Cryptocurrencies and Bitcoin in particular have experienced enormous gains since the beginning of the year. While many people are interested in investing in this space, there are some concerns about investing in actual bitcoins or other electronic currencies. Some of these concerns include:
There are ways to gain bitcoin exposure through instruments that can be bought with your traditional brokerage. These instruments range in size and volatility.
As the prices of cryptocurrencies increase, there is more of a demand to mine them. Companies that produce instruments to mine these currencies will benefit from an increase in demand.
Nvidia (NASDAQ:NVDA) – Nvidia is perhaps the largest company that has a direct relation to the price of cryptocurrencies at a market capitalization of almost $100 billion. Nvidia has actually said publicly that cryptocurrencies have benefited the company. Nvidia CEO Jen-Hsun Huang said crypto is “a very important market that will likely continue to grow over time.”
NVDA has been very highly correlated with Bitcoin in 2017.
Advanced Micro Devices (NASDAQ:AMD) – AMD, another GPU producer, has benefited from the rise of cryptocurrencies. The popularity of mining cryptocurrencies, especially Ethereum, has increased demand for AMD’s graphics cards. AMD’s products have generally had the best reputation for mining cryptocurrencies.
Surprisingly, AMD and Bitcoin have had only a slightly positive correlation in 2017.
There are a handful of large companies that accept bitcoin as a payment for their products and services. It would make sense that as the price and popularity of bitcoin rises, companies that accept it as a payment would benefit. Some of these companies are Shopify (NYSE:SHOP), Overstock (NASDAQ:OSTK), Dish Network (NASDAQ:DISH), and Microsoft (NASDAQ:MSFT).
There are various stocks trading in the OTC markets that are more directly related to bitcoin and electronic currencies. It is important to note that these stocks are very risky.
MGT Capital Investments (OTCPK:MGTI) – MGT Capital Investments was for the most part a cybersecurity company, but more recently it has invested in the cryptocurrency space. MGTI has taken an interest in mining both Bitcoin and Ethereum. On May 22nd, MGT Capital Investments announced a major expansion of its bitcoin mining operations. On June 23rd, MGTI launched a pilot program to mine Ethereum. On August 25th, the company announced that it would add over 1,000 more mining computers. MGT Capital Investments is set to be one of the largest bitcoin producers in North America.
A large portion of MGTI’s price can be explained by movements in the price of bitcoin.
Bitcoin Services, Inc. (OTCPK:BTSC) – Bitcoin Services, Inc. offers various bitcoin services. There are three main operations of the company. The first operation is offering a bitcoin escrow service. The company also engages in bitcoin mining and the development of blockchain software.
BTSC is obviously very correlated with the price of bitcoin.
BTCS, Inc. (OTCQB:BTCS) – BTCS considers itself the first pure play U.S. public company focused on blockchain technologies. BTCS has stated that in 2017 its goal is to broaden its digital assets and focus on mining.
BTCS certainly is correlated with bitcoin, but includes a very high level of volatility. Note: Data is from March 13th forward.
Global Arena Holding (OTCPK:GAHC) – Global Arena Holding is a company focused on acquiring technologies, patents, and companies relating to blockchain technology. Global Arena Holding has two subsidiaries: GAHI Acquisition Corp. and Global Election Services.
GAHC has a very clear and strong correlation with the price of bitcoin.
There is currently a lack of exchange traded funds that track bitcoin. This may change in the very near future though.
VanEck Bitcoin Fund – VanEck has filed for a bitcoin ETF and, if approved, it would be the first of its kind. This is a big IF though, because the Winklevoss Bitcoin ETF was rejected by the SEC earlier this year. VanEck may also have some competition when it comes to opening the first bitcoin ETF.
Grayscale Bitcoin Investment Trust (OTCQX:GBTC) – The investment trust holds bitcoins and can be traded on your typical broker. I would be wary of OTCQX:GBTC though, because of the fact it trades at a premium.
Bitcoin Futures – The Chicago Board of Exchange (CBOE) recently announced that it would be introducing bitcoin derivatives.
The nature of bitcoin and the process of buying bitcoin are much different than traditional investments. This does not prevent traditional investors from gaining exposure to bitcoin in their brokerage accounts though. There are a handful of stocks available to investors that give different levels of exposure to bitcoin and have varying degrees of risk. Stocks like NVDA and AMD are larger companies that offer some exposure to cryptocurrencies while being relatively less risky. OTC stocks like MGTI, BTSC, BTCS, and GAHC offer the ability to leverage the price of bitcoin, but are extremely volatile and risky.
Disclosure: I am/we are long BTSC, MGTI.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: The OTC stocks mentioned in the article are very volatile and risky due to the nature of OTC markets. Investors should take special consideration before investing in these stocks.The graphs in this article were generated using Excel with the data coming from Quandl and Yahoo Finance.
Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
Read the original here:
How To Gain Bitcoin Exposure Inside Of Your Traditional Brokerage Account – Seeking Alpha
- Bitcoin's incredible surge takes it above $9,500 - Nov. 27 ... - November 27th, 2017
- Warning Signs About Another Giant Bitcoin Exchange - November 23rd, 2017
- What Is Bitcoin, and How Does It Work? - The New York Times - October 6th, 2017
- Why Beanie Babies make for a better investment than bitcoin - MarketWatch - September 5th, 2017
- Bitcoin's price hit $5000 last week. It's still a dumb investment - Los Angeles Times - September 5th, 2017
- Bitcoin dips another $300 after China's cryptocurrency crackdown - CNBC - September 5th, 2017
- IRS Eyes Profits From Bitcoin and Bitcoin Cash Investments - Investopedia - September 5th, 2017
- Sequoia, IDG to Invest in China Bitcoin Mining Giant - Bloomberg - September 4th, 2017
- Bitcoin Price Drops By Over $250 as Crypto Markets Lose Billions - CoinDesk - September 4th, 2017
- Bitcoin $5,000: Currency Hits New Record High | Fortune.com - Fortune - September 2nd, 2017
- Bitcoin Drops Below $5000 as Crypto Markets See $13 Billion Sell-Off - CoinDesk - September 2nd, 2017
- Searching for the future of currency, major companies try Bitcoin technology - PBS NewsHour - September 2nd, 2017
- Bitcoin Mempool is Empty and High Transaction Fees are no Longer Required - newsBTC - September 2nd, 2017
- Literally just one huge chart showing bitcoin's incredible rise to $4800 - MarketWatch - September 2nd, 2017
- Bitcoin's nearly five-fold climb in 2017 looks very similar to tech ... - CNBC - September 2nd, 2017
- BTC-e's Big Claim: Bitcoin Withdrawals to Begin Tomorrow - CoinDesk - CoinDesk - September 2nd, 2017
- As bitcoin surges in price and popularity, so do the complaints - CNBC - August 31st, 2017
- Here is how Indians are minting a fortune in bitcoins - Economic Times - August 31st, 2017
- Why Miners Are Mining Bitcoin Cash and Losing Money Doing It - CoinDesk - August 30th, 2017
- Bitcoin jumps nearly 70% for August to record high, offshoot 'bitcoin cash' falls to more than one-week low - CNBC - August 30th, 2017
- Bitcoin Foundation seeks legal protection from US currency regulation - The Independent - August 30th, 2017
- Bitcoin's epic rise leaves late-1990s tech bubble in the dust - Economic Times - August 30th, 2017
- 99Bitcoins | Buy Bitcoin, Bitcoin Guides & Reviews for ... - August 29th, 2017
- Dark web finds bitcoin increasingly more of a problem than a help, tries other digital currencies - CNBC - August 29th, 2017
- Bitcoin Meets Zcash: Developers Test Tool for Trustless Trades - CoinDesk - August 29th, 2017
- Russian Regulator: Bitcoin Should Be Limited to 'Qualified Investors' - CoinDesk - August 29th, 2017
- As bitcoin and rivals surge, so too have complaints to the CFPB - MarketWatch - August 29th, 2017
- Is Bitcoin the New Gold? - TheStreet.com - August 28th, 2017
- This Swedish guy bet all his life savings on bitcoin and it made him 100 times richer - Business Insider Nordic - August 28th, 2017
- Value of all digital currencies hits record around $160 billion as ... - MarketWatch - August 28th, 2017
- Why Motherboard Is Capitalizing 'Bitcoin' Again - Motherboard - August 28th, 2017
- New Bitcoin.com Charts: The Bitcoin Ecosystem at a Glance - Bitcoin News (press release) - August 27th, 2017
- Expert Predicts Bitcoin Will be Worth up to $20000 in the Next Three Years - Futurism - August 27th, 2017
- Does Bitcoin Have a Mining Monopoly Problem? - Fortune - August 27th, 2017
- Bitcoin poised to challenge record after recovering from correction - MarketWatch - August 26th, 2017
- Bitcoin Prices Rise But Fall Short of All-Time High - CoinDesk - CoinDesk - August 26th, 2017
- Bitcoin and Artificial Intelligence Can Help Fight Sex Trafficking ... - Fortune - August 26th, 2017
- Bitcoin Investors, Beware: The IRS Is Coming for Your Vast Riches - TheStreet.com - August 26th, 2017
- Bitcoin's Lightning Network Moves Closer to Compatibility - CoinDesk - CoinDesk - August 26th, 2017
- A sketchy Satoshi has popped up to promote his new blockchain - The Verge - August 26th, 2017
- Bitcoin And Why You Think You're Right (Even When You're Wrong) - Seeking Alpha - August 26th, 2017
- Bitcoin and Ether rise, helping take crypto space above $150 billion market cap - MarketWatch - August 23rd, 2017
- Bitcoin Prices Are Up Over $100 Already Today - CoinDesk - August 23rd, 2017
- MGT Capital Raises $2.4 Million to Expand Bitcoin Mining Operation - CoinDesk - August 23rd, 2017
- Hackers Swipe Bitcoin by Stealing Your Cell Phone Number First - Inc.com - August 23rd, 2017
- Bitcoin rebounds after briefly entering correction territory - MarketWatch - August 22nd, 2017
- Here's Why Bitcoin Rose More than $1000 in Two Months - Futurism - August 22nd, 2017
- The IRS Has Special Software to Find Bitcoin Tax Cheats - Fortune - August 22nd, 2017
- Bitcoin Prices Dip Below $4000 to Hit 7-Day Low - CoinDesk - August 22nd, 2017
- China's two biggest bitcoin exchanges helped themselves to $150 million in idle client funds - Quartz - August 22nd, 2017
- Bitcoin Analysts Compete for the Highest Price Forecast - Bloomberg - August 21st, 2017
- A Bitcoin Law for Every State? Interest and Animosity Greet Model US Regulation - CoinDesk - August 21st, 2017
- Take Two: Bitcoin Miner BTCS Announces New Merger Deal - CoinDesk - August 21st, 2017
- Bitcoin About To Burst - Seeking Alpha - August 21st, 2017
- 10 Bitcoin Wallet Apps You Should Consider Using Today - HuffPost - August 20th, 2017
- Bitcoin-accepting shops leave cookie trail that crumbles anonymity - The Register - August 20th, 2017
- Bitcoin Trades Sideways as Bitcoin Cash Price Drops to $800 - CoinDesk - August 20th, 2017
- 'Bitcoin cash' surges 40% in single day as investors bet on its faster processing speeds - CNBC - August 19th, 2017
- 'Bitcoin cash' soars to record high above $900 as 'mining' profits jump - CNBC - August 19th, 2017
- Photos: Inside one of the world's largest bitcoin mines - Quartz - August 18th, 2017
- Bitcoin Surged to a New High Adding $17 Billion in Just Over a Week - Fortune - August 18th, 2017
- Another major country joins China and Japan in cracking down on bitcoin exchanges - CNBC - August 18th, 2017
- Bitcoin Cash Breaks Price Doldrums to Push Past $400 - CoinDesk - August 18th, 2017
- Poloniex and Breadwallet Will Support Bitcoin Cash Transfers - The Merkle - August 14th, 2017
- Bitcoin Price Flies To More Than $4100 Over Weekend - PYMNTS.com - August 14th, 2017
- Why is Bitcoin worth more than gold? - Independent Online - August 14th, 2017
- Bitcoin breaks $4000 - BetaNews - August 13th, 2017
- Bitcoin just passed $4000 - TechCrunch - August 13th, 2017
- Bitcoin vaults to new record above $4K, boosted by Japan and multiplying its value fourfold - CNBC - August 13th, 2017
- What is bitcoin? - CoinDesk - August 12th, 2017
- Bitcoin surges to fresh record above $3500, beats gold amid the global market sell-off - CNBC - August 12th, 2017
- 'Blockchain technology will change the world': Fidelity Labs SVP - CNBC - August 12th, 2017
- The Bitcoin Cash Hard Fork Will Show Us Which Coin Is Best - Fortune - August 12th, 2017
- Bitcoin Price Index - Real-time Bitcoin Price Charts - August 11th, 2017
- $5000 Bitcoin? 3 Reasons to Buyand to Stay Away - Fortune - August 11th, 2017
- Fundstrat's Tom Lee" Bitcoin will be the best asset through year-end - CNBC - August 11th, 2017
- Howard Marks, who has called past market bubbles, says 'I don't understand what's behind bitcoin' - CNBC - August 11th, 2017
- Commerzbank's Curious Way to Get Bitcoin Exposure Without Actually Buying It - Bloomberg - August 11th, 2017
- As bitcoin comes off its record high, the next step is to avoid a 'lightning fork' - CNBC - August 10th, 2017
- Buoyant bitcoin stirs crypto-bubble fears - CNBC - August 10th, 2017