Cryptocurrency stocks and ETFs to watch right now

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.

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.

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 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.

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.

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.

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 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.

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.

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.

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.