A Perfect Way to Play the Next Crypto Rally?

After a swift drop earlier in the year after hitting all-time highs, cryptocurrencies have surged higher in prior weeks. The space is pausing again, but may be on track to resume its rally soon.

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  • While many companies have embraced cryptocurrencies, the trend is still early. But investors who want exposure to the space without having to buy and store their own have a few solid opportunities.

    For those just looking for exposure to Bitcoin, MicroStrategy (MSTR) may be the way to go. The company now owns about $4.5 billion in Bitcoin, and has used convertible debt to make those buys, including an additional buy in the past week. That’s far in excess of the company’s value prior to its Bitcoin buys, which it started just over a year ago.

    Action to take: The company’s massive, leveraged buy on Bitcoin is a way to get exposure to Bitcoin without having to pay the fees of a trust, and there are now Bitcoin or crypto ETFs at present. Investors can also buy shares in a retirement account, something they can’t do with a direct cryptocurrency play.

    In addition to buying shares to play a potential move in Bitcoin higher, traders could buy call options on MicroStrategy instead. The January $1,000 calls, last going for about $70, offer a leveraged move higher if Bitcoin prices move higher.

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    Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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