Bitcoin (BTC) has treated its faithful well in 2023, having appreciated over 80% year to date. However, there may be better ways for investors to capitalize on the asset’s success besides stacking actual sats.
Here’s a look at how some Bitcoin-related assets and companies are performing next to BTC, from financial companies to mining stocks.
Mining Stocks Are Booming
Shares for multiple publicly traded Bitcoin miners surged on Friday, including CleanSpark (CLSK; 11.32%), Riot Platforms (RIOT; 14.33%), and Hut 8 (HUT; 6.14%). Bitcoin, by contrast, only rose by 1.42%.
This year alone, all three miners have seen their share prices at least triple in value. Rival mining firm Iris Energy, which rose 9.5% on Friday, is up a whopping 48% since January 1.
Miners’ balance sheets and revenue are directly connected to Bitcoin’s price, as such firms receive a fixed number of Bitcoin every ten minutes as newly minted coins from the network.
Many such miners have made major infrastructure investments this year in preparation for the “halving” – an event that cuts Bitcoin’s network emissions in half and is widely thought to catalyze Bitcoin bull markets.
While the industry’s upside looks promising, it can also encounter even greater downside volatility than BTC. Core Scientific (CORZQ), for example, saw its share price collapse over 80% in a single day in October after revealing it was not in a position to pay back its debt.
Exchanges and ETFs
Another publicly traded firm outpacing Bitcoin this year is Coinbase (COIN) – up 134% YTD. Though the U.S. Securities and Exchange Commission (SEC) sued the exchange last month, Bitcoin’s positive price action, Coinbase’s optimistic Q1 earnings numbers, and a partnership with BlackRock for a planned Bitcoin spot ETF all spell good fortune for the company.
BlackRock’s filing has markets more optimistic that a spot ETF could finally get past the SEC, paving the way for other firms to follow suit.
This makes the Grayscale Bitcoin Trust (GBTC) another enticing buy: Shares for the fund have traded at a discount well below the value of its underlying Bitcoin for years. However, if its effort to convert into a spot ETF proves successful, that discount will immediately be restored to parity, creating added value for investors. The discount currently stands at 27%.
Until a Bitcoin spot ETF is approved, MicroStrategy (MSTR) is one of the better alternatives that are available, up 162% YTD. The software company – whose balance sheet includes over 150,000 BTC – frequently issues stock to buy more Bitcoin, much like an ETF.