5 Stocks That Give You Indirect Exposure to Bitcoin

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Bitcoin, the pioneer of cryptocurrencies, has taken the financial world by storm in recent years. Its meteoric rise in value and increasing adoption have piqued the interest of investors worldwide.

While investing directly in Bitcoin can be enticing, it also comes with significant volatility and regulatory uncertainty. For those seeking a more indirect and potentially less risky way to gain exposure to Bitcoin’s potential upside, there are several stocks worth considering. In this article, we will explore five such stocks that offer indirect exposure to the world of cryptocurrencies.

Samara Asset Group

Samara Asset Group (Samara AG) is a bitcoin asset management and venture capital company that helps institutions and individuals to access investment opportunities and gain exposure to the Bitcoin industry through buying their stocks.

The company believes that the future of finance lies in decentralization and democratization, empowered by Bitcoin. Their mission is to help realize this future by investing in the best emerging asset managers, Bitcoin builders and Bitcoin use cases.

MicroStrategy Inc. (MSTR)

MicroStrategy Inc. is a well-established business intelligence company that has made headlines for its aggressive approach to Bitcoin investment. The company has been steadily accumulating Bitcoin on its balance sheet, viewing it as a long-term store of value.

Michael Saylor, MicroStrategy’s CEO, has become a vocal advocate for Bitcoin and has stated that the company’s primary treasury reserve asset is now Bitcoin. By investing in MSTR, investors can indirectly gain exposure to Bitcoin’s price movements through the company’s substantial holdings.

MicroStrategy’s stock price has exhibited a strong correlation with Bitcoin’s performance, making it a reliable option for those seeking indirect exposure to the cryptocurrency market. However, it’s essential to note that MicroStrategy’s stock is not a pure play on Bitcoin, as the company’s core business is still centered around business intelligence and analytics solutions.

Square Inc. (SQ)

Square Inc., founded by Twitter CEO Jack Dorsey, is a fintech company that has been actively involved in the cryptocurrency space. Square’s Cash App allows users to buy, sell, and store Bitcoin, making it an accessible platform for retail investors to enter the crypto market. Additionally, Square announced in October 2020 that it had invested $50 million in Bitcoin, further solidifying its commitment to the cryptocurrency.

By investing in Square, investors can indirectly participate in the growth of Bitcoin adoption, as the company’s fortunes are closely tied to the success of its Cash App and related cryptocurrency services. Square’s stock has exhibited a positive correlation with Bitcoin’s performance, and its strategic moves in the crypto space make it an attractive option for those seeking indirect exposure.

Coinbase Global Inc. (COIN)

Coinbase Global Inc. is one of the most prominent cryptocurrency exchanges globally and offers a platform for buying, selling, and storing various cryptocurrencies, including Bitcoin. While Coinbase’s stock is not directly correlated with Bitcoin’s price movements, it provides indirect exposure to the broader cryptocurrency market. As more investors and institutions flock to the crypto space, Coinbase stands to benefit from increased trading volumes and fees.

Coinbase went public in April 2021, marking a significant milestone for the cryptocurrency industry. Since then, its stock has been subject to market sentiment and regulatory developments, in addition to the overall performance of the crypto market. As a publicly traded cryptocurrency exchange, Coinbase offers a unique way to gain indirect exposure to the growing adoption of Bitcoin and other cryptocurrencies.

Riot Blockchain Inc. (RIOT)

Riot Blockchain Inc. is a company focused on cryptocurrency mining, primarily Bitcoin. Mining involves using powerful computers to solve complex mathematical problems, which, when solved, validate transactions on the Bitcoin network and add them to the blockchain. In return for their efforts, miners receive newly minted Bitcoins and transaction fees.

By investing in Riot Blockchain, investors gain indirect exposure to Bitcoin’s price movements through the company’s mining operations. As the price of Bitcoin rises, mining becomes more profitable, potentially leading to increased revenue and profitability for companies like Riot. However, it’s essential to understand that the stock price of mining companies can be highly volatile and influenced by factors beyond Bitcoin’s price, such as mining difficulty and energy costs.

Grayscale Bitcoin Trust (GBTC)

Grayscale Bitcoin Trust (GBTC) is a trust that holds Bitcoin on behalf of its investors. GBTC allows investors to gain indirect exposure to Bitcoin’s price movements without needing to manage private keys or directly purchase and store the cryptocurrency. GBTC’s shares are traded on the OTC (Over-the-Counter) market, making them accessible to a wide range of investors.

Investing in GBTC can be a convenient way to gain exposure to Bitcoin, but it’s essential to be aware of the trust’s premium or discount to the underlying Bitcoin price. GBTC’s shares often trade at a premium, meaning investors may pay more than the net asset value of the Bitcoin held by the trust. This premium can fluctuate based on market sentiment and demand for the shares.

Conclusion

While direct investments in Bitcoin can be highly profitable, they also come with substantial risks and volatility. For investors seeking a more indirect and diversified approach to gain exposure to the cryptocurrency market, the five stocks and trusts mentioned above offer compelling alternatives.

These options provide access to the growing world of Bitcoin and cryptocurrencies while allowing investors to leverage the expertise and infrastructure of established companies in the financial and blockchain industries. However, it’s crucial to conduct thorough research and consider your risk tolerance before making any investment decisions in this rapidly evolving space.

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