Gaining Exposure to Crypto Through the Stock Market

Louis Sykes
July 22, 2021

What was once peanuts, the total market cap of this asset class achieved the $2T milestone at its peak earlier this year.

It's hard to believe, but there are literally several thousands of individual coins and tokens, and the list keeps growing every day.

Not only can we express our opinions in the coins themselves, but there's an expanding list of pure-play stocks, ETFs, and funds being offered to investors, too.

So today, we'll dive into some of these offerings, what sets them apart, and ultimately, how we're approaching these vehicles in the coming weeks and months.

Let's jump into it with one of the largest blockchain-oriented ETF right now.

Here's Amplify's Transformation Data Sharing ETF $BLOK:

This ETF has just over $1B under management, which is a considerable amount in crypto terms.

We found that compared to the alternatives, BLOK is more concentrated, with the top 10 holdings consisting of over 40% of the ETF. Some of these include PayPal at 6%, Microstrategy at 6%, Square at 5%, Digital Garage at 4%, etc...

Ultimately, in terms of the actual ETF itself, we only want to be long if it's above 43.80. If it's below that, we actually prefer it short.

Siren's NexGen Economy ETF $BLCN is another big one to pay attention to, with an AUM of just over $300M:

BLCN happens to be a lot less concentrated than BLOK, with 20 additional holdings and the top 10 only making up 20% of the ETF.

43 is the level there, too.

However, we'd only want to be buyers of BLCN if the relative ratio can get back above 0.11. Otherwise, there's too much opportunity cost at stake, at least for now.

Note: If you're not already receiving our daily Crypto notes in your inbox, contact Peter to learn how to get added to the list

Here's another crypto ETF, LEGR:

This one is even more diversified than the other two, and we found that the exposure to crypto-related names is noticeably less. So for those looking only for pure-play names in the industry, there are arguably better alternatives to gain exposure to this space.

Regardless, 43 is the key level there, too (it all happens to be about 43 for these crypto ETFs, right?)

The NextGen Protocol ETF $KOIN is another fund that gets thrown around a lot too:

We purposely overlaid KOIN with mega-cap growth just to reflect how closely these two trade.

In fact, we find it hard to call KOIN a crypto ETF in the first place, with it being dominated by all the usual suspects, like Microsoft, Nvidia, Amazon, Visa, Taiwan Semi, Intel, and so on...

Before we dive into some of the components of these indexes, we thought BITQ, DAPP, and BKCH were all worthy mentions but didn't include them simply because they were either too small, or didn't have an extensive enough price history.

Moving to the individual stocks, here's Microstrategy $MSTR:

This name is about exposed to cryptocurrencies as you can get, with the CEO taking out corporate bonds to HODL Bitcoin...

We're stuck in this clear range from 450-670. For us, there's nothing to do while price remains this range.

We'd only want to be long above 670 and short below 450. Neutral in the meantime makes the most sense.

Riot Blockchain $RIOT is still trapped beneath overhead supply at 40 bucks.

We're leaving it alone until buyers can drag prices beyond that level, at least for now.

This same rangebound mess applies to Coinbase $COIN:

Is this a tradable bottom, or just a continuation pattern that'll resolve lower?

Time will tell, but 210 and 250 are the big levels to watch out for on the down and upside.

29 bucks is the key level in the sand for Marathon Digital Holdings $MARA:

If it's below there, we think it's a short back to 16.

Otherwise, if MARA's above that critical 29 level, we can take a shot on the long side, but we cannot be short.

Signature Bank $SBNY is another name that has exposure to this space, with a sizeable chunk of its revenue stream coming from the crypto space:

If we're above 220, we're long SBNY with an upside objective of 317.

Silvergate Capital falls in the same category as another one of the more "crypto-friendly" financial institutions out there:

After last year's runup, the stock has been a sideways mess, consolidating its gains.

If SI can sustain a move above 112, the bias is higher toward the former all-time highs of 176.

Today's post has been centered around the stocks with exposure to cryptocurrencies, not the cryptocurrencies themselves.

Crypto ETFs featuring actual tokens still aren't a viable option for many investors, so the easiest way to gain exposure here is through different trusts offered by providers like Grayscale and Osprey.

These can include diversified cryptocurrency portfolios, or single-coin products in Bitcoin, Ethereum, and some of the other key Altcoins. Osprey, for instance, provides an Algorand and Polkadot fund for investors in addition to their primary Bitcoin offering.

Be sure to let us know if you have any questions at all.

Allstarcharts Team

 

Reminder: If you're not already receiving our daily Crypto notes in your inbox, contact Peter to learn how to get added to the list

 

Filed Under: