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:

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.

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

Business success of growth metaverse finance and investment profit graph concept or development analysis progress chart on financial market achievement strategy background with increase hand diagram
Dividend Stocks

TFSA Strategy: Turn $25,000 Into $130 in Monthly Passive Income

This TFSA strategy invests $25,000 across two monthly REITs to generate approximately $130 in tax-free passive income every month.

Read more »

dividends grow over time
Dividend Stocks

2 Dividend Stocks to Lock-In Right Now for Long-Term Passive Income

These stocks are off their highs and pay attractive dividends.

Read more »

investor schemes to buy stocks before market notices them
Dividend Stocks

Here’s a 6.6% Dividend Stock Trading Near a 52-Week Low

This Canadian stock currently trades just 2% above its 52-week low while offering a juicy 6.6% annualized dividend yield.

Read more »

stocks climbing green bull market
Dividend Stocks

This 5%-Yielding Dividend Stock Could Turn $20,000 Into $95.64 a Month

$20,000 can turn into nearly $100 a month in dividends, but only if the cash flow behind the yield is…

Read more »

Investor wonders if it's safe to buy stocks now
Bank Stocks

Is BMO Stock Still a Good Buy in September 2026?

BMO stock has pulled back after a strong rally, but improving adjusted earnings, credit trends, and shareholder returns could keep…

Read more »

Real estate investment concept with person pointing on growth graph and coin stacking to get profit from property
Dividend Stocks

This TFSA Setup Could Generate Over $110 a Month

This TFSA setup invests $30,000 across an ETF and two REITs to generate over $110 a month in tax-free income.

Read more »

coins jump into piggy bank
Bank Stocks

How Much Do You Actually Need in Your TFSA to Retire Comfortably?

CRA data shows that average TFSA values continue to rise across many older age groups, but building retirement wealth is…

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Stocks for Beginners

Why I’m Using These 3 Canadian Stocks as My TFSA Cornerstones

Craft a robust portfolio by investing in stocks that are resilient and capable of thriving during challenging times.

Read more »