Investing in Bitcoin via corporate equities
In the dynamic world of finance, Bitcoin continues to make waves as a popular digital asset. For those interested in investing in Bitcoin but prefer a more traditional approach, there are several options available through publicly traded companies.
One such method is investing in public companies that hold Bitcoin as a treasury asset. Companies like Tesla, with approximately 9,720 Bitcoins in its digital asset portfolio, and Galaxy Digital Holdings, holding the equivalent of $357 million in Bitcoin, offer indirect exposure to Bitcoin ownership.
Another approach is buying shares of firms involved in Bitcoin mining, crypto exchanges, or blockchain technology development. Companies such as Marathon Digital Holdings, which produced 10,999 bitcoins in 2023 and holds an additional 8,090 unrestricted bitcoins, or semiconductor giants like Nvidia or AMD, provide exposure to cryptocurrency mining as well as other major technological trends.
Investors can also consider purchasing shares of recently listed crypto-focused companies, like cryptocurrency-trading platforms going public, which offers exposure to the crypto trading ecosystem.
For those who prefer a more direct approach, using ETFs or grantor trusts that invest directly in Bitcoin or futures on Bitcoin can be an option. Though this is not stock of individual companies, it's a widely accessible way for public market investors to gain Bitcoin exposure.
Some publicly traded companies use active treasury management strategies involving Bitcoin and other crypto assets, creating indirect Bitcoin exposure through their securities. Companies heavily exposed to Bitcoin and other cryptos can experience significant stock volatility, as seen in recent sharp price declines during Bitcoin market corrections.
Beyond mining and trading, payment companies like Square Inc., which has invested $50 million in Bitcoin and further $170 million, bringing their total Bitcoin holding to approximately $420 million, offer payment services in crypto-assets. Google is also planning to accept crypto payments for its cloud service starting in 2023.
Brokerage companies like Block (formerly Square) and PayPal, showing interest in the crypto industry, allow investors to buy and sell bitcoins and other financial assets. Investing in these companies could be a good option for those who want exposure to Bitcoin while also benefiting from the growth of other tech sectors, like artificial intelligence or video games.
The adoption of crypto payments is still limited and depends on many factors, such as regulation or changes in consumer habits. However, with over 35 public companies now holding at least 1,000 BTC each, collectively worth over $116 billion, growing corporate Bitcoin adoption signals increased institutional interest.
In summary, investors seeking Bitcoin exposure via stocks should consider companies with significant Bitcoin holdings, those operating in the crypto ecosystem, crypto-trading platform stocks, or Bitcoin-related ETFs and trusts, while being mindful of higher volatility risk associated with these equities.
[1] Source: https://www.theblockcrypto.com/linked/114991/over-35-public-companies-now-hold-at-least-1000-bitcoin-each-collectively-worth-over-116-billion [2] Source: https://www.investopedia.com/terms/b/bitcoin-etf.asp [3] Source: https://www.forbes.com/sites/billybambrough/2021/05/19/the-most-volatile-stocks-on-the-market-right-now-are-the-biggest-bitcoin-miners/?sh=5627b283204a [4] Source: https://www.theblockcrypto.com/linked/114991/over-35-public-companies-now-hold-at-least-1000-bitcoin-each-collectively-worth-over-116-billion [5] Source: https://www.bloomberg.com/news/articles/2021-05-17/bullish-crypto-exchange-to-raise-1-billion-in-ipo-led-by-merchant-bankers
- For individuals who prefer a mix of traditional finance and technology, investing in companies like Tesla, Galaxy Digital Holdings, Marathon Digital Holdings, and those involved in cryptocurrency mining, crypto exchanges, or blockchain technology development provides indirect exposure to Bitcoin ownership and exposes investors to major technological trends.
- Alongside companies heavily invested in Bitcoin, firms offering cryptocurrency-related services such as Square Inc., PayPal, and recently listed crypto-focused companies provide opportunities for individuals to gain exposure to both Bitcoin and the growth of the technology sector, while remaining within the realm of public market investments.
