Whether you are a big believer in cryptocurrencies or not, it’s hard to deny that the concept is an intriguing one. The idea of a digital currency that acts as a medium of exchange and is essentially impossible to counterfeit or double-spend has attracted plenty of attention in financial markets. As investors, being open to change and exploring new ideas is a key to long-term success. This is why many investors are interested in companies that offer exposure to cryptocurrencies at this time.
Since the majority of cryptocurrencies are notorious for their huge price swings and volatility, investors should consider them a highly speculative asset class. The same goes for many of the companies that offer exposure to cryptocurrencies since they oftentimes trade in tandem with the price of major cryptocurrencies such as Bitcoin. With that said, some of these stocks offer investors a way to gain exposure to this fascinating technology with less risk than buying the actual cryptocurrencies themselves. Keep reading below for a brief overlook of 3 stocks to watch that offer exposure to cryptocurrencies.
Marathon Patent Group (NASDAQ:MARA)
If you aren’t too familiar with cryptocurrencies, one of the important things to know is that they are “mined”, which in basic terms is the process of keeping blockchain data up to date. Marathon Patent Group is a company that specializes in bitcoin-mining, which makes it an interesting stock to watch if you are interested in cryptocurrencies. Marathon operates one mining facility in Quebec and offers mining solutions with its proprietary infrastructure and smart mining software.
The stock has risen substantially alongside the price of cryptocurrencies and tends to mimic the price performance of Bitcoin. The company has issued several direct offerings of common stock to raise funds for more mining machine purchases, which could be a good thing for the company long-term. Year-to-date, Marathon Patent Group stock has risen 88%. Keep in mind that this can be a very volatile stock, but if you are interested in a company that could become one of the only pure-play cryptocurrency stocks, it is worth keeping an eye on.
Another great option to watch if you are interested in companies with cryptocurrency exposure is Square. The fintech company’s primary business involves making commerce easy for sellers by providing payment processing tools. You might have seen the company’s square hardware pieces that fit into phones and mobile devices and allows business owners to swipe credit cards for payment processing. However, Square has been steadily adding exposure to cryptocurrencies and offers investors a lower-risk way to gain exposure to the burgeoning industry.
Back in October, the company added $50 million worth of Bitcoin to its balance sheet as the company “believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose”. Square also offers bitcoin trading on its Cash App application, which could generate strong revenue growth for the company over time. The bottom line here is that Square is an innovative and forward-thinking company that offers investors a lower-risk way to gain exposure to cryptocurrencies like Bitcoin.
Intercontinental Exchange (NYSE:ICE)
Intercontinental Exchange is a company that operates an electronic marketplace offering exchange-based and over-the-counter trading of a variety of different products and commodities. It owns the New York Stock Exchange and also generates significant revenue by selling proprietary data derived from its order flow. Investors should easily be able to recognize the potential that a company like ICE has when it comes to cryptocurrency.
ICE already offers physically-settled monthly Bitcoin futures contracts that help market participants hedge and manage risk. It also offers access to price discovery data that is crucial in accurately valuing the crypto market. As cryptocurrency continues to increase in popularity, investors can count on a company like ICE to deliver new cryptocurrency products and services. ICE saw its year-to-date revenue reach $4.4 billion in Q3, an increase of 12% year-over-year and it has been known to aggressively acquire new companies to drive growth. If you are looking for a company that could play a critical role in the future of the cryptocurrency market, look no further than Intercontinental Exchange.
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