The Ultimate Bitcoin Stock: Where To Invest?

Bitcoin stocks are publicly traded companies that operate businesses highly exposed to the cryptocurrency market or blockchain technology. Cryptocurrencies are various forms of digital money that usually run on blockchain technology.

There are thousands of cryptocurrencies, but when we think of crypto, we usually think of Bitcoin. That's because Bitcoin represents more than 45% of the total cryptocurrency market.

If you're looking to invest in Bitcoin stocks, here are some of the best options to consider as of August 2024:

- Marathon Digital Holdings (MARA)

- MicroStrategy (MSTR)

- Coinbase Global (COIN)

- Block (SQ)

- PayPal Holdings (PYPL)

- CME Group (CME)

- iShares Bitcoin Trust (IBIT)

- Nvidia Corporation (NVDA)

- Advanced Micro Devices (AMD)

- Riot Blockchain (RIOT)

Remember, investing in cryptocurrencies and crypto stocks is risky and speculative. Make sure to do your own research and only invest what you can afford to lose.

Bitcoin mining companies

Bitcoin mining stocks have been some of the best-performing investments in the market this year. However, they remain extremely volatile and risky investments. Here is a list of some of the top-performing Bitcoin mining companies:

Riot Platforms Inc. (RIOT)

Riot Platforms is a U.S. Bitcoin mining company that reported a record $76.7 million in quarterly revenue and a record hash rate capacity of 10.7 exahashes per second (EH/s) in August. The company's shares have jumped by 234.8% in 2023, and they closed at $11.35 on August 31.

Marathon Digital Holdings Inc. (MARA)

Marathon Digital is a U.S. Bitcoin mining company that reported $81.8 million in revenue and a 314% year-over-year increase in Bitcoin production in the second quarter. The company aims to improve mining efficiency by integrating its own technology to streamline operations. Its shares are up 267.5% this year, closing at $12.57 on August 31.

Cipher Mining Inc. (CIFR)

Cipher Mining is a technology company focused on developing and operating Bitcoin mining data centers in the U.S. The company reported a record self-mining hash rate capacity of 6.8 EH/s in the second quarter and plans to expand its operations further. Cipher's stock has gained a whopping 469.6% in 2023, with shares trading at $3.19 as of August 31.

Hut 8 Mining Corp. (HUT)

Hut 8 Mining is a Canadian digital asset mining company that operates two mining facilities in southern Alberta. The company uses emission-free energy sources to run its operations and has recently opened up a shareholder vote on its plan to merge with U.S. Bitcoin Corp. to create a more powerful Bitcoin mining entity. Hut 8's shares are up 185.9% so far this year, closing at $2.43 on August 31.

TeraWulf Inc. (WULF)

TeraWulf is a U.S. Bitcoin miner focused on clean crypto mining, with over 91% of its Bitcoin production powered by zero-carbon energy. The company reported a 67% growth in its hash rate capacity in the second quarter and a 70% increase in the number of Bitcoins mined. TeraWulf is also expanding its Lake Mariner facility in New York. Its stock has gained 211.9% in 2023, closing at $2.09 on August 31.

Bitfarms Ltd. (BITF)

Bitfarms is a Canadian Bitcoin mining company that runs a vertically integrated operation, including onsite technical repair and company-owned electrical engineering services. All of its facilities are more than 99% powered by environmentally friendly hydropower. The company's stock has risen by 209% so far in 2023, closing at $1.36 on August 31.

Crypto stocks vs buying crypto

Investing in crypto stocks or buying crypto are both valid options, but they come with different risks and rewards. Here is a detailed comparison of the two:

Crypto Stocks vs. Buying Crypto:

• Volatility: Crypto stocks are generally less volatile than buying crypto directly. Crypto stocks are often shares in companies that have exposure to the crypto market or blockchain technology, which means their performance is not solely dependent on the volatile crypto market.
• Diversification: Crypto stocks offer diversification as they are typically larger, more established companies with multiple revenue streams. For example, companies like PayPal (PYPL) and Block (SQ) offer digital payment services and have only a portion of their business focused on crypto. In contrast, buying crypto directly is a more concentrated investment that can be riskier.
• Regulation: Crypto stocks are subject to the regulations and oversight of the traditional stock market. This provides investors with more transparency and protection. On the other hand, the crypto market is less regulated, and the lack of oversight can make it more vulnerable to fraud and manipulation.
• Ease of Access: Investing in crypto stocks is often more accessible to the average investor. Well-known companies like PayPal, Block, and Coinbase (COIN) offer exposure to the crypto market without requiring investors to navigate the complexities of buying and storing crypto directly.
• Risk and Return: Both options carry risk, but buying crypto directly can be riskier due to its high volatility. Crypto stocks may offer more stable returns over the long term, particularly if the companies have strong fundamentals and diverse revenue streams. However, the potential for dramatic growth or loss is higher with direct crypto investments.
• Adoption and Mainstream Acceptance: Crypto stocks benefit from the growing adoption and mainstream acceptance of blockchain technology. Companies that integrate blockchain into their operations or offer crypto-related services can gain a competitive edge. This can positively impact their stock performance and provide a more stable investment opportunity.
• Long-Term Investment: Crypto stocks are generally considered a more stable long-term investment option than buying crypto directly. The crypto market's volatility makes it challenging to hold crypto as a long-term investment. However, some investors choose to hold crypto for the long term, believing in its potential as a legitimate global currency and store of value.

In conclusion, both options have their advantages and disadvantages. Crypto stocks offer diversification, stability, and regulatory oversight, making them a more conservative investment choice. On the other hand, buying crypto directly provides a more concentrated exposure to the crypto market, offering the potential for higher returns, but also carrying more risk. Ultimately, the decision between investing in crypto stocks or buying crypto depends on an investor's risk tolerance, investment goals, and time horizon.

Crypto exchange platforms

Coinbase

Coinbase is one of the most popular and best-known crypto exchange platforms. It offers a simple user interface and a good selection of tokens and coins to invest in. It is also one of the most trusted and secure platforms. However, it charges high fees unless you use Coinbase Pro, and users do not control the private keys to their wallets. Coinbase currently offers a $10 BTC bonus after you trade $100 if you sign up through a referral link.

Kraken

Kraken is one of the original crypto trading platforms and offers a good selection of coins and tokens to trade and invest in, including Dogecoin and other riskier tokens. It also allows margin trading. However, it is not as easy to use as some of the other platforms on this list.

Uphold

Uphold offers a simple solution for trading multiple assets, allowing you to trade multiple assets directly without having to go back to cash. It also offers a simple and transparent pricing structure, and supports a lot of crypto tokens and even some stocks. However, it is not as easy to use as some other platforms, and there are some reports of poor customer service. Uphold is currently offering a $10 bonus when you sign up.

Gemini

Gemini is one of the largest and most popular crypto exchange platforms. It supports most major cryptocurrencies and pays competitive interest rates on assets. It also has a very easy-to-use app-based interface. However, it has limited payment/deposit methods, and customer service can be mixed. Gemini offers a $15 BTC bonus when you open an account and refer a friend.

Bitstamp

Bitstamp is one of the oldest and most well-established crypto exchange platforms, having been founded in 2011. It offers over 70 tokens that you can trade and a volume-based fee structure. It also has a solid mobile app and allows you to buy crypto instantly with your credit or debit card. However, staking features are not available to all users.

EToro

EToro is a worldwide crypto exchange platform that offers a huge variety of digital assets to buy and sell. It also has a practice trading account so you can try it out before investing real funds. eToro is currently offering a $10 bonus if you deposit and trade $100 in crypto assets (for US users only).

Bitcoin IRA

Bitcoin IRA is a little different from the other platforms on this list. It combines the features of a crypto wallet and exchange with an IRA, meaning that gains inside the account are tax-free or tax-deferred. However, it does not support as many tokens and coins as other platforms.

Crypto.com

Crypto.com is one of the largest and fastest-growing crypto exchange platforms. It is based in Hong Kong but offers support for US-based customers. It offers access to over 90 tokens and coins worldwide and over 50 for US-based customers. It also pays weekly interest on crypto savings and offers a debit card linked to your account. However, it has a complicated fee structure, and there is no desktop support, only an app.

Binance

Binance is one of the most robust crypto trading platforms, offering a huge amount of supported coins and tokens, and fast transaction times. However, the US version of the platform (Binance.us) has limited coins and tokens compared to the international version, and it is not available in all US states.

Crypto wallets

There are two main types of crypto wallets: custodial and non-custodial. Custodial wallets are hosted by a third party that stores your keys for you. Non-custodial wallets are wallets in which you take responsibility for securing your keys. There are also two subcategories of wallets: hot and cold. A hot wallet is connected to the internet or to a device with an internet connection, while a cold wallet has no connection. Lastly, there are three subcategories of wallets—software, hardware, and paper. Each of these types is considered either a hot or cold wallet.

• Software wallets: These are applications for desktops and mobile devices. They are installed on a computer and can access your cryptocurrency, make transactions, display your balance, and more. Examples include Trezor, Electrum, and Mycelium.
• Hardware wallets: These are the most popular type of wallet because you can store your private keys and remove them from your device. They might resemble a USB drive. Examples include Ledger and Trezor.
• Paper wallets: Early crypto users would write or type their keys on paper. These wallets are easily damaged or lost, so many crypto owners do not use them anymore.

When choosing a crypto wallet, it is important to consider your needs and the level of security you require. It is also crucial to implement security measures to protect your wallet and assets from cybercriminals.

Crypto ETFs

One of the benefits of investing in crypto ETFs is that they are typically traded on regulated exchanges, which can provide investors with more peace of mind compared to investing directly in cryptocurrencies through an exchange or broker. Additionally, crypto ETFs can be more accessible to investors who are not familiar with the complex process of buying and storing cryptocurrencies.

It is important to note that crypto ETFs are still subject to the volatility of the cryptocurrency market and are considered high-risk investments. The value of a crypto ETF can fluctuate significantly, and investors could lose money if the market takes a downturn. However, crypto ETFs can also provide the potential for high returns if the market performs well.

When considering investing in a crypto ETF, it is essential to do your research and understand the risks involved. It is also crucial to remember that the cryptocurrency market is still relatively new and largely unregulated. Therefore, it is advisable to consult with a financial advisor before making any investment decisions to ensure that you fully understand the potential risks and rewards.

Frequently asked questions