As Bitcoin (CRYPTO: BTC) stubbornly refused to break above $30,000 this summer, some traders undoubtedly lost interest in cryptocurrency and moved on. However, in the final days of August, investors' attention turned back to digital assets in the wake of an U.S. Appeals Court's potentially historic ruling.
Not everyone has easy access to Bitcoin, especially if they're trading within a retirement account. It's still possible to ride the ups and downs of Bitcoin's price moves in an all-stock account, though. The stock price of Riot Platforms (NASDAQ: RIOT) moves in close correlation to Bitcoin -- and while the company isn't perfect by any means, it's a relentlessly busy crypto miner that appears to be on a path to profitability.
Don't play the waiting game
Naturally, some traders would prefer to wait for a fully approved spot Bitcoin exchange-traded fund (ETF) to debut rather than invest indirectly in Bitcoin through a mining stock. Everyone's entitled to their preferences, but don't count on such an ETF being available anytime soon.
Grayscale Investments already has the Grayscale Bitcoin Trust (OTC: GBTC), but that's based on Bitcoin futures, so it's not a spot Bitcoin ETF and there's no guarantee that entity will faithfully track Bitcoin's price movements. However, Grayscale Investments celebrated a landmark event when a federal appeals court overturned the Securities and Exchange Commission's (SEC) rejection of the company's application to create a spot Bitcoin ETF.
Don't draw the wrong conclusion from this, though. The appeals court determined that the SEC shouldn't reject Grayscale's ETF application outright, and must at least review it. The SEC can still reject the ETF itself after reviewing the application. Moreover, SEC Chairman Gary Gensler probably isn't eager to approve the ETF after previously rejecting the mere application for it.
Meanwhile, ARK Invest Chief Executive Officer Cathy Wood reportedly wants to get an Ethereum ETF approved. Again, as long as Gensler is the gatekeeper, any spot cryptocurrency ETF approvals should be considered long-term objectives. The wheels of change tend to turn slowly in the public sector, so I would think in terms of 2024 at the earliest.
Try an imperfect Bitcoin mining play
If owning Bitcoin directly is impractical or inconvenient for you, it's not necessary to wait around for a spot Bitcoin ETF to invest in. Much as the shares of high-quality gold miners tend to follow gold prices, Riot Platforms' stock often closely tracks the trajectory of Bitcoin's price (though it's certainly not a perfect correlation).
Furthermore, Riot stock has plenty of daily share-trading volume, and the miner is known for relentlessly producing Bitcoin. It produced 333 BTC in August (down 11% year over year) even though "Texas experienced another month of extreme heat, causing demand for electricity to spike, in some cases approaching total available supply," according to Riot Platforms. Indeed, Riot Platforms brought in a good deal more money last month from selling power back to the grid than it did from mining Bitcoin.
In the second quarter, Riot Platforms produced 1,775 Bitcoin, versus 1,395 in the year-earlier quarter. Also during that time frame, the company's revenue grew moderately. Best of all, Riot Platforms narrowed its net loss from $353.6 million ($2.71 per share) to a more palatable $27.7 million ($0.17 per share).
Thus, investors seeking to participate indirectly in the crypto-sphere can enjoy immediate access, if not perfection, with Riot Platforms stock. Granted, there's no assurance that the miner will turn a profit in the future -- but then, no one can promise that the SEC will approve a spot Bitcoin ETF this year, next year, or before Bitcoin breaks through $30,000 again.
