Calyx will be the next one on this list 12 Ways to Play Bitcoin...Without Buying Bitcoin -- Barron's Blog
Friday, December 08, 2017, 10:38 AM ET
By Crystal Kim
The price of bitcoin surged Thursday, climbing 40% in 40 hours to above $16,000. It and other cryptos have seen astronomical growth this year, but investors who can't own bitcoin outright in their portfolios might want to consider other ideas leveraged to bitcoin and blockchain.
Thomas Lee, bitcoin bull and managing partner of Fundstrat, published a note Friday morning highlighting 12 stocks that benefit from bitcoin gains, transaction activity, and mining. An equal-weighted basket of these stocks is up 135% year-to-date, writes Lee. Of course, that's nowhere near the 1,685% appreciation of bitcoin.
Among names that stand to gain the most from bitcoin price moves is Bitcoin Investment Trust ( GBTC), which is down about 6% so far this morning, according to Morningstar. Others include mining companies that authenticate transactions, maintaining network security via computing power. Of those, he likes MGT Capital Investments ( MGTI), a miner owned by McAfee based in Washington that is apparently leasing farmers' utility rights to get power at wholesale cost. "With 5,000 rigs, MGT Capital will be a major miner," says Lee.
Bitcoin miners require a lot of electricity, so Hive Blockchain Technologies ( HIVE. Canada) and U.S. Global Investors ( GROW), mine in Iceland where electricity is cheap. Digitalx ( DCC.Australia), the last of the most leveraged equities, is an initial coin offering advisory and blockchain consultant.
Transaction leveraged names of course include CME Group ( CME), Cboe Global Markets ( CBOE), and Goldman Sachs ( GS). CME and Cboe are expected to bring cash-settled bitcoin futures to market very soon and given they will be the only major providers, they could see earnings growth. Lee thinks Goldman will be a "first mover" among investment banks.
Nvidia ( NVDA) and AMD ( AMD) are graphics processing unit or GPU card producers for token mining. Miners use GPUs for tokens other than bitcoin. Bitcoin mining relies on specialized chips, but Lee thinks that has blockchain grows and transactions rise, miners will require more GPUs to meet demand.
Then there's Overstock ( OSTK) and Square ( SQ). Overstock's Medici Ventures is a blockchain business and of course, the retailer accepts bitcoin as payment. Square recently announced that users can buy and sell on its platform.
Some of these names are small and thinly traded, but they could be worthwhile in the context of Lee's 2022 year-end target of $25,000.
More at Barron's Focus on Funds blog, https://www.barrons.com/focus-on-funds
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December 08, 2017 10:38 ET (15:38 GMT)
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