Investing in cryptocurrencies can be a gut-wrenching endeavor. It’s been just over a decade since Bitcoin ( CRYPTO:BTC ) made its debut, and thousands of other blockchain, digital token, and coin projects have been launched in the wake of the original crypto’s success. Add in ambitious concepts closely tied to crypto like web 3.0, the metaverse, and decentralized finance, and it all sums up to a daunting new tech movement that can be difficult to decipher and invest in.
Not to worry, though. If crypto investing has been unkind to you thus far, or you just aren’t sure where to start, a handful of stocks might be up your alley. Three Fool.com contributors think Block ( NYSE:SQ ), MicroStrategy ( NASDAQ:MSTR ), and Interactive Brokers ( NASDAQ:IBKR ) are worth a look right now. Here’s why. Image source: Getty Images. Betting big on Bitcoin, without directly buying Bitcoin
Nicholas Rossolillo (Block): Investing is all about future cash flows, so buying shares of a company that does something with an asset can be a far better generator of wealth in the long term than simply buying the asset itself. The same goes for crypto, which is why Block (formerly known as Square) is one of my favorite ways to play the blockchain revolution .
In late 2017, Block subsidiary Cash App started testing Bitcoin trading capabilities, and it’s been a huge catalyst for new user additions ever since. But this is more than just a crypto trading app. To help facilitate the feature, Block had a little over 8,000 Bitcoins on its own balance sheet at last report — worth over $390 million as of this writing. So if you own Block stock, you also indirectly have a notable position in Bitcoin as well.
But there’s a lot more at work here than a passive play on Bitcoin or consumer interest in trading it. Block’s recent name change reflects the company’s belief that blockchain technology and cryptos will play an integral role in the future of the digital economy. Two other Bitcoin-focused Block subsidiaries, Spiral and TBD, are working on new everyday uses for the digital currency — perhaps more digital payments capabilities, lending products, and other digital transactions . CEO Jack Dorsey has even said the company might be considering setting up its own Bitcoin mining operation.
While Block champions this new tech frontier, shareholders get a growing business focused on both small business and consumer digital financial services. Gross profit, which mostly strips away the Bitcoin trading segment, was up 43% year over year to $1.13 billion in Q3 2021. Shares currently trade for just over 18 times trailing-12-month gross profit-to-enterprise value. It’s a premium price tag, but not unreasonable for a fast-expanding company with big aspirations for the financial services sector of the global economy. If you want to invest in crypto , I believe Block is a great place to get started. Higher returns and limited risk — where do I sign up?
Anders Bylund (MicroStrategy): Let me be clear: […]