Bitcoin bull Tom Lee has identified 12 stocks that are perfect if you don't want to own the cryptocurrency

FundstratTom Lee

Bitcoin is still too risky for many investors with a lot of money at stake.

But there’s a handful of stocks that stand to benefit from bitcoin and the underlying blockchain technology, according to Tom Lee, a strategist at Fundstrat and one of the most prominent advocates for the cryptocurrency.

The basket of 12 stocks he recommended in a note Friday has gained 136% this year. That’s more than the S&P 500’s 18% rally, but is dwarfed by bitcoin’s 1,588% rise.

“We believe investors should have exposure to blockchain, particularly given bitcoin has essentially zero correlation to equities, bonds and commodities – hence, as a portfolio strategy, bitcoin is a good diversification tool,” Lee said. He sees one bitcoin costing $US25,000 by the end of 2022.

The stocks Lee recommends offer “three types of leverage- (i) price gains of bitcoin/tokens; (ii) transaction activity (either wallets or exchanges); and (iii) mining based on proof of work or proof of stake.”

Here they are, in ascending order of how much exposure Lee estimates they have to bitcoin:


Square

Ticker:
SQ

Market cap: $US14.8 billion

Year-to-date performance: 179%

Comment: Allows bitcoin to be bought and sold, accepts bitcoin.

Source: Fundstrat


Goldman Sachs

Ticker:
GS

Market cap: $US94.4 billion

Year-to-date performance: 4.5%

Comment: Likely “first mover” investment bank in bitcoin.

Source: Fundstrat


Overstock

Ticker:
OSTK

Market cap: $US1.13 billion

Year-to-date performance: 158%

Comment: Accepts bitcoin and owns Medici Ventures, its blockchain subsidiary.

Source: Fundstrat


Cboe Options Exchange

Ticker:
CBOE

Market cap: $US14.13 billion

Year-to-date performance: 70%

Comment: Offers bitcoin futures.

Source: Fundstrat


CME Group

Ticker: CME

Market cap: $US52 billion

Year-to-date performance: 33%

Comment: Will launch bitcoin futures.

Source: Fundstrat


AMD

Markets Insider

Ticker: AMD

Market cap: $US9.7 billion

Year-to-date performance: -11%

Comment: GPU-card producer for mining tokens.

Source: Fundstrat


Nvidia

Markets Insider

Ticker: NVDA

Market cap: $US117.2 billion

Year-to-date performance: 81%

Comment: GPU-card producer for mining tokens.

Source: Fundstrat


DigitalX

Google Finance

Ticker: DCC.AU

Market cap: $US109.25 million

Year-to-date performance: 389%

Comment: Advisory and research services.

Source: Fundstrat


US Global Investors

Ticker: GROW

Market cap: $US66.3 million

Year-to-date performance: 207%

Comment: Leveraged stake in Hive Blockchain Technologies.

Source: Fundstrat


Hive Blockchain Technologies

Markets Insider

Ticker: HIVE.CN

Market cap: $US775.8 million

Year-to-date performance: 238%

Comment: Crypto Miner

Source: Fundstrat


MGT Capital

Markets Insider

Ticker: MGTI

Market cap: $US140 million

Year-to-date performance: 256%

Comment: Crypto Miner

Source: Fundstrat


Bitcoin Investment Trust

Ticker: GBTC

Market cap: $US3.4 billion

Year-to-date performance: 1,378%

Comment: Exchange-traded note with ownership of bitcoin.

Source: Fundstrat


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