With Bitcoin prices surging to an all-time high of $11,517.40 on Nov. 29, some companies are trying to turn themselves into a "Bitcoin stock" to cash in on the craze. Don't be fooled by these risky companies; there are better ways to profit from Bitcoin without ever owning it...
You see, with Bitcoin up 900% on the year, investors are wanting in on the action.
But most of these companies are speculative investments that are just trying to entice investors to part ways with their hard-earned money.
Instead, we found an opportunity that lets you avoid the speculative risk of buying companies trying to pass themselves off as "Bitcoin stocks" and still bank a potential 65% profit in the next 12 months...
Thanks to Bitcoin prices surging nearly 900% in 2017, some companies are trying to cash in on crypto craze.
For example, Grand Pacaraima Gold Corp. was a gold mining company that decided to change its name to First Bitcoin Capital Corp. (OTCMKTS: BITCF) in 2014.
It now owns a cryptocurrency exchange, a cryptocurrency news site, and manages cryptocurrency mining pools.
But a company changing names - and completely changing industries - is a red flag for investors...
This can be a tactic for penny stock manipulation, as companies will try to bring in money even when their business may soon close or is in financial trouble.
Despite the warning signs, the BITCF stock price has climbed 5,300% in 2017, just because the company has Bitcoin in its name.
We don't want Money Morning readers to follow everyone else into risky situations like this.
Instead, through our "backdoor" Bitcoin stock investment strategy, you can own shares of a company that's been in business since 1997.
This company is also run by a forward-thinking CEO who first started accepting Bitcoin payments back in 2014.
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And because his firm is now holding up to 50% of Bitcoin payments in Bitcoin, the company becomes more valuable each time the price of the crypto coin climbs higher.
Here's the "Bitcoin stock" investment that's already netted shareholders a 215% return in 2017 and could climb another 65% in the next 12 months...
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Overstock.com Inc. (Nasdaq: OSTK) is our backdoor Bitcoin investing strategy.
Yes, it may seem odd that Overstock.com is a way to invest in Bitcoin, but CEO Patrick Byrne was one of the first to accept Bitcoin payments...
While Overstock sells surplus and returned merchandise from other retailers, as well as new merchandise, Overstock started accepting Bitcoin as payment when it was just $754.97 per coin, in January 2014.
The online retailer has kept 10% of its Bitcoin earnings in Bitcoin and converted the rest into U.S. dollars, according to CoinDesk.com.
However, on an Aug. 3 earnings call, Byrne said the board of directors approved a plan to keep 50% of Bitcoin payments as Bitcoin.
That means Overstock is actually stashing away the bitcoins it collects as payment, so shareholders are getting a slice of Bitcoin's price growth.
Now, we don't know exactly how many bitcoins Overstock.com is holding right now.
But we do know roughly how much in Bitcoin people are spending...
Byrne didn't give a time frame, but he said in the conference call that Overstock was receiving $50,000 per week in Bitcoin payments.
And that's not the only way Overstock is giving you exposure to Bitcoin. Overstock also operates a blockchain-investment division, Medici Ventures.
Medici researches how to incorporate blockchain technology into banking, identification services, land ownership and sales, and voting. For example, its PeerNova holding is building blockchain-inspired technology that enables financial institutions to securely and verifiably manage their data.
As blockchain technology is used more and Bitcoin payments become more common, one analyst has a bullish price prediction for the Overstock.com stock price.
Investment firm DA Davidson predicted on Nov. 9 that the OSTK stock price will climb to $85 per share. From today's opening price of $51.40, that's a potential profit of 65.36%.
Of course, that doesn't come close to the nearly 900% gains Bitcoin investors have made since the coin opened for $963.66 on Jan. 1.
However, buying OSTK stock removes two of the biggest issues in owning Bitcoin directly...
The first issue is you have to store cryptocurrencies in a wallet to keep it safe, which can be a complicated process for new investors. Because keeping track of the private keys (the way to identify a coin) can be difficult, over 30% of all Bitcoins in existence are projected to be lost forever, according to a June 22, 2014, report from LetsTalkBitcoin.com.
The second issue is that you have to be comfortable with volatile price swings.
For example, Bitcoin prices opened at $7,404.52 on Nov. 5, but they fell to an intraday low of $5,519.01 on Nov. 12.
That's a 25% drop in a week.
But Overstock lets you profit from Bitcoin while also limiting your risk.
By holding up to 50% of Bitcoin payments, any Bitcoin price jump makes Overstock more valuable. On the flip side, Overstock's business won't collapse if Bitcoin prices take a dive.
The company sells goods and accepts Bitcoin payments rather than just mining Bitcoin as its core operation. On top of that, the company also accepts 40 different cryptocurrencies, like Ethereum.
If the price of Bitcoin goes down and another digital currency becomes more popular, like Litecoin or Ethereum, Overstock can hold those coins instead as a long-term investment.
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