Bitcoin and other cryptocurrencies are not traded like equities on Wall Street. Despite this, many firms with a public share price have significant ties to the cryptocurrency and digital asset markets. Stocks in cryptocurrency companies are shares in those companies. These companies are usually cryptocurrency exchanges, investors in cryptocurrency, or companies that make mining hardware.
Like any other stock, crypto stocks are subject to market volatility and fluctuations, which might lead to losses. However, stock investors who are already familiar with stocks and want some digital assets exposure may want to think about crypto stocks.
The cryptocurrency market is relevant to many different equities. Here are a few of the most widely-traded shares.
Public Companies With Cryptocurrency Exposure
MicroStrategy is a provider of business intelligence and analytics software. It has amassed a sizeable holding of Bitcoin (BTC), the first and currently most valued cryptocurrency. As of February 14th, MicroStrategy reported holding Bitcoin worth around $5.6 billion.
Coinbase Global Inc.
One of the significant cryptocurrency exchanges in the United States is Coinbase. When it went public on Wall Street in April 2021, it was the first cryptocurrency trading platform dedicated only to digital currency. Coinbase generates revenue through the trading of many digital currencies.
The company NVIDIA became well-known for its graphics cards. They are widely utilized in PC gaming. However, it has branched out into cryptocurrency mining using its technology in recent years.
Some cryptocurrencies can function without a central monetary authority. Thanks to the employment of this energy-intensive and potentially profitable accounting procedure. It involves the use of specialized equipment to solve complicated mathematical problems.
Marathon Digital Holdings Inc.
To acquire exposure to Bitcoin without purchasing it directly, investors might go to Marathon, another corporation actively interested in Bitcoin. Marathon generally spends part of its own money on Bitcoin mining and digital currency. Marathon estimated the company would have $357 million in Bitcoin by the end of 2021.
Silvergate Capital Corp.
Stock company Silvergate offers banking and other financial services to companies in the cryptocurrency industry. It provides a payment network for bitcoin exchanges, miners, and private equity firms.
Financial services and payment processor Block was initially known as Square. Its flagship Cash App product lets users invest in stocks and Bitcoin. The company has several other businesses that deal with blockchain technology and Bitcoin. According to Block, its digital asset holdings by the end of 2021 were valued at $318 million.
Riot Blockchain Inc.
Another Bitcoin mining firm is Riot Blockchain. The company claims its plant in Rockdale, Texas, is the biggest of its kind in the Americas. By 2021, the corporation claimed it had mined enough Bitcoin to hold 4,284 coins, valued at around $263 million.
Advanced Micro Devices Inc.
AMD, or Advanced Micro Devices, is a company that produces many types of computer hardware, notably GPUs. Many bitcoin miners rely on graphics processing units. The business claims that. In response to the growing popularity of cryptocurrency, demand for these items has skyrocketed.
CME Group Inc.
CME Group, Inc. (CME) is a financial services firm that operates clearinghouses and derivatives exchanges (thus the ticker symbol). Bitcoin and Ethereum, among other cryptocurrencies, are included in the scope of these services.
PayPal Holdings Inc.
One of the most important areas of progress in the cryptocurrency industry is digital payments. PayPal has been at the forefront of this field for a long time. In recent years, PayPal has integrated cryptocurrency payment and investment features into its PayPal and Venmo mobile applications.
Canaan and Hut 8 Mining
The process of mining Bitcoin has evolved dramatically over the last several years. Canaan, among others, now creates application-specific integrated circuit (ASIC) devices. The sole goal is brute-forcing the network’s correct hash (passcode).
For this hyper-specific purpose, Canaan’s next-generation Avalon ASICs are millions of times more potent than AMD and Nvidia’s latest GPUs. They can make tens of trillions of guesses per second for the correct hash to validate blocks on the Bitcoin network. Increased profitability for miners has led to a surge in demand. And the device’s low price and low energy usage have further helped fuel that demand.
For a while, Facebook’s parent company, Meta Platforms, sought to create a new cryptocurrency called Diem. Diem was designed to be an inclusive global payment and infrastructure platform for almost one-third of the world’s population who does not have access to traditional banking services.
Several problems arose throughout the project’s development. The most notable being the departure of such heavy hitters as Mastercard, Visa and PayPal from the original consortium. Since Bitcoin is still mostly unregulated, government officials voiced suspicion about Diem.
Meta finally sold Diem to Silvergate Capital in a stock-plus-cash transaction for around $200 million. Despite the change of ownership, development on the project is ongoing, and it has been claimed that Meta is looking at various cryptocurrency market entry strategies.
In addition to equities, options, rare metals, and cryptocurrencies, Robinhood Markets is a well-known discount brokerage software. The site is available around the clock and does not charge fees for buying or selling seven cryptocurrencies, including Ethereum, Bitcoin and Dogecoin. The business is now custodial for billions of dollars worth of crypto assets. Crypto trading income now accounts for a significant percentage of total revenues.
Tesla, a company that manufactures electric cars, disclosed to the SEC in a filing dated December 2020 that it had invested “an aggregate of $1.55 billion” in Bitcoin. In the first quarter of 2021, Tesla liquidated ten per cent of its Bitcoin assets. In order “to establish liquidity of Bitcoin as an alternative to maintaining cash on the balance sheet,” as stated by Elon Musk, the company’s CEO.
What’s Great About Crypto Stocks?
Most cryptocurrency equities are not “pure bets” on the business, which is excellent news for investors since it means they can diversify their portfolios widely. Companies exposed to the cryptocurrency market may see significant changes in revenue and profitability due to the currency’s extreme volatility. This makes public companies with exposure to the industry an ideal vehicle for investors with a lower risk appetite and a great way to get into crypto.
If you enjoyed this article, you may also like the following articles.
Check out the home page of Exploring Digital Assets for even more news, reports and market insights!
For media, content or writing inquiries please contact Patrick Hagerty at PatrickJHags@gmail.com