Do you want to gain exposure in crypto, but can’t be bothered with the intricacies of holding your wallet and keys? Are you more comfortable trading in traditional markets or exchanges? Don’t worry, we got you covered. Several publicly traded investment instruments may mirror the movement of cryptocurrencies due to their underlying assets or the nature of their business.
Buying Crypto vs. Stocks
When investors say that they want to invest in cryptocurrencies, they usually mean buying Bitcoin or any altcoin in decentralized or centralized exchanges. It may also mean converting fiat money to stablecoins, like USDT or USDC. The investor is also tasked with keeping the assets securely in a preferred wallet type. Centralized exchanges can also custody assets, but the implosion of FTX taught investors that self-custody is better. However, the complexities of maintaining a crypto wallet are too daunting for some.
On the other hand, buying stocks involves signing up with a broker-dealer, transferring money, and, simply buying or selling. One big difference is that the responsibility for keeping your stocks safe lies with your broker-dealer. Unlike digital assets platforms, there is no need to convert your money to stablecoins. Some investors also feel safer that they are holding stock shares, instead of cryptocurrency tokens.
Buy a Piece of a Crypto Exchange
If buying crypto is too complicated, then consider buying shares of a cryptocurrency exchange.
- Coinbase (NASDAQ: COIN). Coinbase is a publicly traded company and is the largest digital asset exchange in the US. It was founded in 2012 and is headquartered in San Francisco, California. It has $128 billion worth of assets in the platform and operates in more than one hundred countries. Despite regulatory hurdles from the SEC, the company still exceeded estimates and posted earnings of $707.9 million in the second quarter of 2023.
- Robinhood (NASDAQ: HOOD). Robinhood is a US financial services company that offers commission-free trading of stocks, options, ETFs, and cryptocurrencies. Users can trade several crypto assets, including Bitcoin, Ethereum, and Litecoin. As of June 2023, Robinhood posted a total of more than $28 billion in assets. The total net revenue for Q2 2023 was $486 million.
Don’t Mine, Buy the Miners.
Bitcoin mining is the process of validating and recording transactions on the network. This is done by a network of specialized computers trying to solve a mathematical problem or “hash puzzle” and in doing so it creates a new block in the chain. The mining rigs are rewarded with Bitcoin for every problem solved.
Several companies have invested in creating “mining farms” to earn BTC. These companies earn more when the price of the number one digital asset increases. However, they also lose money when the price drops too much. They also try to put up their operations in places where electricity is cheap since mining rigs use up a lot of power.
Some publicly traded companies that deal with crypto mining:
- Marathon Digital Holdings (NASDAQ: MARA). A U.S.-based company that mines Bitcoin and other cryptocurrencies using renewable energy sources. It has eight mining facilities. The company also holds more than 12,900 BTC in its treasury, which is currently worth more than $337 million.
- Riot Platform Inc (NASDAQ: RIOT). The company’s Rockdale Facility consists of the single biggest Bitcoin mining and hosting facility in North America. According to the 2023 Q2 report, the company holds 7,265 BTC. Riot spends $8,389 to mine a Bitcoin, which means the profit is around 70%.
- Hut 8 Mining Corp. (NASDAQ: HUT). Hut 8 is a Canadian Company that mines and holds BTC using a mix of low-cost and renewable sources of energy. It owns more than 9,000 Bitcoins.
Publicly Traded Funds with Crypto as Underlying Assets
Several publicly traded funds have cryptocurrencies as the underlying assets.
- Grayscale Bitcoin Trust (OTCMKTS: GBTC) is probably the most popular cryptocurrency fund. It holds more than 640,000 BTC, which is currently worth more than $16 Billion. It was created in 2013 to allow investors to have exposure to Bitcoin without holding it directly. Grayscale recently won a court case versus the SEC.
- Bitwise 10 Crypto Index Fund (OTCMKTS : BITW). According to Bitwise, their Index fund is a secure way to get diversified exposure to Bitcoin and leading cryptocurrencies. “The Fund seeks to track an Index comprised of the 10 most highly valued cryptocurrencies, screened and monitored for certain risks, weighted by market capitalization, and rebalanced monthly. “
- Osprey Bitcoin Trust (OTCMKTS: OBTC). The fund advertises itself as a simple and secure way to gain Bitcoin exposure. OBTC has a management fee of just 0.49% which is one of the lowest in the market.
Other Publicly Traded Companies with Crypto Exposure:
- MicroStrategy (NASDAQ: MSTR) is a publicly traded company that provides business intelligence, mobile software, and cloud services. Its co-founder Michael Saylor is a known Bitcoin bull. He navigated the company to hoard BTC. Microstrategy currently holds 152,800 BTC.
- Galaxy Digital Holdings Ltd (TSX: GLXY) is a finance and investment management firm that focuses on the digital assets sector. It has $2.5 billion of assets under management. It was founded in 2018 by Michael Novogratz, a known investor in the industry.
There Are Many Ways to Invest in the Digital Assets Industry
Investing in cryptocurrencies does not necessarily mean buying and holding BTC and altcoins. Several funds and companies hold a substantial amount of digital assets.
We also have to remember that crypto is supported by a multitude of industries. There are several companies engaged in crypto mining. These miners buy specialized computing rigs that are produced by a separate industry. Chips makers like Nvidia and AMD also have indirect exposure to crypto because their products are used in crypto mining.
Crypto assets are very volatile. Its erratic movements are not for the faint of heart. You can earn generational wealth or wipe your life savings in one day. Consider buying publicly traded assets if you still want exposure and lesser risks. Sometimes it is better to leave the investing to professionals.
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument.
