After four years of waiting, the long-anticipated Bitcoin (BTC 5.46%) halving finally took place on April 19. It promises to be yet another watershed moment in the history of Bitcoin. That's because every new halving cycle typically brings another bull market rally for Bitcoin, as well as another all-time high.
But it's not just Bitcoin that could be a big winner of the Bitcoin halving. Three other big winners include Coinbase Global (COIN 4.50%), MicroStrategy (MSTR 7.31%), and BlackRock (BLK 1.55%). Let's take a closer look.
Coinbase Global
The obvious winner, of course, is Coinbase. First and foremost, the start of a new bull market rally for Bitcoin could lead to retail investors returning to the company's cryptocurrency trading platform, thereby pumping up Coinbase's transaction-related revenue. And, since a rising price for Bitcoin is traditionally good for the broader crypto market as well, there is likely to be increased trading in many, if not all, of the more than 245 cryptos currently listed on the exchange.
And don't forget about the effect of the halving cycle on investor appetite for the new spot Bitcoin ETFs. Obviously, investors aren't going to Coinbase to trade these new ETFs. But here's the thing -- Coinbase is a custodian for eight of the 11 new spot Bitcoin ETFs. Thus, indirectly, Coinbase will benefit from investors deciding to buy these new spot Bitcoin ETFs. The more money that flows into the spot Bitcoin ETFs, the more money Coinbase could make from custodial fees.
MicroStrategy
While MicroStrategy is ostensibly an enterprise software company, it's best known as the largest corporate holder of Bitcoin in the world. The company has been on a Bitcoin buying spree since mid-2020, and currently holds more than 214,000 bitcoins on its balance sheet. That's more than 1% of all Bitcoin in circulation. At today's Bitcoin price of $66,000, those holdings are worth a cool $14 billion, or about 60% of the total value of MicroStrategy itself!
MicroStrategy shows no signs of slowing its Bitcoin acquisition strategy. The company's founder and executive chairman, Michael Saylor, is known as one of the biggest Bitcoin bulls in the world, and he has been very transparent about his desire to own as much Bitcoin as possible. In fact, his company recently had two new debt offerings, both with the express purpose of -- you guessed it -- buying more Bitcoin. If you are looking for a Bitcoin proxy stock, then look no further than MicroStrategy.
BlackRock
Finally, there's BlackRock, the largest asset manager in the world, with over $10 trillion in assets under management. The company is the issuer of the iShares Bitcoin Trust (IBIT 5.36%), the most popular of the new spot Bitcoin ETFs that launched in January. In the span of just over three months, the ETF has gone from $0 to $17 billion in assets under management. And you can expect that figure to grow even higher as the price of Bitcoin increases.
Image source: Getty Images.
Granted, $17 billion is a drop in the bucket compared to the $10 trillion in assets that the company manages. But the bigger picture is that top ETF issuers such as BlackRock are using their flagship Bitcoin products as a way to attract new investors. Once you've purchased the iShares Bitcoin Trust, for example, you're much more likely to buy one of the company's other ETFs.
BlackRock has also said that its new Bitcoin ETF is just the first step to new product innovations in areas such as asset tokenization, which has been projected as a $16 trillion market opportunity by the Boston Consulting Group. So I'm viewing BlackRock as a very long-term play on the mainstream adoption of Bitcoin and other crypto-related assets.
What's the best way to play the Bitcoin halving?
Three different companies, three different ways to play the Bitcoin halving. If you are looking for a company that's directly leveraged to the price of Bitcoin, the clear choice is MicroStrategy. In many ways, MicroStrategy is a Bitcoin ETF masquerading as a software company. If you are looking for a more diversified play on the price of Bitcoin, though, Coinbase is a better choice.
Of course, you could always just buy Bitcoin. If the 2024 halving is anything like the previous three Bitcoin halvings, it's going to be hard to find any investment that has the potential to soar higher over the next 12 months.
