Further, over the past month, Marathon Digital’s stock’s lost one-third of its value. It would seem that investors have decided MARA stock is not the best way to play crypto in 2021.
If that’s the case, what are the best bets over the next eight months and beyond? I’ve got three suggestions.
InvestorPlace’s Faizan Farooque recently discussed five Blockchain ETFs that are making things happen. Of the five, Amplify Transformational Data Sharing ETF (NYSEARCA:BLOK) has gathered the most assets at $1.29 billion. It’s also the only ETF of the bunch that owns some of the crypto miners, including Marathon Digital, at 3.87% of its portfolio.
So, I’m going to go with three of its holdings.
The First Choice Other Than MARA Stock
My first choice is Nocturne Acquisition Corp (NASDAQ:MBTC). It is a special purpose acquisition company (SPAC) that sold 10 million units to raise $100 million in late March.
“[W]e intend to concentrate our efforts in identifying a target in the disruptive technology market with an equity value of approximately $300 million to $1 billion,” states its prospectus. “We believe disruptive technology companies that focus on blockchain and artificial intelligence are potential attractive targets.”
I realize it’s a bit of a moonshot, but given the SPAC’s CEO is already involved in a moonshot artificial intelligence company backed by high-profile investors such as the Gigafund, I couldn’t resist.
I’ve lost some of my interest in SPACs, but given it’s trading below its $10 IPO price as I write this, I feel as though the downside isn’t nearly as high as what might happen to MARA stock should it report any bad news in the next 2-3 months.
The Second Choice Is BLOK’s Top Holding
MicroStrategy (NASDAQ:MSTR) is the top holding in BLOK with a weighting of 5.41%. If you’re unfamiliar with MSTR, it is a provider of enterprise data analytics and business intelligence software.
However, the company’s decision to purchase Bitcoin for its balance sheet has garnered so much interest.
“In 2020, our company determined that there was a tectonic shift taking place in the financial markets and overall economy. To meet the cost of capital and to enhance the value of the company, we took the innovative approach of adopting bitcoin as our primary treasury reserve asset,” CEO Michael Saylor wrote in MicroStrategy’s 2020 shareholder letter. “We were the first publicly-traded company to pursue this
strategy and purchase bitcoin on a large scale.”
It held 91,579 Bitcoin as of Apr. 5, 2021. These were purchased at an average price of $24,311 per Bitcoin. As I write this, Bitcoin is trading at $56,127. That’s a 131% return on its investment to date.
In a Time interview in March, Saylor suggested that the company’s move was “a rational action in response to monetary inflation.” He believes it’s a unique new technology and a legitimate store of value. The article is a quick but interesting read.
As a result of its investment in Bitcoin, Saylor stated in his shareholder letter that it is looking for ways “to apply bitcoin-related technologies such as blockchain analytics into our software offerings.”
I believe the most successful crypto and blockchain investments will be those that provide utility. MicroStrategy will continue to look for ways to add value to its clients. Blockchain is one of them.
A Very Interesting Third Option
If you go to SBI Holdings’ (OTCMKTS:SBHGF) website, your first impression will probably be that a preschooler designed it. It isn’t very good, but that’s what has me interested.
SBI first announced in October 2020 that Ripple Labs would invest in MoneyTap, the company’s blockchain money-transfer app first developed by SBI Ripple Asia, a joint venture between the two companies in 2018. MoneyTap uses RippleNet to provide payment services.
SBI’s latest fiscal year was a good one, with sales up 47% over last year to 541.1 billion Japanese Yen ($5.0 billion) with profits of 116% to 81.1 billion Japanese Yen ($740.0 million).
Of the three, SBI intrigues me the most, but clearly, I’ve got to do some more reading to understand what precisely an investor gets by buying its stock. At first blush, though, I can see why it’s BLOK’s eighth-largest holding.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Fintech Zoom Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.