Why Investing in Bitcoin Companies May Offer Larger Gains Than BTC Itself

Bitcoin remains a risky investment, and this volatility can be stressful for investors looking to make money on their holdings. When the value of BTC drops significantly, should you sell and cut your losses? Or hold on and wait for the next bull run? While there’s no surefire way to predict Bitcoin price movements, there’s a way to potentially reduce this risk and make strategic, informed decisions about your Bitcoin investments. Investing in Bitcoin companies can provide higher returns and lower risk than holding BTC alone, enabling more innovative, more strategic Bitcoin market exposure. This article will explore why you should consider these stocks and how to begin to increase Bitcoin annual returns.

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Why Investing in Bitcoin Companies May Offer Larger Gains Than BTC Itself

bitcoin on golden card - Investing in Bitcoin Companies

Investors in the Bitcoin space are constantly exploring new strategies to maximize returns, particularly when diversifying between digital assets and related companies. A recent discussion focused on the potential benefits of investing in Bitcoin miners and companies involved in the broader space rather than directly holding Bitcoin.

Insights from the Experts

Roundtable anchor Rob Nelson led the conversation with George Tung and Gav Blaxberg, CEO of WOLF Financial; and Rob Chang, CEO of Gryphon Digital Mining. They shared insights on navigating the volatile Bitcoin market and the advantages of looking beyond Bitcoin itself.

Investing in Bitcoin-Adjacent Companies

George Tung emphasized the appeal of companies like MicroStrategy, noting, "Since 2020, shockingly, MicroStrategy has outperformed even Bitcoin's performance." He explained that diversifying into such companies could be a compelling strategy if they continue to outperform the digital asset.

Rob Nelson highlighted Coinbase as another option investors often consider: "You’re going outside the coins and buying into the infrastructure, which fundamentally... makes sense. If you're just looking to diversify, you're taking a risk no matter what you do."

Coinbase is up 7% this year to Bitcoin's 43% gain. MicroStrategy, led by CEO Michael Saylor, continues to leverage the company's balance sheet to bet on Bitcoin, up 114% this year.

Gav Blaxberg pointed out that many investors prefer options like Coinbase or mining companies due to compliance restrictions, adding, "Some of these miners are super volatile... people use them as short-term trading vehicles for a little bit more bang for their buck."

Mining Stock Volatility and Potential Gains

Rob Chang confirmed the higher volatility of mining stocks compared to bitcoin, explaining, "By design, there should be more torque in what we're doing... we are generating bitcoin itself." This volatility, he noted, often leads to mining companies outperforming bitcoin during specific periods.

10 Biggest Publicly Traded Bitcoin Companies to Invest In

globally invested companies - Investing in Bitcoin Companies

1. MicroStrategy: The Treasury Company That Holds Bitcoin

MicroStrategy, a prominent business analytics platform turned Bitcoin treasury company, has adopted BTC as its primary reserve asset. The firm, which produces mobile software and provides cloud-based services, has aggressively pursued a Bitcoin buying spree, scooping up millions of dollars worth of BTC.

As of this writing in January 2025, it holds 461,000 BTC in reserve, equivalent to over $48 billion worth and more than 2% of the total number of Bitcoin that will ever be issued. At one point, MicroStrategy Executive Chairman Michael Saylor said he bought $1,000 in Bitcoin every second.

Bitcoin as a Business Strategy

In the Q1 2024 earnings call, Saylor claimed that the company’s adoption of a “Bitcoin strategy” had enabled it to deliver 10x to 30x the performance of rival enterprise software companies in the business intelligence sector. Unlike other executives who typically shy away from discussing their investments, Saylor has made it public that he purchased 17,732 BTC—currently worth over $1.85 billion and still holds them as of September 2024.

From Bitcoin Skeptic to Believer

It’s an about-face for the MicroStrategy co-founder, who 2013 claimed that Bitcoin’s days were numbered. “We’re at the beginning of the stage of rapid institutional adoption of digital property in the form of Bitcoin,” Saylor said during the Q1 2024 earnings call. He added that in the future, Bitcoin won’t compete against other digital assets, but against, “gold, art, equities, real estate, bonds, and other types of store-of-value money in wealth creation, wealth preservation, and the capital markets.”

MicroStrategy plans to buy even more Bitcoin shortly, as it’s raising a planned $42 billion to do just that, and Saylor is making the pitch to other public companies as well—like Microsoft. However, shareholders ultimately voted against the proposal.

2. Marathon Digital Holdings Inc.: A Leader in Bitcoin Mining

Unsurprisingly, bitcoin mining company Marathon Digital is also a large holder of Bitcoin, with 44,394 BTC in its corporate treasury, according to its most recent update in December 2024. That’s worth more than $4.6 billion at today’s prices.

The company, which aims to build "the largest Bitcoin mining operation in North America at one of the lowest energy costs," originated as a patent holding firm (and was often referred to as a patent troll) before its pivot into Bitcoin mining.

Doubling Down on Mining Power

As of July 2024, Marathon Digital runs over 250,000 Bitcoin miners capable of producing 31.5 EH/s, with an average operational hash rate of 26.3 EH/s. The firm noted that it is accelerating its growth plans following the 2024 Bitcoin halving to “mitigate the impact” of receiving half the BTC rewards per each successfully mined block.

The firm had said that it aimed to double the scale of its mining operations in 2024. The company increased its revenue by 35% to $132 million in Q3 2024, up from $98 million in Q2. It recently raised nearly $2 billion via convertible notes, most of which has been used to buy Bitcoin.

3. Riot Platforms, Inc.: Expanding Their Bitcoin Mining Business

Another Bitcoin mining outfit, U.S.-based Riot Platforms, holds 17,722 BTC—worth about $1.85 billion at today’s prices. With its valuation surging from below $200 million in 2020 to highs of over $6 billion in 2021, the Nasdaq-listed company went on an aggressive expansion drive. In April 2021, it spent $650 million on a one-gigawatt Bitcoin mining facility in Texas, eventually expanding further in 2022 before rebranding to Riot Platforms to diversify its business model in 2023.

RIOT's Stock Volatility and Market Swings

In 2024, it warned shareholders that there was “no guarantee” the Bitcoin halving would improve profitability. While RIOT shares traded briefly around $18 early in the year, the stock fell gradually before ranging below $10 from August until late October. After such, it gained alongside a resurgence for Bitcoin mining stocks and the broader market after Donald Trump was named President-elect in November.

The company also settled with Bitcoin mining firm, Bitfarms, as it attempted a hostile takeover of the rival in 2024.

4. Galaxy Digital Holdings: A Merchant Bank for the Bitcoin Economy

Bitcoin-focused merchant bank Galaxy Digital Holdings holds an estimated 11,242 BTC according to data from a November 2024 investor release, based on having $711 million worth of Bitcoin as of September 30, 2024. At the current price, as of this writing, that amount of Bitcoin is worth about $1.18 billion.

From $50K Floor to $100K Target for Bitcoin

Founded by Michael Novogratz in January 2018, the company provides asset management and digital infrastructure services to institutions looking to gain access to digital assets like Bitcoin and Ethereum. Novogratz is, unsurprisingly, a keen advocate for Bitcoin, arguing in March 2024 that Bitcoin would never dip below $50,000 again and months later predicting that it would soar to $100,000 by the end of the year.

Galaxy Digital is one of several firms managing a U.S. spot Bitcoin ETF following their landmark approval by the SEC in January 2024. Recently, Novogratz indicated that Trump's winning the presidential election was “the most important day for Bitcoin.”

5. Hut 8 Corp: A Bitcoin Mining Firm with Revenue Plans

Canadian Bitcoin mining firm Hut 8 Corp. holds 10,096 BTC, worth more than $1 billion at current prices, according to its most recent update from December 2024. In June 2021, the company was listed on the Nasdaq Global Select Market under the HUT ticker, with the company's SEC filing noting that it's "committed to growing shareholder value by increasing the number and value of our Bitcoin holdings."

Bitcoin Yield and Strategic Merger

The company also explained that it generates fiat income by leveraging its self-mined and held Bitcoin reserve "via yield account arrangements with leading digital asset prime brokerages." In November 2023, the firm merged with fellow mining company US Bitcoin, with the post-merger firm billing itself as an “energy infrastructure company targeting Bitcoin mining and data centers.”

Mining Expansion and AI Investment

Those mining centers are based at six sites across Alberta, Texas, and New York, with a reported 7.5 EH/s of installed self-mining capacity. The company announced a $150 million investment last June to expand its AI compute demands, and its stock nearly doubled in the weeks following the Presidential election, bringing its market cap to more than $2 billion as of this writing.

6. Tesla: An Electric Vehicle Company That Holds Bitcoin

Electric vehicle manufacturer Tesla joined the companies holding Bitcoin in December 2020, with an SEC filing revealing that the company invested "an aggregate $1.5 billion" in Bitcoin. Tesla sold 10% of its Bitcoin holdings in Q1 2021; CEO Elon Musk said this was "to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet."

Tesla's Bitcoin Journey

The company's Bitcoin play followed months of speculation after CEO Elon Musk took to Twitter (aka X) to discuss Bitcoin. In late 2020, MicroStrategy's Saylor offered to share his "playbook" for Bitcoin investing with Musk, arguing that a move into Bitcoin would give Tesla shareholders a "$100 billion favor." Nevertheless, Musk and Tesla have had an on-and-off relationship with Bitcoin.

After announcing that Tesla would accept payments in Bitcoin for its products and services in March 2021, just two months later, the CEO abruptly announced that the company would no longer take the BTC for payments.

Citing the "rapidly increasing use of fossil fuels for Bitcoin mining and transactions," Musk revealed that the company wouldn't sell any of its Bitcoin holdings and would consider using it for transactions again once mining "transitions to more sustainable energy."

Tesla's Bitcoin U-Turn

Musk later clarified that the company would resume using Bitcoin for transactions once miners use 50% clean energy. In July 2022, the company revealed that it had sold "approximately 75%" of its Bitcoin in its Q2 2022 quarterly update, with its balance sheet showing sales from digital assets amounting to $936 million.

Tesla's Bitcoin Holdings

In a call with analysts, Musk stated that the firm did so to shore up its cash position amid uncertainty around COVID lockdowns. As of January 2025, the company holds 9,720 BTC in its portfolio—worth just over $1 billion at current prices—per bitcointreasuries.org. Whether Tesla will add to its balance sheet remains to be seen, but Musk has said that “he’s open to increasing its Bitcoin holdings in the future.”

Musk is best known as a keen advocate of Dogecoin. Tesla has enabled Dogecoin purchases for some merchandise, plus Musk is now leading the Department of Government Efficiency (DOGE), spawning new meme coins and a swift movement upward for Dogecoin.

7. Coinbase Global, Inc.: The Most Well-Known Bitcoin Exchange

Arguably the best-known Bitcoin firm in this list, BTC exchange Coinbase went public in a landmark direct listing on the Nasdaq in April 2021. Ahead of its listing in February 2021, Coinbase revealed that it held $230 million in Bitcoin on its balance sheet. As of its September 2024 10-Q filing, it has 9,363 BTC in its treasury, worth around $980 million.

The company’s stock has charged back towards its all-time high in the wake of the 2024 Presidential election. It continues to innovate with Bitcoin, recently announcing its own wrapped Bitcoin product, cbBTC. Coinbase also recently restarted Bitcoin lending services.

8. CleanSpark: A Bitcoin Mining Firm That Is Expanding Operations

U.S. Bitcoin mining firm CleanSpark holds 9,297 BTC, worth around $975 million at today’s prices. Ahead of the 2024 Bitcoin halving, the firm expanded its operations, snapping up three Bitcoin mining facilities in Mississippi for $19.8 million and adding up to 2.4 EH/s to its mining capacity.

CleanSpark's Mining Expansion

The company also added a third facility in Dalton, Georgia, to its lineup, with a further 0.8 EH/s. In June 2024, CleanSpark revealed that it had mined 417 BTC in May, claiming to have “outperformed industry expectations” in its first month of production following the halving. The company added that it plans to further expand to a site in Wyoming “in the coming days.”

Like that of its peers, the company's stock nearly doubled in the weeks following the election, valuing the company at more than $3 billion at the time of writing.

9. Block, Inc.: A Company That Has Invested in Bitcoin

Alongside Tesla, Square parent company Block lit the fuse for institutional investment in Bitcoin with its October 2020 investment of $50 million. As of the end of September 2024, the firm holds 8,363 Bitcoin, worth about $876 million. The investment is perhaps unsurprising, considering that CEO Jack Dorsey is an enthusiastic advocate for Bitcoin—even running his own Bitcoin node and describing the coin’s whitepaper as “poetry.”

Block's Bitcoin Commitment

At the time of its initial investment, the company described it as "part of Square’s ongoing commitment to Bitcoin," noting that "the company plans to assess its aggregate investment in Bitcoin relative to its other investments on an ongoing basis." The firm has invested in Bitcoin technology, launching its own Bitcoin wallet and developing a Bitcoin mining ASIC chip.

Bitcoin Integration and Reinvestment

In April 2024, its payment services subsidiary Square announced that it would enable businesses to use its Cash App product to convert a portion of daily sales into Bitcoin automatically. In May 2024, the firm announced it would reinvest 10% of its profits from Bitcoin-related products and services into BTC, in a dollar cost average or DCA purchase program.

10. Bitcoin Group SE: A German Firm with Significant Bitcoin Holdings

Germany-based venture capital firm Bitcoin Group SE brings up the rear of the list, with approximate Bitcoin holdings of 3,678 based on a recent financial update, worth $385 million. Its investments include BTC exchange Bitcoin.

German Banks Embrace Bitcoin

The move followed the German parliament's decision to enable banks to sell and store BTC. Bitcoin Group SE managing director Marco Bodewein highlighted the opportunity to introduce the bank's institutional investors to Bitcoin's "high returns and safety features." Germany sold the majority of its confiscated Bitcoin holdings throughout the summer.

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Why Investing in Bitcoin Companies May Offer Larger Gains Than BTC Itself

Feb. 3, 2025