Investors are pouring into cryptocurrencies at a record pace, as the price of Bitcoin has soared from $10,500 on Dec. 1 to its record high, over $17,000, yesterday (Thursday). On Thursday alone, the Bitcoin price spiked more than 21%.
While Bitcoin has been the fastest way to grow your wealth in 2017, investing in Bitcoin is not for everyone. It remains extremely speculative and only for those investors willing to accept significant risk.
But for retail investors, we've found two of the best "Bitcoin stocks" to buy today that offer huge upside, with just a fraction of the risk.
Money Morning Chief Investment Strategist Keith Fitz-Gerald says there are several great ways to play Bitcoin in your existing brokerage account.
This strategy is based on the California Gold Rush of 1849. People flocked to the area to seek their fortune, but few actually became rich. However, the people selling the newbie miners their picks and shovels made the real money.
The same holds true for any speculative market. Find the companies making and selling the tools - the merchants - and you can ride the wave without risking drowning in it.
Fitz-Gerald's thesis is that the economic foundation driving any "gold rush" is where you want to place your money when it comes to truly legendary and sustainable wealth.
For that, he recommends two great "Bitcoin stocks" to buy...
Bitcoin Stocks to Buy, No. 1: CME Group Inc.
CME Group Inc. (Nasdaq: CME) is one of the world's leading derivatives and futures exchange operators. Known as "The Merc," it is now the largest futures exchange in the world, following the merger between the Chicago Mercantile Exchange and the Chicago Board of Trade in 2006. It handles trading in stock indexes, Treasury bonds, energy, precious metals, agricultural products, and regular currencies, such as the euro.
The value of all trading exceeds $1 quadrillion a year. And it's 50 times greater than the current national debt. Clearly, this company can handle big money transactions.
Learn How to Turn $500 into $1 Million: This Sunday school teacher's "retirement career" made him a millionaire. This book will teach you how you can do it too. Claim your FREE copy...
"CME will begin offering Bitcoin futures contracts starting in mid-December based on the CME CF Bitcoin Reference Rate (BRR)," Fitz-Gerald said. "That's significant, because the BRR aggregates information in U.S. dollars per bitcoin, as drawn from the world's major Bitcoin spot exchanges."
By making Bitcoin instantly accessible to a much wider range of traders, the hope is that Bitcoin prices continue to rally and draw in even more investors to participate.
But whether prices soar, stay where they are, or fall, it does not matter. CME makes money as long as people trade.
And the next "Bitcoin stock" on our list has been one of Keith's top picks for years...
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
Bitcoin Stocks to Buy No. 2: Nvidia Corp.
The next stock is NVIDIA Corp. (Nasdaq: NVDA). It's actually been one of Fitz-Gerald's favorites for a long time, because the company manufactures high-powered graphics processing units - or GPUs for short. These are usually combined with central processing units (CPUs) as a means of accelerating critical computing applications, boosting deep learning, and powering analytics.
Its chips are in high demand with high-end gamers and visual artists who demand top-notch graphics. It also delivers a superior visual and multimedia experience on tablets and smart devices while consuming minimal power.
That is key for Bitcoin, as its computers and networks consume huge amounts of electricity.
Top 5 Cryptocurrencies to Invest in Today
"Motherboard estimates that the daily worldwide power demand associated with Bitcoin mining would power roughly 821,921 average American homes - and that's the minimum power demand with no leakage," Fitz-Gerald said. "That makes Bitcoin approximately 5,000 times more energy intensive than a single credit card transaction."
According to Digiconomist, the estimated power use of the Bitcoin network, which is responsible for verifying transactions made with the cryptocurrency, is 30.14 TWh a year. That exceeds the annual consumption of Ireland and 19 other European countries. The network consumes five times more electricity than is produced by the largest wind farm in Europe.
And as Bitcoin becomes more popular - and the need to defend it from crashes and hacking grows - this problem will only get worse.
But it doesn't matter whether the price of Bitcoin triples or collapses. As long as NVIDIA's chips get used, the company makes money.
The moral of the story is to be a merchant, not a miner. Make hay while the sun shines, and also when it doesn't.
Free Book for Money Morning Readers - Claim Yours Here
With the secrets you'll find in this book, we've produced 89 chances to double, triple, and even quadruple your money in the past two-and-a-half years - 42 chances this year alone!
Fun fact: You only have to double $500 11 times to turn it into $1 million.
Click here to learn how you can claim your free copy today.