The cryptocurrency market is in continuous development and is currently extremely popular among investors. More and more public companies and institutional investors turning to crypto digital assets sent the prices of major cryptocurrencies to all-time highs in April 2021.
Just like when trading gold, investors have multiple options at their disposal to gain exposure to the cryptocurrency market. You can own the cryptocurrencies directly, or buy cryptocurrency exchange-traded funds (ETFs) that track the industry, or buy common shares in companies that are invested or have activities in the cryptocurrency space.
In this guide, we explore the latter route to investing in the cryptocurrency space: individual stocks.
Where Can I Buy Cryptocurrency Shares?
Brokerage houses offer common shares or contracts for difference (CFDs) for most of the cryptocurrency shares listed in this guide. To make it easier for you to find a broker, we have shortlisted some of the best brokers with the most competitive spreads.
Overview of the Cryptocurrency Companies
The cryptocurrency market is forecast to grow by a compounded annual growth rate (CAGR) of 60.2% by 2026. This is an extremely elevated growth rate, not seen in other industries. However, as the adoption of blockchain technology increases at exponential rates, worldwide spending on blockchain solutions is expected to follow the forecast CAGR.
What Are the Trading Hours for Cryptocurrency Shares?
Most of the cryptocurrency shares listed in this article are listed over-the-counter (OTC) in the United States. As such, traders must be familiar with the market trading hours in North America. The usual US trading hours are from Monday till Friday 9.30 am to 4 pm Eastern Time
How to Trade and Invest in Cryptocurrency Shares?
Open a Trading Account
You can often open an account with an online broker within minutes by entering your name, email address, and physical address. Regulated brokers will also require you to provide some identity documents unless they can establish your identity electronically. You can then fund your account, usually by bank transfer, debit card, or sometimes even PayPal.Pick a brokerage house that offers these names, open and fund a trading account.
Choose Cryptocurrency Shares
The stocks we present in this guide, and any others that you have in mind, can be found in the lists of tradable stocks provided on the broker’s online trading platform. You should be able to see additional information and a price chart for each candidate stock, to help you make your choice.
Place Your Trade
Placing a trade is simply a matter of entering the amount you wish to invest, or the number of shares you wish to purchase, or your stake size per unit of price movement (for spread bets or CFD trades). Then press the “buy” button. Many traders like to apply a stop order to a newly opened trade to limit the downside risk if the share price goes the wrong way.
Top 10 Cryptocurrency Shares to Buy
The top ten cryptocurrency shares shown below are companies listed on the stock exchange with activities linked to the cryptocurrency space. They have either invested in cryptocurrencies or operate in the crypto universe.
- Marathon Patent Group
- The Crypto Company
- Galaxy Digital
- Hut 8 Mining
- Silvergate Capital
- MGT Capital Investments
1. Marathon Digital Holdings
Involved in data processing and outsourced services, the company formerly known as Marathon Patent Group is headquartered in Las Vegas, Nevada, United States. It mines cryptocurrencies and operates as a digital asset technology company.
- Market capitalisation: $3.01 billion (at the time of writing)
- Listed on Nasdaq under the ticker MARA
- The share price increased by a factor of 28x between November 2020 and April 2021 before losing half of this increase by May 2021
- Announced in January 2021 that it bought the dip in Bitcoin, which then went up to a new all-time high price
2. The Crypto Company
Coming from Malibu, California, the United States, The Crypto Company provides services and education for the Distributed Ledger Technology (DLT) sector and other blockchain solutions.
- Market capitalization: $116.73 million (at the time of writing)
- Listed on the OTC market under the ticker CRCW
- The share price fell far in 2018 due to potential litigation, so this stock may be one to watch rather than one to trade
American company MicroStrategy is involved in building analytics software and services. It made headlines in the second half of 2020 by being one of the first public companies to invest heavily in the cryptocurrency space. Specifically, MicroStrategy converted its treasury from dollars to bitcoins before the Bitcoin price rose from below $10,000 to more than $60,000 in the following months.
- Market capitalisation: $9.98 billion (at the time of writing)
- 2000 employees
- Listed on Nasdaq under the ticker MSTR
- Shares increased tenfold between August 2020 and February 2021 before falling back almost as fast (but not as far)
A Chinese company headquartered in Hangzhou, Canaan provides integrated circuits for Bitcoin mining and other related components. It is also involved in blockchain technology and AI projects.
- Market capitalisation: $1.11 billion (at the time of writing)
- Listed on Nasdaq under the ticker CAN
- Shares rose almost 20x between October 2020 and February 2021 before falling back equally fast
5. Galaxy Digital
An asset management firm from New York, the United States, Galaxy Digital is run by prominent crypto investor and backer Mike Novogratz. It has principal investments in cryptocurrency and blockchain, being one of the public companies with the largest exposure to the sector.
- Market capitalisation: $3.77 billion (at the time of writing)
- Announced investment in a Korean crypto fintech firm
- Listed on the OTC market under the ticker BRPHF
- Shares increased 45-fold between May 2020 and April 2021 before losing half of that increase by May 2021
Expert Tip on Investing in Cryptocurrency Shares“ Cryptocurrency shares have been very volatile, rising by multiples within six months before falling back almost as far and almost as fast. Maybe the money has already been made by traders on the upswing or the downswing, or maybe there’s more money to be made. Either way, it’s all about the price action rather than the companies’ fundamentals. ”
Why Invest in Cryptocurrency Shares?
Cryptocurrencies have revolutionised payment transactions and have become popular as speculative investments by traders who see such technologies as the future or as a hedge against inflation (like gold).
Many brokerage platforms have restricted direct cryptocurrency trades (in assets such as Bitcoin) to traders with professional accounts, so retail traders have been shut out. Therefore, the only way to gain exposure to the cryptocurrency space may be to invest in shares of companies that have exposure to the industry.
Cryptocurrency exposure may not be limited to companies that are obviously involved in this space. In January 2021, Tesla CEO Elon Musk announced that his company had invested $1.5 billion in Bitcoin and would accept bitcoins as payment for its products*. Thus, buying Tesla shares would give indirect exposure to Bitcoin.
* The decision to accept bitcoins as payment was reversed in May 2021.
Frequently Asked Questions
Investors who believe in cryptocurrencies but are afraid of owning directly (or can’t) can gain indirect exposure by investing in crypto-related companies.
Yes. Most countries consider profits from trading as a taxable event, so you’ll likely have to pay some capital gains tax or income tax. Check your local tax regulations before trading.
Trading stocks 24/7 is, by and large, impossible. However, some brokers allow pre-market and post-market sessions where you can place a trade.
An ETF is a fund composed of a basket of cryptocurrency stocks, whereas cryptocurrency stocks are individual equities. The biggest difference between the two is that individual stocks will carry higher risks than investing in a diversified fund.
In addition to diversification, the most common strategy to reduce risk and protect invested capital is by using a stop-loss order.
Cryptocurrencies offer an alternative to traditional investments. Instead of owning an alternative investment such as gold, many millennials prefer digital alternative investments to hedge against inflation while gaining from the possible price appreciation.