For many years, the crypto market has been an interesting investment alternative for private investors. In the middle of the year 2021, more than 10,800 cryptocurrencies with a market capitalization of over 1.40 trillion US dollars existed worldwide. The most popular cryptocurrencies are still Bitcoin and Ethereum.
However, the hype surrounding digital currencies has gradually spilled over to the stock market in recent months and years. Thus, there is now a plethora of stocks that are either directly or at least indirectly involved with the crypto market or could profit from it. The most successful of them are in direct or indirect contact with the world's largest cryptocurrency, bitcoin. These are therefore also referred to as "Bitcoin stocks". The following sections will therefore deal with the topics of Bitcoin stocks as well as the handling of and opportunities with this new share class.
What are bitcoin stocks?
If you do not want to invest directly in cryptocurrencies, but still want to profit from the prevailing hype around Bitcoin and Co. for example, you can invest in so-called "Bitcoin shares". These are shares in which the companies behind them have based their business model either directly or indirectly on the best-known cryptocurrency, Bitcoin.
What might that be, for example? The following core businesses deal either directly or indirectly with bitcoin:
- Service provider in the field of mining bitcoins
- Bitcoin trading & storage (crypto trading platforms or crypto wallets).
- Patent trade
- Sale of equipment in the field of mining bitcoins
- Online platforms with bitcoin as a payment option
- Software development and trade
In the following subsections, we would also like to go into more detail about the extent to which Bitcoin stocks represent a real alternative to direct crypto investments and would like to show you all the advantages of Bitcoin stocks in a clear manner.
Bitcoin stocks as an alternative to cryptocurrencies?
Although bitcoin offers exciting investment potential, it is also considered to be extremely risky and volatile. Between 2020 and 2021, its value fluctuated between 10,000 and a maximum of around 55,000 euros. For many private investors, bitcoin itself is therefore rather unsuitable as an investment object. However, the situation is different with Bitcoin shares. These profit directly or indirectly from the ups and downs of the world's most popular cryptocurrency. And are thus partly more independent of the Bitcoin price!
Examples of this could be payment service providers or online trading platforms with Bitcoin as a payment option. Their business flourishes regardless of the respective Bitcoin exchange rate. The supply of important equipment for mining Bitcoins has also experienced a constant influx over the past few years - even the temporary drops in the Bitcoin price have not been able to affect this. And, quite apart from that: Bitcoin shares offer attractive dividends in some cases!
All advantages of Bitcoin shares at a glance
Cryptocurrencies are often much more suitable for individual investments or speculations for potential private investors. Therefore, we would like to summarize the comprehensive advantages of Bitcoin shares in a small table:
Advantages of Bitcoin Shares:
- Less volatile than cryptocurrencies
- lower risk than cryptocurrencies
- versatile business models
- recurring revenues from patents, software, etc.
- Utilization of bitcoin-savvy target group
- could also profit from the hype of other coins
- sometimes attractive dividends
Bitcoin stock disadvantages:
- Share prices of companies with bitcoins as reserves are more dependent on bitcoin price
- Dangerous cluster risk if crypto market should ever completely disintegrate
Active and passive investing in bitcoin stocks
Of course, there is a wide range of trading options available to you for Bitcoin shares as well. You can invest in them for the long term via a savings plan or build up larger positions of these shares via individual purchases. Most online brokers now offer a wide range of Bitcoin stocks that you can easily save for. The approach of long-term investing is also called passive investing.
Alternatively, Bitcoin shares can of course also be used for short-term speculation. For this purpose, Bitcoin stock CFDs are available, which can even be traded leveraged. Thanks to "long" as well as "short" orders, you can speculate on rising as well as falling prices here. Note, however, that CFDs are highly speculative financial instruments that carry the risk of a total loss at any time! Short-term trades and speculations, on the other hand, are referred to as active trading.
The 10 Best Bitcoin Stocks to Profit from the Crypto Boom
In this chapter, we would like to give you the 10 best Bitcoin stocks that are currently benefiting above average from the ongoing Bitcoin trend. These are the following stocks:
- Coinbase [ISIN: US19260Q1076]
- MicroStrategy [ISIN: US5949724083]
- Nvidia [ISIN: US67066G1040]
- AMD [ISIN: US0079031078]
- Bitcoin Group [ISIN: DE000A1TNV91]
- Square [ISIN: US8522341036]
- Microsoft [ISIN: US5949181045]
- Riot Blockchain [ISIN: US7672921050]
- Shopify A [ISIN: CA82509L1076]
- Robinhood [ISIN: US7707001027]
In the subsections that follow now, we would like to describe each Bitcoin stock in more detail.
Coinbase [ISIN: US19260Q1076]
Coinbase is a US-based trading platform for cryptocurrencies that offers Bitcoin as well as other cryptocurrencies such as Ethereum, Litecoin, Ripple and Bitcoin Cash. Cryptocurrencies can be traded as well as stored and received here. The company made a turnover of 7.84 billion US dollars and over 3 billion US dollars in profit in the fiscal year 2021.
MicroStrategy [ISIN: US5949724083]
MicroStrategy is a multinational software manufacturer that was founded in 1989 and currently employs almost 2,600 people. The company made $450 million in revenue last fiscal year and offers business intelligence solutions and online analytical processing tools that are increasingly being used in the crypto space. The company currently has reserves of 114,000 Bitcoins and is the first major company to pay its board members purely in Bitcoin.
Nvidia [ISIN: US67066G1040]
Nvidia Corporation is one of the largest developers of graphics processors and chipsets in the world. The processors and chips are now also used in the mining of Bitcoins, which is why the company is currently experiencing a huge hype. Its annual revenue was around $16.70 billion in fiscal 2020. Nvidia employs around 19,000 people worldwide.
AMD [ISIN: US0079031078]
AMD (or also: "Advanced Micro Devices") is a US-American high-tech company that specializes in the manufacture and development of semiconductor products. These include, for example, microchips, graphics processors and other hardware solutions that are also used in Bitcoin mining. The company currently employs around 11,400 people around the world and achieved a turnover of around 9.80 billion US dollars in the 2020 financial year.
Bitcoin Group [ISIN: DE000A1TNV91]
Bitcoin Group operates its own crypto trading platform under the domain "bitcoin.de" and is thus considered the best-known of its kind in the German-speaking world. The company generated sales of 12 million euros in calendar year 2020 and currently employs around 30 people .
Block (formerly Square) [ISIN: US8522341036]
Square is a U.S. financial services and mobile payments company that offers a variety of software and hardware products, including crypto. The company currently has around 30 million active users and generated revenues of around $9.50 billion in fiscal year 2020.
Microsoft [ISIN: US5949181045]
Microsoft Corporation is an international software and hardware company and one of the largest companies in the world with around 182,000 employees and an annual turnover of 168 billion US dollars. In terms of Bitcoin hype, it offers various software and hardware products and is currently experiencing incredible hype, not least because of this.
Riot Blockchain [ISIN: US7672921050]
Riot Blockchain is a US-based bitcoin mining company that operates extensive server landscapes and infrastructure for mining bitcoins. Through its IPO, the company launched a funding round to scale its business model based on mining and trading Bitcoins.
Shopify A [ISIN: CA82509L1076]
The Canadian company Shopify is one of the world's largest e-commerce companies and specializes in offering a wide variety of consumer products, which are offered by small and medium-sized retailers on the platform. Shopify also allows payments and Bitcoin and is currently very hyped not least because of this. The company employs more than 7,000 people and generated $1.58 billion in revenue in fiscal 2019.
Robinhood [ISIN: US7707001027]
Robinhood (actually: "Robinhood Markets") is a US financial services company that operates a trading platform for various financial products (including Bitcoins and other cryptocurrencies). The company is currently experiencing strong growth, particularly in terms of bitcoin trading, and currently has around 31 million users worldwide. The company employs around 1,300 people and generated revenues of around USD 959 million in the 2020 financial year.
Will the Bitcoin price remain volatile?
Many private investors are currently deterred from investing in the cryptocurrency Bitcoin. The reasons for this can be the repeatedly collapsing prices of the Bitcoin. Enclosed is a short overview that shows the volatility of the Bitcoin quite well. This goes into the respective high and low prices of the Bitcoin of the last calendar years:
|Year||Highest price in €||Lowest price in €|
Rising energy prices and the fear of increasing inflation will continue to cause prices to fluctuate strongly. On the one hand, there is great demand, on the other hand, this is repeatedly cancelled out by external influences.
Are there also ETFs on bitcoin stocks?
Unfortunately, ETFs that track a basket of Bitcoin shares do not yet exist. However, so-called Bitcoin ETCs (or also: "Exchange Traded Cryptocurrencies") offer an interesting alternative. These either track the price development of the Bitcoin or a basket consisting of various cryptocurrencies. They are available either physically or synthetically replicating. Unlike buying bitcoins, you don't have to deal with the technical challenges of crypto trading here. However, in the first case, the strong volatility of bitcoin remains.
Conclusion on "Which Bitcoin Stocks Will Benefit from the Crypto Boom?"
Bitcoin shares are an interesting alternative for many private investors. In many places, Bitcoin stocks are also high-quality blue chips such as Microsoft or AMD, which have been performing well for years anyway. In addition, a number of interesting tech stocks are currently emerging that can be a worthwhile addition to an individual portfolio.
FAQs about bitcoin stocks:
These are shares of companies whose business model is either directly or indirectly focused on the cryptocurrency Bitcoin.
Currently, corresponding representatives can be found above all in e-commerce, in the software and hardware industry, in financial services and in the Bitcoin mining industry.
Bitcoin shares are usually not as volatile as bitcoin, offer dividends, and are less complicated to trade or store.
The purchase of Bitcoin shares can be realized via a normal online broker. Many providers now even offer you savings plans on Bitcoin shares.
Because the products and services of the companies behind the Bitcoin shares are currently experiencing a very high demand. At the same time, more and more investors are also investing in this type of shares (because presumably their level of awareness is also currently rising sharply due to the Bitcoin hype).