings.
Don’t expect crypto stocks to recover anytime soon until the dust settles and we approach the next Bitcoin halving in 2024. Until then, this is a wonderful time to accumulate shares in your favorite crypto stocks and sell covered calls to generate income while you wait for the market to recover.
If you’re looking for publicly traded Bitcoin mining companies then refer to my article on the best Bitcoin mining stocks.
