For The Risk Averse, Here’s a Safer Way to Invest in Crypto
Cryptocurrency has been one of the hottest markets around in 2024. It has also been the best returning asset class over the course of the last decade. However, some risk-averse investors are still afraid to take the plunge into this sometimes intimidating market. They just don’t feel ready to learn the tricks of investing in a new and different asset class.
If you are somebody like that, well, I have some good news for you. There are more ways to get exposure to this red-hot asset class than buying spot cryptocurrency. You can ride the wild crypto wave by investing in assets on your usual stock brokerage account.
That’s right, you don’t need to do anything different than you usually do when buying a stock. There are appealing crypto-related stocks that you can easily buy.
Today I want to introduce you to two good investment options for those looking to gain exposure through their stock portfolios. Both Coinbase (COIN) and MicroStrategy (MSTR) are amazing picks to add to your regular brokerage to gain crypto exposure. Let me explain.
Investing in COIN and MSTR provides an indirect yet lucrative way to gain exposure to the booming cryptocurrency market. These companies, while operating in different sectors, share a common thread: their significant exposure to cryptocurrencies and their potential to benefit from the industry’s rapid growth.
Coinbase, often dubbed as the “Amazon of cryptocurrencies,” is the leading cryptocurrency exchange platform in the United States. With over 68 million users and $335 billion in trading volume, Coinbase boasts a dominant position in the market.
Coinbase is the gateway for millions of retail and institutional investors to buy, sell, and hold cryptocurrencies. It also stands to benefit directly from the increasing adoption and mainstream acceptance of digital assets.
The investment thesis behind Coinbase lies in its role as a key infrastructure provider in the crypto ecosystem. As the cryptocurrency market continues to mature and gain legitimacy, Coinbase is poised to capitalize on this trend by expanding its user base, introducing new products and services, and forging strategic partnerships with institutions. Additionally, Coinbase’s revenue model, primarily driven by transaction fees and subscription services, ensures a steady stream of income irrespective of market volatility.
COIN trades in a slightly correlated fashion to Bitcoin (BTC), although it’s undervalued compared to its price around the time it went public in April 2021. Given Coinbase’s effort towards maintaining a good relationship with U.S. regulators and its positioning as the U.S. leader of a burgeoning asset class, its stock is poised to for a much brighter future.
MicroStrategy, a business intelligence firm, made headlines in the financial world by adopting Bitcoin as its primary treasury reserve asset. MicroStrategy’s CEO, Michael Saylor, is a vocal advocate for Bitcoin, believing it to be a superior store of value compared to traditional fiat currencies.
By allocating a significant portion of its cash reserves into Bitcoin, MicroStrategy not only hedges against inflation but also positions itself to benefit from the appreciation of the digital asset over time.
The investment thesis for MicroStrategy revolves around its unique approach to capital allocation and its bold bet on Bitcoin. As one of the early corporate adopters of cryptocurrency, MicroStrategy has differentiated itself from its peers and attracted attention from investors seeking exposure to the digital asset space. MicroStrategy’s analytics focus ensures steady revenue, complementing its Bitcoin holdings and offering unique exposure to the cryptocurrency market.
MSTR trades like a high beta play on Bitcoin. That means it can be even more volatile than cryptocurrencies at times. It also means that when Bitcoin is hot, MSTR is on fire. If you share my belief that the crypto market will continue to grow over the course of the next year or two, MSTR can be a great way to capitalize on that growth.
Both Coinbase and MicroStrategy offer investors a compelling opportunity to gain exposure to the burgeoning cryptocurrency market. While Coinbase serves as a direct gateway for investors to participate in the crypto ecosystem, MicroStrategy provides indirect exposure through its sizable Bitcoin holdings.
As the adoption of digital assets continues to accelerate, these companies are well-positioned to capitalize on the growing demand for cryptocurrencies and deliver substantial returns to their shareholders in the long run. The best part is you can buy these crypto-exposed assets in your regular brokerage account, 401k, or Roth Individual Retirement Account (IRA).
Best,
Alex
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