What can’t be denied is the craziness and the volatility that the cryptocurrency market has experienced in 2017. Bitcoin is up over 1,000% this year so far. Obviously, at the time you are reading this the price could be far higher or lower due to the extreme volatility. The only thing more evident to bitcoin’s meteoric increase this year has become the intense volatility that we have seen in the movement of cryptocurrency price.
Bitcoin Currency or Bitcoin Stocks?
For all those still just a tiny bit perplexed, bitcoin is a cryptocurrency. The definition of a cryptocurrency is “an electronic currency where encryption methods are utilized to modulate the creation of components of money and check the transfer of capital, working independently of a central bank.” Consider it as a money that doesn’t require an intermediary to finalize transactions.
A blockchain is a decentralized ledger, meaning it isn’t governed by a central authority such as a bank and could be obtained by numerous parties at several times. A finalized trade is listed on a “block”. It’s inserted to the conclusion of the series in order after the block is complete and becomes a part of the database. The blockchain records trade details such as the quantity and period, but anonymizes the parties that took part.
While the growth of bitcoin was fascinating to observe, many are doubtful of its latest run-up (like yours truly). The good news is there is a way to gain exposure to the cryptocurrency market without having to buy any individual cryptocurrencies. The following 3 stocks may be a better way to put money into Bitcoin or other cryptocurrencies.
Top Three Cryptocurrency Stocks
Bitcoin Investment Trust (NASDAQOTH:GBTC)
There is not a equity using a stronger correlation to the price of bitcoin compared to Bitcoin Investment Trust (NASDAQOTH:GBTC). Developed by Grayscale, the Bitcoin Investment Trust possesses a relatively fixed quantity of the currency, meaning it is unbelievably simple for investors to figure out the net asset value of those holdings. At the end of October, roughly 173,000 bitcoins were held, which in the current record cost of $9,596 works out to $1.64 billion.
On the other hand, the Bitcoin Investment Trust finished with a market cap of $1.84 billion in 2017. As of Friday’s close, the Bitcoin Investment Trust was appreciated in a 30% premium for its possessed bitcoin assets. It’s always been priced in a 25 percent to 125% superior for its owned resources. Yes, there is the possibility for extra liquidity through broker trading, but you may still own Bitcoin without buying it through a investment security.
First Bitcoin Capital Corp. (NASDAQOTH:BITCF)
If my arm were twisted and I had been forced to select the security with the most volatile bitcoin inventory, it’d be First Bitcoin Capital Corp.. (NASDAQOTH:BITCF), which has seen its shares increase in value by 2,650% in 2017.
First Bitcoin Capital’s profile suggests that it works digital money exchanges and develops digital monies and novel blockchain technology. But if that’s true, it has virtually nothing to show for it up to now. Worthwhile for a company which once commanded nearly a $1 billion market cap. Additionally, it is worth noting that the cryptocurrencies it has brought to market have some volume over the prior period, suggesting there may be opportunity in the future to expand its cryptocurrency offerings.
The third cryptocurrency stock you would probably be best leaving for short-term speculators and swing traders will be Overstock.com (NASDAQ:OSTK). Although Overstock has an internet retail business that’s been its bread and butter since its inception, the business has made waves by being the first to accept all major forms of electronic money, including bitcoin, Ethereum, bitcoin cash, LiteCoin, Monero, and Dash. It’s also developing a blockchain-based securities lending system designed to compete with Wall Street.
While Overstock’s acceptance of virtual currencies has made it a Wall Street darling one of crypto-enthusiasts, it has not done anything for the company’s best- or bottom-line results. It is unclear if their new blockchain technology is going to be adopted by large businesses, especially considering how the landscape has become. As such, It is best to be careful with your outlook on Overstock.com. If their blockchain technology becomes mainstream, there could be major upside.