By Carolina Wilson and Tom Lagerman
(Bloomberg) --Maybe you don’t want to pay $10,000 for bitcoin. Or perhaps you’re scared that the world’s fastest growing currency is an asset bubble.
But if the FOMO is real, there are other not-so-obvious ways to bet on cryptocurrencies in the U.S. stock market.
With no bitcoin-specific exchange-traded fund on the market, many U.S. investors have turned to The Bitcoin Investment Trust ( GBTC), a private trust that trades over the counter. It invests exclusively in the cryptocurrency and derives its value solely from its price, but it isn’t bitcoin. Thomas Lee, an uber bitcoin bull who heads research for Fundstrat Global Advisors, sees GBTC hitting $2,800 by 2022 from its current price of around $1,550.
The ARK Web x.0 ETF ( ARKW) is one of the first U.S. ETFs to have indirect exposure to bitcoin, which it gets by having GBTC as its top-weighted member at 7 percent. The ARK fund also holds Square Inc., which is letting some users buy bitcoin via its Square Cash app, and crypto-exposed semiconductor bellwethers like Nvidia Corp. The fund’s up almost 82 percent this year, mostly because of GBTC, which accounts for almost 22 percent of the gain, according to an analysis of Bloomberg data.
Semiconductor exchange-traded funds are also potential derivative plays on cryptocurrencies. With companies like Advanced Micro Devices Inc. and Nvidia being used to mine ether, the second most valuable digital token, funds that hold the stocks may be offering indirect crypto exposure. Both the iShares PHLX Semiconductor ETF ( SOXX) and the VanEck Vectors Semiconductor ETF ( SMH) hold them. In fact, Nvidia’s gains this year are responsible for 7.4 percent of SOXX’s returns.
There are also plenty of crypto-related companies that have seen their stocks skyrocket over the past few months. Overstock.com Inc. ( OSTK) has nearly matched bitcoin’s return after announcing the launch of a regulated crypto exchange. Riot Blockchain Inc. ( RIOT), a former maker of diagnostic machinery for the biotech industry, now invests in crypto-related businesses, leading its stock to more than double in the past two weeks. Digital Power Corp. ( DPW), which is involved with cryptocurrency mining, and Marathon Patent ( MARA), which recently said it would issue shares to fund a blockchain deal, each surged more than 40 percent today.
--With assistance from Lily Katz.To contact the reporters on this story: Carolina Wilson in New York City at [email protected] ;Tom Lagerman in Princeton at [email protected] To contact the editors responsible for this story: Arie Shapira at [email protected] Eric J. Weiner