More and more companies with a crypto focus can also be traded on the well-known stock exchanges. It is therefore worth taking a look at the individual titles, especially for stock fans who are looking for regulated ways to enrich their securities portfolio with the crypto industry. Especially since the correction of the last few weeks could offer attractive entry prices. Which stocks are particularly promising. Here are the top 5:
1) Coinbase (WKN A2QP7J) – market capitalization around 43 billion euros
The largest American crypto exchange is particularly professional. While competitor Binance is a bottomless pit from a regulatory point of view, it turns out Coinbase as a model student of the authorities. It also fits that Coinbase was the first company in Germany to receive a crypto custody license. With the market entry of the old economy, i.e. established banks and exchanges in the crypto sector, it is all the more important to be able to keep up in terms of regulation. Without appropriate licenses, crypto companies are unlikely to gain sufficient investor confidence. Especially since advertising options and customer contact are also limited without licenses.
Another advantage of Coinbase stock is that the exchange already has a reputation as a custodian for institutional investors. The big players, such as Tesla, often work together with Coinbase. Assuming that the Insti business in particular will increase in 2022, there should still be a lot of growth possible here.
Coinbase therefore has everything it needs to increase its sales through expansion (see Germany and the EU) and the expansion of the product range (such as new lending business). In perspective, the American market leader should have a good chance of becoming a fixture in both the crypto and traditional financial world.
2) Block ex Square (WKN A143D6) – market capitalization around EUR 58 billion
Former Twitter founder and crypto fanatic Jack Dorsey rebranded his payment services company Square to Block in December 2021. The Block cash app has around 40 million active users (last stand autumn 2021). As attractive as these figures may seem, one must not forget that the main competitor Paypal has over 75 million active users with its comparable Venmo app. As natural as the integration of crypto services is for both apps, Block is likely to be more consistent here.
Not only is the Block company one of the five largest Bitcoin holders among the listed companies with a stock of 8,027 BTC, Dorsey also wants to develop a decentralized exchange (DEX) and wallet. The entire crypto ecosystem is supposed to gather under Block. Hardly any other stock exchange company of this size should proceed as progressively as Block – that’s what Jack Dorsey stands for with his name.
3) Marathon Digital Holdings (WKN A2QQBE) – market capitalization around 2.7 billion euros
Marathon Digital is one of the leading American Bitcoin mining stock companies and has been able to expand significant mining capacities through Bitmain Asic miners in recent months. At the end of December 2021 alone, the company acquired mining hardware for almost $900 million – an industry record. At the same time, with BlackRock and Fidelity, two giants are invested in the hundreds of millions as shareholders. In addition, Marathon Digital had raised half a billion US dollars in fresh capital through a bond issue in November 2021.
The enormous clout of the company is further enhanced by the centralization of mining in the USA. Since the mining ban in China in April last year, the hash rate in the USA has increased massively. At the same time, the political unrest in the mining stronghold of Kazakhstan means that American bitcoin mining companies are benefiting. In addition to the geostrategic advantages, Marathon Digital is also progressive when it comes to sustainability. According to the company, 70 percent of the computing operations are already CO₂-neutral. In view of the socio-political pressure to achieve climate neutrality in mining, Marathon Digital should also be well positioned here.
However, one should never forget that mining companies are more dependent on rising Bitcoin prices than other crypto companies. The enormous hardware and energy costs always represent a high risk. It is not for nothing that mining companies are compared to leverage investments in the respective underlying.
4) Bakkt Holdings (WKN A3CY4P) – market capitalization 305 million euros
Bakkt became known for its physically secured Bitcoin futures, which are traded on the Intercontinental Exchange, which in turn belongs to the New York Stock Exchange. Since October 2021, investors have also been able to purchase the company’s shares on the stock exchange. Similar to Coinbase, Bakkt should also benefit from further inflows of funds from institutional investors in 2022.
In addition, the company offers various other crypto services from crypto gift cards to its own crypto payment and portfolio app. In this context, the cooperations entered into in 2021 could pay off. Be it the credit programs with Starbucks or the hotel chain Wyndham or the partnership with Mastercard. In October 2021, for example, it was announced that Bakkt and Mastercard would jointly offer crypto services to their large customer base. The strong positioning under the umbrella of the New York Stock Exchange with simultaneous cooperation partners who can generate millions of new customers at once makes Bakkt so interesting as a crypto share.
5) Galaxy Digital Holdings (WKN A2JRV8) – market capitalization 5 billion euros
Galaxy Digital’s charismatic CEO, Michael Novogratz, is known for his media reach and bullish statements. After competitor Grayscale, Galaxy Digital is the largest crypto asset manager. Like other players with a focus on professional investors, Galaxy Digital should benefit from the primarily institutional customer base in 2022. At the same time, the company is diligently investing in various companies in the crypto industry. So it’s no longer just about Bitcoin, but also about NFT and DeFi projects. Digging into the entire crypto ecosystem is underpinned by strong numbers. In the last two quarters (Q3 2021 and Q4 2021), the company was able to post around half a billion US dollars in profits.
Crypto Stocks: That Conclusion
The selection of listed stock corporations with a clear crypto focus (pure play) is currently still manageable. Nevertheless, some interesting candidates can be found that should benefit from the market growth, especially in the long term. Surely you can’t get a bargain anymore based on the valuations in the billions, but if you want to hold shares with crypto exposure in addition to cryptocurrencies, you don’t have to look into the tube.
If stock picking is not for you, you could also take a look at the VanEck blockchain ETF (VanEck Vectors Digital Assets Equity ETF) throw. In addition to 20 other stocks, you will also find the five titles presented there. Alternative ETFs would include the Invesco CoinShares Global Blockchain ETF or ETC Group Digital Assets and Blockchain Equity ETF.
Disclaimer: The article only reflects the opinion of the author. It is not investment advice or a recommendation to buy or sell.
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Five crypto stocks that have potential in 2022