FundstratTom LeeBitcoin 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 FinanceMarket 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
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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