- Investing Guide
- Bitcoin vs.
- How to Buy ‘BTC’
- Bitcoin Whitepaper
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Table Of Contents
Many investors, especially after the recent US SEC approval of BTC spot ETFs, are keen to invest in Bitcoin. They expect the price of Bitcoin to grow significantly amidst a wholesome positive market sentiment thriving around the asset for some time now. Investors do not want to deprive themselves of becoming a part of this growth story. However, investing in bitcoin, and other crypto assets for that matter, is often seen as an unusual choice by many.
Some believe it would require additional efforts for the safekeeping of digital assets through custody services and wallets. Some think that tracking digital assets, their growth potential, and current performance might become cumbersome. Some are even doubtful whether they possess enough knowledge of blockchain and crypto to invest in one of the most successful assets in that space.
All these give rise to a dilemma. While investors want to be a part of Bitcoin’s growth story, they doubt whether it will be too much of an effort to maintain this investment in their portfolio. Resultantly, they are keen to locate reliable assets that are traded publicly on stock exchanges and have substantial exposure to bitcoin on their balance sheets. This way, they could benefit from Bitcoin’s growth without having to own and hold it directly.
Here, we have come up with a list of five companies that offer reliable exposure to Bitcoin without investors having to hold it.
Microstrategy’s stock went up close to 250% in the last five years. On 25th January 2019, for instance, its stock traded at an average price of US$139.40. On 19th Jan 2024, that price went up to US$481, a growth of 245%. Bitcoin plays a crucial role in Microstrategy’s balance sheet. And, therefore, becoming a part of Microstrategy's growth is exposure to the growth story of Bitcoin without really holding it.
Microstrategy is a NASDAQ-listed company that prides itself as the largest independent publicly traded business intelligence company. The company announced its third-quarter 2023 financial results on November 1st, 2023. While releasing the data, the company offered an up-to-date disclosure of its Bitcoin holdings.
In Q3 2023, the company increased its total bitcoin holdings to 158,400 bitcoins, adding 6,067 bitcoins since the end of the second quarter. This purchase cost the company US$167.0 million, at a rate of US$27,531 per bitcoin. The total holdings of 158,400 bitcoins stood against a total cost of US$4.69 billion, US$29,586 per bitcoin. Income-wise, MicroStrategy registered a revenue of US$129.5 million in Q3 2023, up 3% year-over-year. Microstrategy continues to be optimistic about its Bitcoin strategy.
According to Andrew Kang, the Chief Financial Officer of Microstrategy:
“Our commitment to acquire and hold bitcoin remains strong, especially with the promising backdrop of potential increased institutional adoption.”
Bitcoin is one of the two corporate strategies that MicroStrategy pursues. It wants to continue with the acquisition and holding of Bitcoin, which the company views as a dependable store of value supported by a ‘robust, public, open-sourced architecture untethered to sovereign monetary policy.’
Coinbase Global, Inc., traded as COIN on NASDAQ, is another stock that has performed exceedingly well. If we look at its performance over the past year, we would see its price has more than doubled. On January 16th, 2023, Coinbase Global traded at US$55.16. On January 19th, 2024, the price had gone up to nearly US$125.
Coinbase is a globally known exchange that started its journey in 2012, more than a decade ago. Till then, it has registered nearly US$76 billion in quarterly volume traded and US$114 billion in safeguarded assets, with operations spread across more than 100 countries, managed by over 3,400 employees.
Tasting the success of Coinbase is – indirectly – tasing the success of Bitcoin, too. According to an identification exercise carried out by the blockchain intelligence platform Arkham, Coinbase holds nearly 1 million bitcoins in its wallets, worth more than US$25 billion.
Since Bitcoin has a circulating supply of close to 20 million, Coinbase occupies nearly 5% of all existing bitcoins. Moreover, there are close to 36 million Bitcoin deposits and holding addresses that Coinbase has used so far. When it comes to owning bitcoins, the exchange only possesses around 10,000 of all the bitcoins it holds.
If we look at the dollar value of these bitcoins, according to the latest available Q3 2023 earnings report, Coinbase holds close to US$127 million worth of Bitcoin as investments, a significant increase from end-year 2022, when it was a little more than US$111.5 million. Coinbase also holds more than US$11.5 million worth of Bitcoins for operating purposes, almost double the 2022 year-end value of US$5.4 million.
#3. Riot Platforms
Compared to Coinbase and MicroStrategy, Riot Platforms, Inc. is closer to the world of Bitcoin. The company’s declared vision is to build the world’s leading Bitcoin-driven infrastructure platform.
Riot Platform owns and operates and operates North America’s largest Bitcoin mining facility as measured by developed capacity.
The company is NASDAQ-listed. It sells under the ticker RIOT. Over the past year, RIOT has seen notable price appreciation. For instance, on January 16t, 2023, RIOT had a price of US$6.20. It increased to US$10.29 on January 19th, 2024.
Riot published its latest financials on November 7th, 2023, in the form of its Q3 2023 quarterly update. The company declared its financial and liquidity position as ‘strong.’ It held 7,327 bitcoins as of September 30th, 2023.
The estimated fair value of ‘Bitcoin held’ based on applying the market price of one Bitcoin on September 30, 2023, of approximately $26,968 to the Company’s 7,327 Bitcoin held, was US$198 million. The company’s increase to 7,327 bitcoins was a growth of 8% on a year-over-year basis.
At the time of writing, the YTD growth in Marathon Digital Holding’s price was more than doubled. For instance, on January 23rd, 2023, Marathon Digital, listed as MARA on NASDAQ, had a price of US$8.02. On January 22nd, 2024, the price reached US$16.43.
Marathon Digital Holdings claims to be one of the ‘largest, most energy efficient, and most technologically advanced bitcoin mining companies.’ In the same breath, the company proclaims it to be one of the largest Bitcoin holders among publicly traded companies in North America.
The company published its latest financial results, the third quarter of 2023, on November 8th, 2023. Marathon Digital reported a revenue of US$97.8 million for the quarter, significantly above third-quarter 2022 revenues of $12.7 million. The growth was attributed to a 467% increase in bitcoin production, amplified further by 32% higher average bitcoin prices during the period.
By year-end 2023, Marathon Digital Holdings reported more than 15,000 bitcoins in treasury. The presence of bitcoins on its balance sheet helped Marathon Digital prosper. The Q3 2023 financial report highlighted that the company had reduced its long-term debt by 56% and captured a total of nearly US$101 million in cash savings for its shareholders. For the first time in two years, the company’s combined cash and bitcoin holdings exceeded its debt at the reported quarter’s end.
Hut 8 aims to provide the infrastructure and solutions that will empower the global technology ecosystem, facilitating the transition to the next industrial revolution. It claims to be the first company to operate computing infrastructure across its sites that mines Bitcoin and delivers cloud and colocation services to its enterprise consumers. It is the first Canadian data mining company to be present on NASDAQ and is also a leader in HODLing self-mined bitcoin.
The latest financial results published by the company were in the form of interim financial statements for the nine months ended on September 30, 2023. According to these statements, the company had close to CAD$265 million worth of bitcoins in custody as its digital assets.
The volume was a significant increase from approximately CAD$204 million worth of bitcoins held in custody by year-end 2022. However, the company witnessed a decline in the number of bitcoins held, which went down from 9,086 on December 31st, 2022, to 7,269 on September 30, 2023.
The stocks of Hut 8 Corporation (HUT) witnessed moderate growth in prices over the past five years. On February 1st, 2019, the price was US$4.91, which increased to US$6.81 on January 22, 2024.
While companies holding significant numbers of bitcoins on their balance sheets are performing quite well on the stock exchanges, investors should keep scouting for new opportunities.
Initial Public Offerings are the best in such cases of opportunity hunting. One imminent IPO that has given birth to much anticipation and excitement among investors who want to have exposure to Bitcoin without holding it directly is that of Circle.
Circle is the issuer of the largest and most widely used stablecoin, pegged to the US dollar, USDC. USDC has eased the lives of millions of users, businesses, and developers worldwide by shortening settlement times with significantly quick payments. USDCs are fully programmable, 24X7 active, and incur near-zero cost. Its global partners include VISA, Blackrock, BNY Mellon, MasterCard, Coinbase, and many more stalwarts in the field of traditional finance and cryptocurrencies.
On January 11th 2024, Circle filed for an IPO with the US SEC. The listing will only happen after the SEC has finished its review. The review is subject to market and other conditions.
It is the second time Circle has opted to go for a public listing. Last time, the company had tried to go public through a SPAC with Concord Acquisition Corp. in a deal that would have taken the company’s value to US$9 billion. Things didn't work out as planned. However, this time, the IPO, if it comes to fruition, will be taking place amidst much hope and excitement for crypto businesses. The approval of Bitcoin spot ETFs by the US SEC has created much positive investor sentiment around digital assets and bitcoin.
According to Circle’s registration statement for securities to be issued in business combination transactions, released on November 14, 2022, Bitcoin held as digital assets by Circle had a combined value of US$294 million by June 30, 2022. It was a significant increase from the US$195 million held by the company till the end of December 31, 2021.
The Future of Bitcoin Exposure
The interest in Bitcoin exposure is increasing. Bitcoin dominates almost half of the crypto market capitalization. Its price is also on a steeply curved ascension. Its price was less than US$23,000 a year ago, and now it has been hovering over US$40,000, occasionally surpassing the mark of US$45,000 as well.
The approval of as many as 11 bitcoin spot ETFs by the US SEC has helped it gain confidence, especially from large-scale institutional investors who are worried about the regulatory climate impacting its price. The approved ETFs have also boosted the morale of retail investors.
Many companies have bitcoins on their balance sheet and are increasing their asset count by purchasing more. Global leaders like Tesla and Block also have Bitcoin as part of their asset composition.
The expected price rise of Bitcoin in the days to come will strengthen the value of these companies. Investing in them through publicly listed stocks will help many investors benefit from the Bitcoin growth story without the need for holding BTC.
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Gaurav started trading cryptocurrencies in 2017 and has fallen in love with the crypto space ever since. His interest in everything crypto turned him into a writer specializing in cryptocurrencies and blockchain. Soon he found himself working with crypto companies and media outlets. He is also a big-time Batman fan.