Bitcoin has taken the world by storm, but you don’t need to buy Bitcoin directly to invest in it. Another option is to invest in Bitcoin stocks; shares of companies involved in the Bitcoin or blockchain industry.

What Are Bitcoin Stocks?

Bitcoin stocks are shares of companies involved in the cryptocurrency industry. These companies may:

• Mine Bitcoin

• Hold Bitcoin as part of their assets

• Provide services related to blockchain or crypto transactions

Investing in these companies gives you exposure to Bitcoin’s price without directly buying the cryptocurrency.

Why Invest in Bitcoin Stocks?

There are several reasons to consider investing in Bitcoin stocks:

• More Regulation: Bitcoin stocks are traded on traditional stock markets and have more regulatory oversight than crypto exchanges.

• Lower Volatility: While Bitcoin itself is extremely volatile, some Bitcoin stocks can be less so, depending on the company’s broader business activities. For instance, a company that mines Bitcoin but also engages in other ventures may offer more stable returns.

• Easy Access: You can purchase Bitcoin stocks through traditional brokerage accounts, meaning you don’t need to navigate cryptocurrency exchanges, private wallets, or deal with private keys and security risks.

• Diversification: Some Bitcoin stocks are companies that also operate in other industries, giving you a broader investment.

Top Bitcoin Stocks to Consider

Here are some of the top Bitcoin-related stocks for gaining exposure to the cryptocurrency market:

• MicroStrategy (MSTR): MicroStrategy, a business intelligence company, has become famous for holding a large portion of its assets in Bitcoin. By investing in MicroStrategy, you’re essentially betting on both its core business and the value of Bitcoin, since Bitcoin makes up a significant part of its balance sheet.

• Riot Platforms (RIOT): Riot Platforms is a leading Bitcoin mining company. It focuses on mining operations and blockchain technologies. As a miner, Riot’s stock price is closely tied to Bitcoin’s price since higher Bitcoin prices generally lead to increased profitability for miners.

• Coinbase (COIN): Coinbase is one of the largest cryptocurrency exchanges in the world. Its primary revenue comes from transaction fees, which rise as more people buy and sell cryptocurrencies like Bitcoin. If the broader crypto market thrives, Coinbase stands to benefit.

• Marathon Digital Holdings (MARA): Another Bitcoin mining company, Marathon is one of the largest Bitcoin miners in North America. Marathon’s business is highly correlated with the price of Bitcoin, so investing in this stock is almost a direct bet on Bitcoin.

• Tesla (TSLA): Tesla made headlines in 2021 when it announced it had purchased $1.5 billion worth of Bitcoin. While Tesla’s core business is in electric vehicles, its Bitcoin holdings mean its stock price can be influenced by Bitcoin’s price movements.

Steps to Invest in Bitcoin Stocks

Here’s how to start investing in Bitcoin-related stocks:

• Open a Brokerage Account To get started, you’ll need a brokerage account where you can buy and sell stocks. Popular brokerage platforms like MooMoo allow users to trade Bitcoin-related stocks.

• Research the Companies Not all Bitcoin stocks are created equal. Some are more directly tied to Bitcoin’s price, like mining companies, while others, like Tesla, have Bitcoin as a small part of a much larger business. Make sure to research each company’s business model, financial health, and Bitcoin exposure.

• Decide How Much to Invest Just like with any other investment, decide how much of your portfolio you want to allocate to Bitcoin stocks. It’s important to only invest what you can afford to lose, as both the cryptocurrency market and Bitcoin-related stocks can be highly volatile.

• Place Your Order Once you’ve chosen your stocks and how much you want to invest, place a buy order on your chosen brokerage platform. You can opt for a market order, which executes immediately at the current price, or a limit order, which lets you specify the price at which you’re willing to buy.

• Monitor Your Investment Keep an eye on your Bitcoin stocks, especially as the price of Bitcoin can cause rapid price swings. Stay informed about both the company and the overall cryptocurrency market to make well-timed decisions.

Risks to Consider

As with any investment, Bitcoin stocks come with risks. The price of these stocks can be heavily influenced by Bitcoin’s volatility, even if the company has a diversified business model. Regulatory changes or negative sentiment around cryptocurrencies could also impact the stock’s price.

Additionally, the crypto market operates 24/7, but stock exchanges do not. This means that significant price movements in Bitcoin could happen outside of stock market hours, leaving you exposed to gaps in trading.