Electric car giant Tesla (NASDAQ:TSLA) announced it would start accepting Bitcoin payments for its products this week. Last month, the company invested US$1.5 billion (CA$1.9 billion) of its reserves in Bitcoin. Elon Musk has now fully adopted the cryptocurrency as part of his company’s long-term strategy.
However, Tesla isn’t alone. Some well-known Canadian companies already hold Bitcoin reserves and accept Bitcoin payments. Investors in the crypto space should also find this level of corporate adoption encouraging. Here’s a closer look.
Bitcoin reserves and payments
Canadian cryptocurrency miners tend to hold Bitcoin in reserves as part of their business strategy. HIVE Blockchain Technologies is a great example. The company owns and operates server farms that mint new digital assets. Part of these freshly minted crypto tokens are sold to finance growth. The rest are held in reserve.
As of 2021, the company holds roughly $4.4 million in digital currency reserves. That makes it a proxy for the appreciating value of these tokens.
However, HIVE is a relatively small player in a market that’s starting to look mainstream. Canada’s largest tech company, Shopify, adopted the technology last year. Shopify’s partnership with CoinPayments in May 2020 allowed its network of merchants to accept payment in over 300 cryptocurrencies including Bitcoin.
This means Shopify stockholders are now exposed to the future of cryptocurrencies. This exposure, however, is indirect. If you’re looking for direct exposure you can buy one of the crypto exchange-traded funds (ETFs) that have recently listed.
Two pure-play Bitcoin ETFs have listed on the Toronto Stock Exchange this year. Purpose Bitcoin ETF (TSX:BTCC.B) was the first to market. Since its listing in February, the ETF has been flat. Each unit represents 0.00016756 BTC per share. Altogether, the fund holds 14659.9895 BTC worth over $1 billion.
While the expense ratio on this ETF could be as high as 1.5%, it’s a convenient option for investors looking to add Bitcoin to their tax-shielded accounts. Purpose’s ETF qualifies for your Tax-Free Savings Account and your Registered Retirement Savings Plan. That means future capital gains could be tax-free.
Other recently listed BTC ETFs include CI Galaxy Bitcoin ETF and the Evolve Bitcoin ETF USD – Unhedged. All these funds offer the same exposure. They could deliver tremendous upside if corporations and institutional investors continue adopting digital assets as part of their investment strategy in the future.
Elon Musk announced that Tesla would now accept Bitcoin as payment for its electric vehicles. This marks a pivotal point for cryptocurrencies. Major corporations such as Tesla and Shopify could make digital currencies more mainstream.
Growing adoption could magnify the value of these digital currencies, which is why Canadian investors should consider adding some exposure here. Bitcoin mining stocks are a convenient option, but you could bet on the digital assets directly via ETFs.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned. David Gardner owns shares of Tesla. Tom Gardner owns shares of Shopify and Tesla. The Motley Fool owns shares of and recommends Shopify, Shopify, and Tesla.