Forget Bitcoin: This Stock Gives You Exposure to All Cryptos

Bitcoin and other cryptocurrencies need a payment gateway for new adopters, which is why Banxa Holdings (TSXV:BNXA) is the ideal play.

| More on:
Big Bitcoin logo.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Why look for a needle in a haystack, when you can buy the entire haystack? That’s the basic principle of diversification. And in the case of cryptocurrencies, I believe this principle is pertinent. Bitcoin, Ethereum, and Dogecoin get all the attention, but there are thousands of other cryptocurrencies, and no one can predict a clear winner. 

Instead of trying to find a winner, I believe investors should add exposure to a proxy for the entire market. The volume of transactions in the cryptocurrency space has skyrocketed in recent months. The industry is now worth US$2 trillion in aggregate. That’s larger than the gross domestic product of most countries. 

Some companies act as gatekeepers and bridges to this new world. These firms are most likely to benefit from the surge in valuations, in my opinion. Fortunately, one such company is listed on the Toronto Stock Exchange. Here’s a closer look at the perfect stock alternative to Bitcoin, Ethereum, or even Dogecoin. 

Crypto payments provider

Banxa Holdings (TSXV:BNXA) is the ultimate crypto play right now. The company offers a payment gateway between new users and cryptocurrency exchanges and devices. In other words, it handles the know-your-customer, anti-money laundering, and identification procedures to allow people to buy and sell crypto with fiat. 

Banxa’s platform supports all digital assets, beyond Bitcoin and Ethereum. It’s also compatible with mainstream payment methods such as debit/credit cards, Interac e-transfers, bank transfers in other countries, and Apple Pay. 

Users don’t pay for these transactions. Instead, Banxa takes a cut from the merchants on the receiving end. Their client list includes heavyweights such as Abra, Binance, Ledger, OKex, among others. 

In April, total transaction value was $110 million, which represents a 1,000% year on year. It’s worth noting that the volume of transactions should increase even if the cryptocurrency market dips, because Banxa may be processing sell and buy orders. However, if the cryptocurrency market sustains its momentum, the stock should surge much higher in the months ahead. 

Bitcoin outlook

Bitcoin’s price has been remarkably stable throughout 2021. That’s despite a severe dip in the tech market. It seems Bitcoin’s correlation to high-growth stocks and tech companies has finally broken. Now, Bitcoin trades as an independent asset class, disconnected from the rest of the economy. 

If this stability can be sustained, it won’t be long before institutional investors and major corporations start adding more BTC to their balance sheets. Further adoption and more transactions is always great news for payment providers like Banxa, which is what makes it the ideal crypto play. 

Bottom line

Bitcoin and Ethereum have had a stellar run over the past year. Smaller, lesser-known digital assets have appreciated even faster. Picking a winner from this gold rush is tricky. This is why I prefer a payment provider that’s exposed to growing adoption for the entire market. Keep an eye on Banxa.

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 owns shares of Banxa Holdings Inc. David Gardner owns shares of Apple. The Motley Fool owns shares of and recommends Apple and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple.

More on Investing

edit Sale sign, value, discount
Investing

3 Cheap TSX Stocks to Buy Before July

Canadian markets have bounced back, but investors can still snag undervalued TSX stocks like Finning International Inc. (TSX:FTT).

Read more »

thinking
Investing

Is Blackline (TSX:BLN) Stock Worth Your Attention in 2022?

Blackline Safety Corp. (TSX:BLN) stock has struggled in the year-over-year period, but there are some positives to glean from its…

Read more »

stock analysis
Investing

Why I’m Buying the Dip in Andlauer (TSX:AND) Stock

Andlauer Healthcare Group Inc. (TSX:AND) stock offered exposure to two promising spaces while offering solid value in late June.

Read more »

clock time
Tech Stocks

Now’s the Time to Load Up the TFSA With These 2 Top TSX Stocks

Here are two top TSX stocks that long-term growth investors may not want to give up on, especially at these…

Read more »

data analyze research
Energy Stocks

TSX Stock Picks With Huge Potential

If you want a TSX stock that's bound for even more strong growth, these three are top picks by analysts.

Read more »

growing plant shoots on stacked coins
Investing

Market Plunge: Double Your Cash With 3 Bargain Stocks

These TSX stocks have corrected over 50%, despite their strong fundamentals, and could easily double from here.

Read more »

oil and natural gas
Energy Stocks

Can Cenovus Stock Outperform in H2 2022?

Is now the time for investors in Cenovus (TSX:CVE)(NYSE:CVE) stock to buy more, or wait out this volatility right now?

Read more »

cup of cappuccino with a sad face
Investing

The Biggest Regret a TSX Investor Can Have

Hydro One (TSX:H) is a top bond proxy to own if you're a TSX investor who's worried about a pick-up…

Read more »