Bitcoin vs. BTC companies: what is the best buy?

Bitcoin (BTC) has treated its followers well in 2023, having appreciated over 80% since the start of the year. However, there may be better ways for investors to capitalize on the success of the asset besides stacking the actual sats.

Here’s a look at how some Bitcoin-related assets and companies are performing alongside BTC, from financial companies to mining stocks.

Mining stocks are booming

Shares of several publicly traded Bitcoin miners surged on Friday, including CleanSpark (CLSK; 11.32%), Riot Platforms (RIOT; 14.33%) and Hut 8 (HUT; 6.14%). Bitcoin, on the other hand, was up just 1.42%.

This year alone, the three miners have seen their stock prices at least triple in value. Rival mining company Iris Energy, which rose 9.5% on Friday, is up 48% since January 1.

Miners’ balance sheets and earnings are directly tied to the price of Bitcoin, as these companies receive a fixed number of Bitcoin every ten minutes in the form of newly minted coins from the network.

Many of these miners have made major investments in infrastructure this year in preparation for the “halving” – an event that halves Bitcoin network emissions and is widely seen as catalyzing Bitcoin bull markets.

While the industry’s upside looks promising, it may also encounter even greater downside volatility than BTC. Core Scientific (CORZQ), for example, saw its share price plummet more than 80% in a single day in October after developer he was unable to repay his debt.

Exchanges and ETFs

Coinbase (COIN) is another publicly traded company to overtake Bitcoin this year, up 134% year-to-date. Although the U.S. Securities and Exchange Commission (SEC) sued the exchange last month, Bitcoin’s positive price action, Coinbase’s optimism First Quarter Revenue Figuresand a partnership with BlackRock for a planned Bitcoin spot ETF all spell good fortune for the company.

BlackRock’s filing has markets more optimistic that a cash ETF could finally overtake the SEC, paving the way for other companies to follow suit.

That makes Grayscale Bitcoin Trust (GBTC) another attractive buy: Shares in the fund traded at a discount well below the value of its underlying Bitcoin for years. However, if its efforts to convert to a spot ETF prove successful, this discount will be immediately restored to parity, creating added value for investors. The discount currently stands at 27%.

Until a Bitcoin spot ETF is approved, MicroStrategy (MSTR) is one of the best alternatives available, up 162% year-to-date. The software company – whose balance sheet includes more than 150,000 BTC – frequently issues stocks to buy more Bitcoin, much like an ETF.