Crypto Now: Five Easy-to-Own Stocks With Massive Crypto Exposure

The rise of cryptocurrencies is one of the most amazing financial stories of our lifetimes.

Massive amounts of money have flowed into this brand-new asset class over the last four years.

It used to take 10,000 Bitcoin to buy just two pizzas.

That’s not the case today. It’s just the opposite.

Now the richest man in the world, Elon Musk, has devoted $1.5 billion worth of the cash stash at Tesla (TSLA) to Bitcoin. Across the globe, major corporations are following his lead.

Square (SQ), Paypal (PYPL), Mastercard (MA) and Visa (V) are all in on the action. So are big-name insurers like Mass Mutual. Even big banks like JPMorgan Chase (JPM) are investing in crypto.

Want in Too?

But if there’s one flaw in the crypto market, it’s this… The barrier to entry, while falling quickly, is higher than many investors are used to.

It’s not hard to open an account with a crypto exchange, but it can be confusing, especially for folks who make only a few trades each year.

But here’s the thing… I recommend that every investor have exposure to the crypto market. It shouldn’t be a large part of a portfolio (less than 10%), but there’s no doubt folks who followed this advice over the past 12 months are sitting on phenomenal, portfolio-leading gains.

The real thing is best. But there are some very close alternatives trading on Wall Street’s major stock exchanges. Anybody can get into them with a simple, ordinary trading account.

Here is a list of five that offer some of the best and most efficient exposure to the crypto market…

Grayscale Bitcoin Trust (GBTC) – We’ll start with the biggest and most popular of them all. This ticker represents a trust that owns more than 649,000 Bitcoin… roughly 3% of the total supply of the coin.

In fact, the only thing the trust owns is Bitcoin. That makes it a pure play on the price of the world’s most popular crypto.

And while a lot of investors treat the trust like they would a traditional exchange-traded fund, there are some key nuances. The first is the most important. Because the fund owns a finite amount of Bitcoin, it often trades at a premium to the price.

That means when demand is high for shares of the trust, you will likely pay more for a slice of the action than you would if you simply bought Bitcoin on a traditional crypto exchange.

For most folks, the premium isn’t much of a concern. It’s often quite small in comparison with the daily movement of the coin.

With this trust, investors do not take direct ownership of Bitcoin. They simply own a stake of a trust that owns a whole lot of them.

It’s a safe (from a cybersecurity perspective) and efficient way to play Bitcoin.

Grayscale Ethereum Trust (ETHE) – It’s vital to understand that Bitcoin is not the only crypto in the game. It gets a lot of attention because it was the first to the market. But that does not mean it is the best coin or that its price will soar the highest.

Ethereum is quickly gaining in popularity and may soon overtake Bitcoin. That’s because it represents a different blockchain with a different host of possibilities. Ethereum, in fact, is the leader sitting atop an entire ecosystem that bears its name.

And just like with Bitcoin, the folks at Grayscale have set up a trust to follow the coin’s pricing action. The idea is exactly the same as with the Bitcoin trust – only this time, the ticker tracks Ethereum.

And while Grayscale’s Bitcoin trust charges a 2% annual fee, its Ethereum trust is a bit more expensive at 2.5%. This cost is another variable in the decision of whether to own crypto directly by taking possession of it or to own it indirectly by taking a stake in a trust.

This trust is still very young and very small. While it is designed to track the day-to-day movement of Ethereum, buying and selling shocks could send the price dramatically higher or lower, increasing potential volatility. As always, keep your position size small and invest only what you can afford to lose.

MicroStrategy (MSTR) – In the simplest words, a crypto trust is a bit boring. It’s passive. It’s not actively buying and selling to maximize profit potential for shareholders. For that, you’ll need to either invest in coins directly and do so yourself… or own a stake in a company like MicroStrategy.

To be clear, this is not a crypto pure play. MicroStrategy is an analytics company. But it’s also a growing heavy hitter in the world of crypto.

It owns more than $1.5 billion worth of Bitcoin, equating to more than a tenth of MicroStrategy’s total market valuation. But it’s how the company is paying for that crypto that is most interesting.

Much of the company’s initial holdings were paid for by excess cash. But recently, CEO Michael Saylor has been tapping the dirt cheap debt market to fund the company’s purchases.

In late 2020, for instance, the company raised $650 million in a debt offering that it used to buy Bitcoin. And it started 2021 with news that it will offer $600 million worth of convertible notes to buy even more crypto.

It’s a bold, leveraged strategy. But for folks looking to make a bold move into the world of crypto, it’s a smart play.

Marathon Patent Group (MARA) – So far, we’ve looked only at companies and trusts that own crypto. But what about the companies that are making crypto? It’s an interesting angle… especially if you’re looking for a unique entrée to the sector.

Through a massive series of computers or, more specifically, miners, Marathon helps to make up the backbone of the crypto market. Its machines help process the transactions that take place on the blockchain.

In return for this hard work (called “mining”), the company gets paid in brand-new Bitcoin.

The more folks buy and sell crypto, the more business it has. And the higher the price of Bitcoin, the more profit it makes.

As prices climb, industry competitors are racing to get their hands on as many mining units as possible. Right now, Marathon appears to be winning. It’s on track to have more than 103,000 units online by the end of next year.

If the current trend continues, Marathon could reward its shareholders handsomely.

It’s a speculative play, but where there’s risk… there’s reward.

Silvergate Capital (SI) – Some banks are starting to open their eyes to the realm of cryptocurrencies… but not many. And most that are have just dipped a toe into the water.

That’s not the case with Silvergate.

Founded in 1988, the company knows a thing or two about traditional banking. But it was also smart enough to see the massive opportunity for crypto banking.

At the center of its business is its proprietary currency payment system, the Silvergate Exchange Network. It works in between the major coin exchanges and the many institutional investors looking to turn dollars into crypto.

It’s created a tremendous advantage for the bank. Unlike most banks using traditional models, Silvergate does not have to pay interest on the funds it holds for its crypto customers. That means it can lend that money out (just like a traditional bank) with far lower expenses.

As more and more companies begin to transact in crypto (again, we’re already seeing it from PayPal and Square), there is little doubt that Silvergate will have a technological and financial advantage. It was one of the first to the market and has grabbed a significant share of that market.

It’s not a direct play on the soaring price of crypto, which may limit the stock’s upside. But it is an ideal way to make a more conservative play on the growing acceptance of crypto in our traditional economy.

What About Altcoins?

You may have noticed a theme in the five tickers listed above. They all focus on Bitcoin or Ethereum.

Again, that’s fine if you’re just getting started. But there are thousands of coins trading on exchanges across the globe. Some of them have amazing technological and economic promise. I’m convinced that several of them will soon eclipse Bitcoin in size and value.

Eventually, we will be able to play these sorts of coins in the stock market. By then, though, they’ll already be large, headline-driving coins.

That means there is only one way to play them today… by owning them directly.

That’s the aim of my popular Alpha Money Flow trading research service. It’s where I use money flow to track the fastest-moving coins in the market.

I recently told my readers about three red-hot, tiny coins. All the details on how I found them and how you can get in on the action today are at this link.

Welcome to the world of cryptocurrency.

Get some digital assets in your portfolio today. It’s time that everybody owns a slice of this hot market.