Explore these top crypto stocks for exposure to digital assets.
All eyes are on cryptocurrencies‘ rises and falls as their popularity grows and investor interest continues to expand. Cryptocurrencies are more volatile than stocks, but that’s not necessarily a bad thing. With the crypto market just over a decade old, massive price swings have become a feature of the asset class. This volatility may pose a risk to some investors, but that shouldn’t deter them from investing in digital assets altogether. There are ways of gaining access to the buzzy investment opportunity without making a direct investment in a particular coin or token. Another way to gain exposure to crypto is by buying stocks that invest in crypto assets directly, support making the blockchain network more efficient or operate in the crypto market in some capacity. Here are seven popular stocks that are making waves in the crypto world.
MicroStrategy Inc. (ticker: MSTR)
MicroStrategy is a data analytics firm, but given its increasing allocation to crypto leader Bitcoin (BTC), investors may think of it as a proxy for Bitcoin. MSTR was the first publicly traded company to invest significant treasury assets in Bitcoin, and it holds more than 129,000 coins and counting, worth about $5 billion at a Bitcoin valuation of $40,000. It sees Bitcoin as a store of value, or a place to hold money in an asset that preserves its value over time. MicroStrategy hosted an event in January called “Bitcoin for Corporations” to discuss the benefits of incorporating Bitcoin into corporate initiatives. CEO Michael Saylor, an outspoken proponent of Bitcoin, was a keynote speaker at the event. Because MicroStrategy is financially linked to Bitcoin, shares of the company may fluctuate whenever there are Bitcoin price swings.
Tesla Inc. (TSLA)
Another public company that can be viewed as a Bitcoin play is electric vehicle innovator Tesla. It is clear that Tesla believes in the digital asset’s potential, since it holds a good chunk on its balance sheet. Tesla’s Bitcoin holdings are valued at more than $1 billion. Tesla also accepts the meme coin Dogecoin as payment for some merchandise on its website, although consumers can’t yet use DOGE to buy Tesla vehicles. Tesla CEO Elon Musk, the wealthiest person in the world, is a strong supporter of cryptocurrencies. He personally owns Bitcoin, Ether (ETH) and Dogecoin. For the average investor, purchasing shares of Tesla can be one way to get exposure to cryptocurrency without directly buying crypto.
Coinbase Global Inc. (COIN)
Coinbase is one of the most popular cryptocurrency exchanges in the world, and users can buy, sell and store their cryptocurrency on its platform. The company’s mission is to increase participation in the crypto economy, with customers ranging from individual investors to institutions, family offices and businesses. More than 89 million users across 100-plus countries use this crypto exchange. The company is focused on growing its digital products, investing in a series of crypto projects including Compound, BlockFi, Etherscan and others dedicated to creating an open financial system through digital assets. Cryptocurrency is still in the early stages of adoption and development, so Coinbase can be a solid long-term investment as the crypto market continues to grow.
Block Inc. (SQ)
Block (formerly Square) has a number of businesses, referred to as the company’s “building blocks,” aimed at creating economic empowerment for its users. That includes Square, which helps businesses accept quick and secure payments through Cash App, a mobile-payment service that allows users to transfer money; Spiral, a segment focused on open-source Bitcoin projects; Tidal, a global music and entertainment platform; and TBD, a decentralized peer-to-peer crypto exchange. Block CEO Jack Dorsey is a Bitcoin bull who sees the world’s most popular crypto as the currency of the internet. Investing in Block allows investors to put their dollars in a company whose executives are focused on strengthening the crypto ecosystem. For the full year 2021, Block delivered a gross profit of $4.4 billion, up 62% year over year. Block is focused on expanding into international markets and increasing engagement throughout its community of applications.
PayPal Holdings Inc. (PYPL)
A competitor to Square’s Cash App, PayPal is a global online payments system that allows money transfers and provides a variety of ways for people to get paid. Users can also buy and sell cryptocurrency on PayPal. Earlier this year, PayPal reportedly explored the development of its own stablecoin, potentially to be called PayPal Coin. Stablecoins are cryptocurrencies pegged to an underlying asset, such as the U.S. dollar, that help users manage volatility in crypto markets. PayPal also owns Venmo, another popular mobile payment service that lets users purchase digital assets such as Bitcoin, Ether and Litecoin (LTC). The platform’s crypto offerings are available to hundreds of millions of users.
Marathon Digital Holdings Inc. (MARA)
Marathon’s goal is to build one of the largest Bitcoin mining operations in North America. Crypto mining verifies transactions, secures the blockchain and enables new Bitcoins to come into the market. Marathon is on track to deploy 133,000 miners to increase its hash rate, or the computational power used to process transactions on the Bitcoin blockchain. The higher the hash rate, the better chance the miner has of completing the block and receiving a Bitcoin reward. The crypto mining company’s growth has been driven by its investment in miners to increase hash rate and make Bitcoin production more efficient. And Bitcoin mining is indeed a profitable operation, as the current block reward is 6.25 BTC per block, with blocks solved about every 10 minutes. Marathon also maintains a focus on sustainability and the environment by using renewable energy providers for its energy-intensive mining operations. It aims to be 100% carbon neutral by the end of 2022.
Nvidia Corp. (NVDA)
Investors looking for a long-term crypto stock play should consider Nvidia Corp. Nvidia is a graphics processing unit, or GPU, manufacturer, making chips to power devices consumers use every day. But much of its profitability comes from graphics cards made for gaming. As cryptocurrencies grew in popularity, Nvidia announced a new product: GPUs specifically for crypto mining. These devices are designed for professional miners to create more efficiency in mining operations. Nvidia has industry-leading graphics cards for crypto mining to allow for a high hash rate by using as little electricity as possible.
The best stocks for a foray into crypto investing:
— MicroStrategy Inc. (MSTR)
— Tesla Inc. (TSLA)
— Coinbase Global Inc. (COIN)
— Block Inc. (SQ)
— PayPal Holdings Inc. (PYPL)
— Marathon Digital Holdings Inc. (MARA)
— Nvidia Corp. (NVDA)
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7 Best Cryptocurrency Stocks to Buy originally appeared on usnews.com
Update 04/26/22: This story was published at an earlier date and has been updated with new information.
