Cryptocurrency investors woke up with smiles on their faces this week, as Bitcoin (CRYPTO: BTC) surged to a two-year high. The crypto coin exceeded US$57,000 for the first time since November 2021.
The climb in price comes from a number of factors, ranging from institutional buying and optimism about regulations to overall positive market sentiment.
Still, it’s far off from the all-time highs we saw before when many believe it was headed for US$100,000. Plus, it’s expensive, as you can tell. So, in this case, it might be time to consider more diversified options. And these are the three I’d consider if you’re looking at investing in cryptocurrency stocks on the TSX today.
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Direct Bitcoin exposure
If you want direct Bitcoin exposure from your cryptocurrency stocks, then I’d look at Purpose Bitcoin ETF (TSX: BTCC). The exchange-traded fund (ETF) offers exposure to Bitcoin, with other possible advantages as well. This includes no need for a crypto wallet, unlike buying Bitcoin, eliminating technical complexities.
There are also tax benefits, and investors can hold it in their Tax-Free Savings Account (TFSA), for instance. So, you can save it from being taxed, unlike Bitcoin. Furthermore, there is the potential for diversification. Investors can easily add this Bitcoin ETF to their TFSA at a $73 share price. Investors can also afford to diversify to other areas of cryptocurrency stocks as well.
So, if you believe there is a strong future with Bitcoin, then this is likely the way to go, with the ETF climbing right alongside the crypto coin.
Indirect exposure
If you want indirect exposure to Bitcoin, I would suggest going with cryptocurrency stocks involved with mining. For that, look at Hut 8 Mining (TSX: HUT). The stock has unique advantages, as it holds direct exposure from mining crypto. So, if Bitcoin does well, so too does Hut stock. There is also the potential for leverage, however, amplifying the price movements from mining more of the crypto coin.
What’s more, Hut stock doesn’t only invest in Bitcoin but other cryptocurrency stocks as well. So, let’s say there are direct issues with Bitcoin in the future. The company could still do well from its investments in other types of cryptocurrency stocks and coins.
Furthermore, Hut stock has been doing well but is still cheap! The stock trades at $12.65, which is now up 12% in the last year alone. And that’s again still down from 52-week highs this year. So, if you want exposure to multiple types of cryptocurrency, this is the one I’d go for.
Diversification
Finally, if you want exposure to the overall cryptocurrency space and stocks involved, Galaxy Digital Holdings (TSX: GLXY) is an easy option. It offers indirect exposure to Bitcoin but has no direct investment in Bitcoin itself.
The company has diversified exposure through a wider range of cryptocurrency as well as blockchain-related businesses. This includes venture capitalist investments, crypto trading, and other financial products. This helps mitigate overall risk for cryptocurrency stocks.
The company has a deep knowledge of cryptocurrency and the space, with professional managers in charge. Similar to Hut stock, it can help amplify the movement of Bitcoin with more investment in their products as Bitcoin climbs higher.
Shares are no dup 196% in the last year alone! So, clearly, the interest is there, with many believing the company is coming back from the ashes. Therefore, if Bitcoin continues to climb, it’s one of the cryptocurrency stocks I’d latch onto.
