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There have never been more ways to get exposure to crypto in the stock market.
This article will explore the publicly-traded companies that are facilitating transactions or building the infrastructure of the crypto industry.
Best Cryptocurrency Stocks
#1. Coinbase (COIN)
- Market value: $50 billion
- 1-Year Trailing Performance: -29%
Coinbase is a cryptocurrency exchange that allows people to buy, sell, and hold cryptocurrencies. The exchange has +70 million verified users and over $255 billion in assets.
Coinbase was the most anticipated public offering of 2021 – shares of COIN began trading around the same time that bitcoin reached its all-time highs of $64,000.
Transaction fees are Coinbase’s main source of revenue; when a user makes a purchase or sale of bitcoin, Coinbase gets a piece for brokering the value exchange.
And those pieces add up. Coinbase has generated over $1 billion in revenues in each of the last three quarters.
However, as you might imagine, its transaction revenues are largely influenced by volatility in crypto-land. A crypto bear market in crypto significantly impacts Coinbase’s bottom line.
#2. Block (formerly Square) (SQ)
- Market value: $68 billion
- Return on Equity TTM: -37%
It became popular in the underbanked and unbanked parts of the U.S. and abroad.
Folks that don’t have access to traditional banking services rely on Block’s products and services, which require fewer regulatory hoops to jump through.
Additionally, the Cash App is the second-largest peer-to-peer (P2P) payments app in the U.S. It has over 36 million users and continues to grow rapidly. Users can also buy bitcoin on the app.
Block’s CEO Jack Dorsey recently said, “Bitcoin changes absolutely everything. I don’t think there is anything more important in my lifetime to work on.”
Including the name of the company. Dorsey officially changed the name to “Block” to better reflect the company’s objectives moving forward. And we’re starting to get a glimpse.
For example, the Cash App just integrated the Lightning Network for payments.
Dorsey is putting the power of the Bitcoin network in the hands of millions.
It’s won’t be long until the Square payments terminals integrate Lightning and suddenly merchants can seamlessly accept Bitcoin.
Exciting things are happening at Block. The stock has gotten crushed in the new year, but we believe the company’s long-term objective are very much intact.
#3. Robinhood Markets (HOOD)
- Market value: $13 billion
- Return on Equity: -53%
Robinhood went public in July at $38 per share and allowed retail investors to participate in its IPO, a process traditionally reserved for private and institutional investors.
Shares of HOOD traded down 9% on its opening day, only to double to $70 per share just a week later.
The platform that enabled meme stocks became one itself.
If this trading behavior continues with HOOD, its financials might matter less than they do for the average stock. However, those financials increasingly rely on cryptocurrencies.
Crypto accounts for nearly a fifth of Robinhood’s total revenue. Like Coinbase, it collects transaction fees when users buy and sell crypto, in addition to selling order flow to high-frequency trading firms.
Therefore, revenue correlates to the platform’s trading activity, which decreases when bitcoin doesn’t go up 10% every day.
#4. PayPal (PYPL)
- Market value: $225 billion
- Return on Equity: -24%
PayPal is a fintech company with many of the same products and services as Block.
Venmo, the largest P2P payments app in the U.S., has over 52 million users.
PayPal is creating the next ‘SuperApp’ with a fully integrated ecosystem across commerce and financial payments.
The company’s new app will centralize P2P payments, direct depositing, QR codes for in-store purchases, a Venmo Debit Card, budget and saving tools, and most importantly for this article: crypto.
PayPal’s crypto initiative launched in late 2020 and has exceeded expectations.
For example, customers who buy bitcoin on PayPal’s platform log into the app twice as often as before buying crypto.
Crypto locks customers into the PayPal ecosystem, possibly leading to engagement with other services on the platform, like Buy Now Pay Later (BNPL) or Honey’s suite of shopping tools.
We believe that PayPal and Block can successfully coexist. The digital wallet market is exponentially growing — network effects can tolerate two giants in this space.
#5. CME Group (CME)
- Market value: $80 billion
- Return on Equity: +14%
CME Group is a derivatives marketplace that enables clients to trade futures, options, cash, and OTC markets, optimize portfolios and analyze data.
CME also has cryptocurrency futures and options that allow traders to efficiently hedge their crypto exposure.
This includes Bitcoin futures and options, Micro Bitcoin futures, and Ether futures.
Micro Bitcoin futures are 1/10 the size of one bitcoin, which provides an “efficient, cost-effective way to fine-tune bitcoin exposure and enhance your trading strategies,” compared to the regular bitcoin contract representing five bitcoin.
These smaller contracts are attracting more retail investors to the platform, a focus of CME Group for quite some time.
“Obviously, the massive increase we’ve seen in the price of the cryptocurrency in and out of itself lends to a smaller contract for more participants to manage their risk,” CEO Terry Duffy said on a recent conference call.
#6. Nvidia (NVDA)
- Market value: $695 billion
- Return on Equity: +107%
Nvidia makes a key component of accelerated computing called GPUs. The gaming, professional visualization, data center, and automotive markets depend on these ‘chips’ to provide the required computing power.
What’s another market that requires a ton of computing power? Cryptocurrency mining.
The ‘NVIDIA CMP HX’ is a dedicated GPU for professional cryptocurrency miners, allowing them to mine more efficiently and recoup mining investments faster.
The CMP cards first launched in February 2021 and booked $155 million in revenue in its first fiscal quarter. However, CMP sales are significantly down on a quarter-over-quarter basis.
The company expects CMP sales to decline to “very negligible” in the current quarter.
Nvidia’s CEO wanted a card specifically built for crypto miners, so they’d stop taking them from gamers. It this this to appease its core market of gamers.
Regardless of the success of CMPs, there are many miners that use the company’s GPUs for mining, although it’s difficult to track how many.
Looking ahead, it’s hard to imagine a world where the most capable technology company does not participate in, or benefit from, the rise of Bitcoin.
#7. MicroStrategy (MSTR)
- Market value: $5.3 billion
- Return on Equity: -1%
MicroStrategy is a business intelligence and analytics company that helps enterprises build and deploy cloud-based apps.
The company’s CEO, Michael Saylor, has been one of the loudest voices in the bitcoin community over the past year.
During this time, Saylor has purchased over 120,000 bitcoin on MicroStrategy’s behalf — worth close to $4 billion.
He and his company are all-in on bitcoin. Literally, MicroStrategy has raised debt to buy more bitcoin.
Shares of MSTR are substantially up since Saylor went public with his bitcoin initiative.
It’s clear that investors are using MSTR as a bitcoin proxy in the public markets.
“The signal is monetary expansion everywhere. The problem is people are going to lose half their wealth in a few years. The solution is Bitcoin. The rest is noise,” Saylor has said.
#8. Grayscale Bitcoin Trust (GBTC)
- Market value: $22 billion
- Return on Equity: -21%
The Grayscale Bitcoin Trust (GBTC) is perhaps the most direct exposure to bitcoin in the public market.
GBTC is a trust that holds bitcoin on the investor’s behalf. You buy shares of GBTC, and they use the capital to buy bitcoin.
However, there’s a catch. GBTC owners typically pay a ‘premium to NAV’ that is between 10 to 30 percent.
This means if bitcoin is trading at $60,000 in the crypto spot markets, you could pay around $78,000 to ‘own‘ the same amount of bitcoin through GBTC — plus a 2% annual fee.
It works the other way, too. GBTC can trade at a discount to NAV where investors pay less than market value to acquire the asset.
Shares of GBTC have traded at a discount to NAV since February 2021. In the event of a spot Bitcoin ETF approval, that discount to NAV would get zipped up to 0%.
Note, GBTC investors don’t actually own the bitcoin they ‘buy.’ Grayscale owns it on their behalf, so self-custody is out of the equation.
GBTC is an imperfect way to invest in bitcoin’s rise. But maximalists are willing to stomach the premiums and fees if it means tax-advantaged exposure to bitcoin in retirement accounts, like a Roth IRA.
Grayscale also has a trust for ether and a newly launched Grayscale Digital Large Cap Fund (GDLC).
#9. Marathon Digital Holdings (MARA)
- Market value: $3.2 billion
- Return on Equity: +32%
Marathon Digital Holdings “helps you gain exposure to Bitcoin in your portfolio without having to deal with the compilations of holding the asset directly.”
Marathon is an enterprise Bitcoin miner with approximately 133,000 miners. If all of its miners were deployed today, Marathon would represent 12% of the Bitcoin network’s total hash rate.
Think of hash rate as the ‘power’ or ‘speed’ of mining. The higher a miner’s hash rate, the higher their probability is of earning bitcoin.
And Marathon earns its bitcoin. The company produces between 55 and 60 bitcoin per day by verifying transactions on the Bitcoin network.
Buying shares of Marathon is investing in Bitcoin’s infrastructure.
#10. Advanced Micro Devices (AMD)
- Market value: $165 billion
- Return on Equity: +50%
Advanced Micro Devices, better known as AMD, makes high-performance computing, graphics, and visualization technologies.
We see AMD and Nvidia as similar ‘pick-and-shovel plays in the crypto market. They each create products that are vital for crypto mining.
However, unlike Nvidia, AMD will not restrict the cryptocurrency-mining capabilities on its PC graphics cards.
AMD admits these PC graphics cards are not optimized for cryptocurrency mining, while Nvidia has created a product specifically for mining.
To be fair, Nvidia is four times the size of AMD.
#11. Riot Blockchain (RIOT)
- Market value: $2.4 billion
- Return on Equity: -12%
Riot Blockchain is one of the largest publicly-traded Bitcoin miners in North America.
Riot has deployed a fleet of 16,146 next-gen Bitcoin mining ASICs. The company plans to increase its fleet to +81,000 miners by the end of 2022.
This will dramatically improve Riot’s hash rate and enable it to better compete with Marathon Digital’s network.
This past May, Riot acquired Whinstone U.S, the owner-operator of North America’s single largest Bitcoin mining and hosting facility.
The ‘hosting’ aspect is interesting — Whinstone currently hosts mining operations for three institutional clients.
Clients choose Whinstone because of its energy management strategy that delivers best-in-class energy costs of 2.5 cents per kWh.
Cryptocurrency Stocks to Watch
There are a handful of private cryptocurrencies companies that might be going public soon.
Gemini, a crypto exchange founded by the Winklevoss Twins in 2014, is one of those companies eyeing an IPO.
In addition to their industry-leading security, Gemini has a crypto rewards credit card that pays out crypto instead of airline miles.
One of Gemini’s top competitors is BlockFi, a crypto company that has a robust trading platform, high-yield interest savings accounts, crypto-backed loans, and a bitcoin rewards credit card of their own.
Another company to watch is Stripe, a private fintech giant with a $100+ billion valuation.
Stripe ended its support for bitcoin in 2018, saying that it’s better at being an asset than a medium of exchange, but we don’t believe that to be the last chapter in the story.
This past June, Stripe’s president and co-founder John Collison said he and his company are “extraordinarily enthusiastic bitcoin fans.”
He added, “If you think of the kind of world that crypto people and we are trying to bring about, I think it’s a very related set of goals.”
In an interview with Cathie Wood of ARK and Jack Dorsey, Elon said that he has no plans to sell any of his bitcoin anytime soon.
However, a single tweet from Elon can send these currencies in either direction. For example, “Tesla will accept bitcoin as payment again” would likely have a positive impact on BTC’s price.
Alternative to Cryptocurrency Stocks
- Amplify Transformational Data Sharing ETF (BLOK)
- Siren Nasdaq NextGen Economy ETF (BLCN)
- Capital Link NextGen Protocol ETF (KOIN)
- First Trust Indxx Innovative Transaction & Process ETF (LEGR)
Getting exposure to crypto in the stock market has been the focus of this article, but don’t forget about the underlying asset.
If you believe in bitcoin enough to invest in secondary exposure, consider venturing into the crypto market and buying BTC outright. That’s the purest-play bet on the asset.
Alternative to cryptocurrency stocks’ really depends on why you want to invest in the space.
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Cryptocurrency Stocks FAQs
What is the best Crypto stock to buy?
Without a Bitcoin ETF, getting public market exposure to cryptocurrency requires some creativity. The best cryptocurrency stocks are Grayscale Bitcoin Trust (GBTC), Coinbase (COIN), Marathon Digital Holdings (MARA), Nvidia (NVDA), and MicroStrategy (MSTR).
Each of these provides exposure from a different angle. However, they are not as ‘pure-play’ as owning the underlying asset.
Which cryptocurrency should I invest in 2021?
Bitcoin has the best security and monetary policy of all the cryptocurrencies in circulation. This decentralization makes it more censorship-resistant because it does not have a single point of failure. We believe that most cryptocurrencies will eventually be ‘built on top’ of the Bitcoin network, which will bode well for BTC’s long-term price.
Ethereum is another cryptocurrency to consider for 2021.
Is it better to invest in crypto or stocks?
We recommend not to make this a binary decision — crypto or stocks. Instead, we recommend ‘getting off zero’ when it comes to crypto. Consider allocating 1-10% of your portfolio to bitcoin.
Bottom Line: Best Crypto Stocks
There are plenty of ways to benefit from crypto’s rise in the stock market.
The stocks mentioned in this article provide exposure from several different angles — and to varying degrees.
As crypto expands, so will your options in the public markets.
This article is for informational purposes only. It is not intended to be investment advice. To learn about how we chose the Best Crypto Stocks, read our editorial guidelines and public equities rating methodology.