Fundstrat
Bitcoin is still too risky for many investors with a lot of money at stake.
But there's a handful of stocks that stand to benefit from bitcoin and the underlying blockchain technology, according to Tom Lee, a strategist at Fundstrat and one of the most prominent advocates for the cryptocurrency.
The basket of 12 stocks he recommended in a note Friday has gained 136% this year. That's more than the S&P 500's 18% rally, but is dwarfed by bitcoin's 1,588% rise.
"We believe investors should have exposure to blockchain, particularly given bitcoin has essentially zero correlation to equities, bonds and commodities — hence, as a portfolio strategy, bitcoin is a good diversification tool," Lee said. He sees one bitcoin costing $25,000 by the end of 2022.
The stocks Lee recommends offer "three types of leverage— (i) price gains of bitcoin/tokens; (ii) transaction activity (either wallets or exchanges); and (iii) mining based on proof of work or proof of stake."
Here they are, in ascending order of how much exposure Lee estimates they have to bitcoin:
SquareMarkets InsiderTicker: SQ
Market cap: $14.8 billion
Year-to-date performance: 179%
Comment: Allows bitcoin to be bought and sold, accepts bitcoin.
Source: Fundstrat
Goldman SachsMarkets Insider
Ticker: GS
Market cap: $94.4 billion
Year-to-date performance: 4.5%
Comment: Likely "first mover" investment bank in bitcoin.
Source: Fundstrat
OverstockMarkets Insider
Ticker: OSTK
Market cap: $1.13 billion
Year-to-date performance: 158%
Comment: Accepts bitcoin and owns Medici Ventures, its blockchain subsidiary.
Source: Fundstrat
Cboe Options ExchangeMarkets Insider
Ticker: CBOE
Market cap: $14.13 billion
Year-to-date performance: 70%
Comment: Offers bitcoin futures.
Source: Fundstrat
CME GroupMarkets Insider
Ticker: CME
Market cap: $52 billion
Year-to-date performance: 33%
Comment: Will launch bitcoin futures.
Source: Fundstrat
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