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Cryptocurrency stocks and ETFs to watch

Discover some of the top crypto stocks and ETFs to watch right now, based on market capitalisation, revenue growth and potential earnings.

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Cryptocurrencies vs stocks: which can I trade?

We do not offer cryptocurrency trading in the UK. However, with cryptocurrency stocks, you can gain exposure to the cryptocurrency market through trading on the price movements of companies that are involved with cryptocurrencies such as Bitcoin and Ethereum. Please note that the crypto market can be particularly volatile, so traders should take caution when opening spread bet and CFD positions on associated shares.

What is a cryptocurrency stock?

Crypto stocks are the shares of companies that take part in one or more of the following activities:

  • Mining of cryptocurrencies.
  • Developing blockchain technology that allows digital information and financial transactions to be recorded online.
  • Launching a digital wallet or crypto payment method.

A brief overview of the crypto rally

Following a bull run of cryptocurrencies after the last Bitcoin halving in May 2020, the price of Bitcoin reached a record high of over $61,000 in April 2021. This has increased investor interest towards cryptocurrency trading, and therefore, many companies are eager to join the buzz surrounding digital currencies.

It is no surprise that digital payment companies such as PayPal, Square, Visa and Mastercard have introduced crypto trading, as well as crypto rewards cards. Even major financial investment banks like Goldman Sachs and JP Morgan have opened crypto trading desks in recent years, highlighting the growing trend for financial businesses to be involved in digital assets.

In fact, analysts at Goldman Sachs released a report in April 2021 stating that companies with the highest blockchain and cryptocurrency exposure with a market capitalisation of at least $1bn averaged a 43% return this year. Therefore, crypto stocks may be a promising investment for 2021, although necessary risk-management controls are always needed when trading on a highly speculative market.

Crypto stocks to watch

Here’s a curated list of crypto stocks that you can trade on our Next Generation trading platform. It’s worth noting that we only offer crypto stocks and not cryptocurrencies.

Pricing is indicative. Past performance is not a reliable indicator of future results.

Coinbase (COIN)

Coinbase is a US crypto exchange platform that allows traders to buy and sell more than 50 digital currencies, including major assets such as Bitcoin, Ethereum and Bitcoin Cash, as well as altcoins such as TRON and Cardano. As of June 2021, the company has over 50m users and operates in over 100 countries across the world. As well as offering crypto trading, Coinbase sponsors debit and credit cards that allow commercial payments for Bitcoin owners, and it also launched a cloud platform for companies that are using digital currencies. Coinbase had its IPO in April 2021, where it was valued at almost $100bn on the NASDAQ exchange, solidifying its reputation within the cryptocurrency market.

Marathon Digital Holdings (MARA)

Formerly known as Marathon Patent Group, the former patent company shifted its business focus in 2020 to become a digital asset technology company. It is now one of the largest cryptocurrency miners in the US with a focus on the blockchain ecosystem. Marathon owns the Data Centre in Hardin, Montana, where it is working towards building the largest Bitcoin mining operation in the US at one of the lowest energy costs. The company has over 100,000 miners and holds approximately 8.4% of the global hash rate, producing 75.85 BTC per day. As a result of its quick success, Marathon Digital Holdings’ stock has jumped by over 200% in 2021.

GameStop (GME)

One of the trending meme stocks of 2021, GameStop has been in the news for a number of reasons, starting with the short squeeze that was caused by online retail traders in January. The gaming and electronics retailer has since announced that it will be launching a non-fungible token (NFT) platform powered by Ethereum. Upon this announcement, its share price rose by approximately 15% in a day. This type of NFT platform relies heavily on blockchain technology and is receiving a lot of investor interest from the gaming industry. If the struggling company wants to catch up with its competitors, it will need to continue developing its digital business model in order to boost its stock even further.

PayPal (PYPL)

PayPal is a US online payments system that offers an electronic alternative to traditional money transfers. The company introduced crypto trading in late 2020 through its Venmo digital wallet, where US-based users can now trade Bitcoin, Bitcoin Cash, Litecoin and Ethereum. It also supports peer-to-peer payments and users of the platform can pay supported merchants in digital currency. However, PayPal’s feature does not let you take ownership of the asset, as you will only have access to the public key of your wallet (your wallet address), whereas PayPal takes control of the private key (control of the wallet). This may deter some investors that want to take proper ownership of their purchased asset, which they can do on other crypto exchanges.

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Riot Blockchain (RIOT)

Riot Blockchain’s share price is up 151% year to date, thanks to the rally in Bitcoin prices. However, as the stock is heavily correlated with crypto prices, it can be a volatile investment. It operates large-scale Bitcoin mining throughout the US and is working to expand its operations and infrastructure capacity. Riot has an overall total of 58,000 miners that perform at a hash rate of 1.6EH/s, although this is expected to increase to 7.7EH/s by 2022. The company announced in June 2021 that it would be selling 2.2m shares of crypto trading platform Coinsquare to Mogo in exchange for 2.3m shares of Mogo, a fintech company that operates a Bitcoin rewards program. This makes Riot Blockchain a stock to watch in the upcoming year.

NVIDIA (NVDA)

Chipmaker and semiconductor company NVIDIA doesn’t deal with cryptocurrencies directly, but it is involved in the design of graphics processing units (GPUs). These can be used to mine cryptocurrencies. In 2018, the company witnessed a surge in stock price, which was mainly attributed to the rise in cryptocurrency prices and the demand for innovative blockchain technology. As a result, NVIDIA launched a new line-up of chips specifically for crypto mining at the start of 2021, as the intense demand for their traditional gaming graphics cards from crypto miners was starting to create supply shortages.

MicroStrategy (MSTR)

Business intelligence company MicroStrategy has reportedly spent over $4.45bln on Bitcoin so far, starting in August 2020. Although it does not belong to the crypto sector, CEO Michael Saylor has issued hundreds of millions in junk bonds in order to buy bitcoin. This helped MicroStrategy stock to surge more than 700% in the past year, and the company is continuing to add to its cryptocurrency portfolio, as it predicts that prices will increase in the long run and even overtake the overall market cap of gold.

Square (SQ)

Square is another digital payment system that launched Bitcoin trading in 2017 through its Cash App, which lets investors deposit as little at $1 to get exposure to stocks and cryptocurrencies. As of June 2021, the mobile payment service has over 36m active users. The company has reportedly invested around $220m in Bitcoin, which was one of its main drivers of revenue in 2020. Square is helping to promote the use of cryptocurrency payments among its business users also, so it could become a leading platform for B2B crypto trading. Square is backed by its founder and CEO Jack Dorsey, who is also the CEO of Twitter.

Tesla (TSLA)

In February 2021, electric car company Tesla announced that it had bought $1.5bn in Bitcoin and would start accepting the cryptocurrency as payment for its vehicles. This adoption of Bitcoin as a payment method by the world's leading electric car producer sent Bitcoin’s price to new all-time highs. A few months later, in May 2021, the company’s CEO, Elon Musk, announced a U-turn in policy: the company would no longer accept Bitcoin due to concerns about the currency’s environmental impact, then clarifying in June 2021 that it would only resume accepting BTC as payment once there was conformation that the clean energy usage of the coin’s miners had passed 50% and was on a positive uptrend.

Crypto ETFs to watch

Crypto ETFs are much harder to come by than crypto stocks for a number of reasons. Official exchange-traded funds that are made up of a collection of cryptos, or a specific Bitcoin ETF, may not see approval for a couple of years, due to restrictions at the US-based Securities and Exchange Commission (SEC). This relates to concerns of fraud, manipulation and general volatility of the crypto market. However, there are a few related ETFs that provide exposure to the blockchain ecosystem that are available on our Next Generation trading platform, including the following:

Reality Shares Nasdaq NexGen Economy ETF

This is a passively managed ETF that tracks the performance of stocks involved in the development, research, support and innovation of blockchain technology. The fund has a net expense ratio of 0.68% and holds 58 stocks in total. Top holdings include Overstock.com, NVIDIA and IBM, as well as broader technology companies such as Microsoft, Cisco and Intel. The fund price has risen around 40% between 2020 and 2021.

Amplify Transformational Data Sharing ETF

This ETF represents a handful of funds that invest in businesses involved in developing and utilising blockchain technology behind cryptocurrencies such as Bitcoin. It is an actively managed ETF that seeks to provide total return by investing at least 80% of its net assets in blockchain companies, such as MicroStrategy, PayPal, Square and Galaxy Digital Holdings. The fund has a net expense ratio of 0.70% and has tripled in price between 2020 and 2021.

Large ETF providers such as Invesco are also in talks with the SEC to create more crypto and blockchain ETFs, following its guidance and criteria. Therefore, keep an eye out for news of upcoming crypto ETFs that may help to diversify your trading portfolio.

How to trade on cryptocurrency stocks

  1. Open a live account to start spread betting or trading CFDs on stocks.
  2. Decide whether to buy (go long) or sell (go short).
  3. Read our risk-management guide and place necessary controls, such as stop-loss orders.
  4. Analyse company fundamentals in order to find the most suitable trade for you.
  5. Keep up to date with crypto news and analysis to monitor changes.

What affects the price of crypto stocks?

Crypto prices – these can fluctuate rapidly and often, so it is important to be aware that your share positions may move just as frequently as the crypto market. In particular, stocks that are mainly focused on Bitcoin mining and blockchain technology may move the most, rather than more diverse companies such as PayPal and Tesla.

Supply and demand – as an example from above, NVIDIA’s stock surged due to the high demand for GPUs, which can be used in crypto mining. If there is a higher demand for crypto payments, then the associated share will most likely increase in value as there is more investor interest behind the company’s services.

Crypto restrictions and regulations – the SEC is involved in regulating both the stock and crypto markets. Any unexpected regulation of the cryptocurrency market could impact companies involved in the space.

Production costs – crypto mining companies usually experience higher costs as more crypto is mined and extracted. The process also takes longer, despite the high number of miners that they employ. Therefore, companies need to ensure that they have sufficient funds to cover these operational costs, otherwise this can lead to debt, negative balance sheets and a reduced cash flow. These three factors can lead to negative sentiment towards the business.

Competition – seeing as more companies are getting involved with crypto assets in various ways, this creates competition between products and services that they offer. This can drive share prices up or down depending on where investor attention is directed.

FAQS

What are some examples of blockchain stocks?

Examples of other related blockchain stocks include CME Group, Galaxy Digital Holdings and IBM, some of which are available to trade on our Next Generation trading platform. Open an account to get started.

Are crypto stocks a good investment?

Crypto stocks may provide profitable returns if the crypto market is on a bull run. However, they can be extremely volatile and have an effect on share prices, meaning that you could run into losses. Read our risk-management guide to find out ways to combat the risk of volatility and protect yourself from any sharp movements in the market.

What other stocks are gaining exposure to cryptocurrencies?

Other companies that provide exposure to cryptocurrencies are the Grayscale Bitcoin Trust and CoinShares, who have been buying large amounts of Bitcoin.

What is the difference between cryptocurrencies and crypto stocks?

Cryptocurrencies are digital tokens whose transactions are executed and recorded on the blockchain, which are typically traded on cryptocurrency exchanges. Crypto stocks are companies that are involved in the cryptocurrency market and these tend to trade on traditional exchanges like the Nasdaq or NYSE, such as Coinbase. Please note that the CMC Markets offers spread bets and CFDs on crypto stocks only.

How can I trade on cryptocurrency stocks?

You can trade on the price movements of underlying crypto stocks using our derivative products such as spread bets or CFDs. Learn more about the differences between the two to get started.

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Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

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