First Bitcoin Capital Corp. (NASDAQOTH:BITCF)
This small Bitcoin stock surged in 2017 (as a lot of things did), and calls itself “the world’s most prolific generator of cryptocurrencies.”
The company develops new digital currencies and blockchain technologies, but can’t really justify its market cap of more than $250 million. There are nine projects currently listed on its website, but most of them sound like snakeoil.
Also, First Bitcoin has changed its name, focus, or country five times in just a dozen years… RED FLAG.
Riot Blockchain (NASDAQ:RIOT)
Here’s another failing company that shifted its focus to try to ride the cryptocurrency wave. Until October 2017, Riot was known as Bioptix, and before November 2016, it was Venaxis. Then, less than four months ago, the biotech company changed its name and shifted its focus to blockchain-based investments.
Riot Blockchain initially announced an investment in Canadian cryptocurrency exchange Coinsquare, and has also made a few other investments since then, particularly in bitcoin miners. However, the company’s assets don’t come close to justifying its share price.
Another red flag when it comes to Riot Blockchain is that the company’s CEO recently unloaded more than 30,000 shares of the stock at an average sales price of $28.61, roughly double the current share price. Troubling…
Bitcoin Investment Trust (NASDAQOTH:GBTC)
The Greyscale Bitcoin Investment Trust essentially functions as an exchange-traded fund, or ETF, that allows investors to pool their money to buy bitcoin. This seems no worse than simply buying bitcoins yourself on an exchange, right? Wrong.
The problem is the premium you pay. Yes, buying bitcoins on an exchange can be complicated and can also come with high transaction fees, but it’s not worth the premium you pay. As of Jan. 29, 2018, each share of the trust represented 0.00100733 bitcoins. Based on the $10,400 market value of bitcoin as of this writing, this means that each share’s intrinsic value is $10.48. Shares of the trust are trading for $18.25 — a massive 74% premium over the value of the bitcoin owned. In addition, the annual management fee of 2% is several times more than you’d pay on a similar gold, silver, or commodity-based ETF.
The bottom line: If you want to own bitcoin, you’re better off simply buying bitcoin.