More and more companies with a crypto focus can also be traded on well-known stock exchanges. Therefore, individual stocks are worth a look, especially for stock fans looking for regulated ways to enrich their portfolio with the crypto industry. Especially since the correction of the last few weeks could offer attractive entry prices. Which stocks are particularly promising. Here are the top 5:
1) Coinbase (WKN A2QP7J): Market capitalization of around €43 billion
The largest US crypto exchange is particularly professional. While competitor Binance is a bottomless pit from a regulatory standpoint, Coinbase is a model student of the authorities. It also fits that Coinbase was the first company in Germany to receive a crypto custody license. With the entry into the market of the old economy, i.e. established banks and exchanges in the cryptocurrency sector, it is even more important to be able to keep up in terms of regulation. Without proper licenses, cryptocurrency companies are unlikely to gain enough trust from investors. Especially since advertising options and customer contact are also limited without licenses.
Another advantage of Coinbase stock is that the exchange already has a reputation as a custodian for institutional investors. Big players like Tesla often work together with Coinbase. Assuming Insti’s business in particular picks up in 2022, there should still be plenty of growth possible here.
Therefore, Coinbase has everything it needs to increase its sales through expansion (see Germany and the EU) as well as through product range expansion (such as new lending business). In perspective, the US market leader should have a good chance of becoming a fixture in both the crypto and traditional financial worlds.
2) Block ex Square (WKN A143D6): market capitalization of around €58 billion
Former Twitter founder and cryptocurrency fanatic Jack Dorsey changed the name of his payment service company Square to Block in December 2021. The Block Cash app has around 40 million active users (last updated in the fall of 2021). As attractive as these figures may seem, it should not be forgotten that the main competitor Paypal has more than 75 million active users with its comparable application Venmo. As natural as the integration of crypto services is for both apps, Block is likely to be more consistent here.
The Block company is not only one of the five largest Bitcoin holders among publicly traded companies with a stock of 8,027 BTC, but Dorsey also wants to develop a decentralized exchange (DEX) and wallet. The entire crypto ecosystem is supposed to come together under Block. Hardly any other stock company of this size should proceed as progressively as Block: that is what Jack Dorsey stands for with his name.
3) Marathon Digital Holdings (WKN A2QQBE): Market capitalization of around €2.7 billion
Marathon Digital is one of the leading US Bitcoin mining corporations and has been able to expand significant mining capabilities through Bitmain Asic miners in recent months. At the end of December 2021 alone, the company acquired mining hardware for almost $900 million, an industry record. At the same time, with BlackRock and Fidelity, two giants are invested in the hundreds of millions as shareholders. Additionally, Marathon Digital had raised US$500 million in fresh capital through a bond issue in November 2021.
The huge influence of the company is reinforced by the centralization of mining in the US. Since the mining ban in China in April last year, the hash rate in the US has increased tremendously. At the same time, political unrest in the mining stronghold of Kazakhstan means US bitcoin mining companies are benefiting. In addition to geostrategic advantages, Marathon Digital is also progressive when it comes to sustainability. According to the company, 70 percent of IT operations are already CO₂ neutral. In view of the sociopolitical pressure to achieve climate neutrality in mining, Marathon Digital should also be well positioned here.
However, it should never be forgotten that mining companies are more dependent on rising Bitcoin prices than other cryptocurrency companies. The enormous costs of hardware and energy always represent a high risk, it is not in vain that mining companies are compared to leverage investments in the respective underlyings.
4) Bakkt Holdings (WKN A3CY4P) – market capitalization €305 million
Bakkt became known for its physically insured Bitcoin futures, which are traded on the Intercontinental Exchange, which in turn belongs to the New York Stock Exchange. From October 2021, investors can also buy company shares on the stock exchange. Like Coinbase, Bakkt should also benefit from more fund inflows from institutional investors in 2022.
In addition, the company offers several other crypto services, from crypto gift cards to its own crypto wallet and payment app. In this context, the cooperations initiated in 2021 could bear fruit. Whether it’s the credit programs with Starbucks or the Wyndham hotel chain or the partnership with Mastercard. In October 2021, for example, it was announced that Bakkt and Mastercard would jointly offer crypto services to their large customer base. Strong positioning under the umbrella of the New York Stock Exchange with simultaneous cooperation partners that can generate millions of new clients at a time makes Bakkt as interesting as a crypto stock.
5) Galaxy Digital Holdings (WKN A2JRV8) – market capitalization €5 billion
Galaxy Digital’s charismatic CEO Michael Novogratz is known for his media outreach and upbeat statements. After its competitor Grayscale, Galaxy Digital is the largest crypto asset manager. Like other players focused on professional investors, Galaxy Digital should benefit from the mainly institutional client base in 2022. At the same time, the company is diligently investing in various companies in the crypto industry. So, it is no longer just about Bitcoin, but also about NFT and DeFi projects. The dig across the entire crypto ecosystem is backed by solid numbers. In the last two quarters (Q3 2021 and Q4 2021), the company was able to post around 500 million US dollars in profit.
Crypto Stocks: The conclusion
The selection of listed companies with a clear crypto focus (pure gaming) is currently still manageable. However, some interesting candidates can be found that should benefit from the growth of the market, especially in the long term. Surely you can’t get a bargain anymore considering valuations in the billions, but if you want to own stocks with crypto exposure in addition to cryptocurrencies, you don’t have to look in the tube.
If stock picking isn’t for you, you can also take a look at the VanEck Blockchain ETF (VanEck Vector Digital Asset Stock ETF) throw. In addition to 20 other stocks, you’ll also find all five titles featured there. Alternative ETFs would include the Invesco CoinShares Global Blockchain ETF or ETC Group Digital Assets and Blockchain Equity ETF.
Disclaimer: The article reflects the author’s opinion only. It is not investment advice or a recommendation to buy or sell.
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