Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.

2023-12-30 11:05

Spot Bitcoin ETFs Are Coming: 2 Stocks to Buy Now

You might be wondering, “What’s the big deal?”. If you want to own Bitcoin, why not just own it on a crypto exchange? This is true, but an official, regulated spot Bitcoin ETF allows you to have exposure to Bitcoin in registered retirement accounts like 401Ks. Potentially every investor in America can now have access to Bitcoin without needing to sign up for a crypto exchange or worry about cold storage technology.

On top of that, companies like Fidelity and Blackrock will be buying billions of dollars of spot Bitcoin. When these ETFs get approved, it’s going to be a very big deal. So how can we take advantage of this as investors? Without buying the actual ETFs which might not hit the markets until later in 2024, there are some crypto stocks to have on your radar. Here are 2 that you should add now ahead of ETF approvals.

Coinbase (NASDAQ: COIN)

I feel like I write about Coinbase quite a bit and I do. It’s a stock that has performed extremely well this year so I can understand if you are hesitant in adding shares after such a strong rally. But Coinbase is truly at the center of these spot Bitcoin ETFs. Think of Coinbase as the bridge between cryptos and traditional finance. The company is one of the largest exchanges in the world and the largest remaining US-based crypto company. It is also acting as the custodian for holding the spot Bitcoin for all of these ETFs.

Coinbase is collecting a large number of fees for both trading and its security and storage services. The company has also recently been aggressively expanding to other markets including Canada and Europe. If you are hesitant about starting a position on Coinbase, you can sell some put options to buy the stock at a lower price in the future. Coinbase’s options provide some really high premiums as the stock has had a volatile performance. Either way, 2024 could be a massive year for Coinbase and this coincides with ETF approval and the start of the new crypto bull market.

Marathon Digital Holdings (NASDAQ: MARA)

Okay, I'll admit: I used to think Bitcoin mining companies were terrible investments. It is capital intensive, it takes a ton of energy, and the profit margin isn’t the best. But with Bitcoin going mainstream along with high institutional demand, mining companies are starting to appeal to me again. Marathon is the world’s largest Bitcoin miner with nearly 200,000 active miners. This does not include several other mining sites that Marathon recently purchased as the industry consolidates into a few of the bigger names. Do I love Marathon as a long-term investment? Not really. But I also believe in buying stocks at the right time and when spot Bitcoin ETFs are finally approved, it will be the right time to buy any stock related to Bitcoin. My choice is to go for the biggest and best and right now that’s Marathon Digital Holdings.