Here’s How Billionaire Jeff Yass Is Investing In Crypto (Hint: It’s Not Bitcoin)

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Cryptocurrency is an emerging asset class that’s been rising in popularity during the past several years. I see a couple of valid reasons to consider investing in crypto.

First, I think some investors are intrigued by the idea of digital currencies replacing fiat money in the future — hence, buying crypto becomes an appealing decision. Second, I think crypto represents an alternative investment akin to art or collectibles. Allocating a small percentage of your portfolio to assets besides stocks, bonds, and cash can make sense for the right investor.

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But choosing which cryptocurrency to buy can be like throwing a dart at a wall. While Bitcoin and Ethereum are two of the most mainstream options, could Dogecoin or Shiba Inu actually create some real-world utility down the road?

Rather than trying to predict which digital currencies will be the most valuable, I’d encourage investors to think about ways to gain exposure to cryptocurrency without actually buying specific tokens or coins.

Below, I’ll explore how billionaire investor Jeff Yass of hedge fund Susquehanna International Group (SIG) is investing in crypto.

According to SIG’s latest 13F filing, it has been steadily building a position in Coinbase Global (NASDAQ: COIN). During the past year, the fund has increased its stake in Coinbase 17-fold, from roughly 51,330 shares to 877,400.

At its core, Coinbase is an exchange where investors buy and sell cryptocurrency. In some ways, it’s similar to brokerage firms like Robinhood or Charles Schwab, but with an intense focus on crypto. In the same vein as a traditional brokerage house, Coinbase generates most of its revenue from transaction fees.

While buying and selling trends in the crypto world can ebb and flow like equities do, I like the idea of investing in Coinbase for a couple of reasons.

Although crypto is still somewhat of a niche industry, I think Coinbase’s brand is a valuable intangible that is hard to compete against from the perspective of legacy incumbent brokers.

Moreover, investing in Coinbase provides exposure to the crypto industry in a broad way. Instead of speculating over which individual cryptocurrencies will rise in value, Coinbase presents a diversified platform inclusive of many different digital currencies.

To me, this is a subtle benefit because Coinbase stock will likely not experience the same level of volatility that a specific cryptocurrency could on any given day. Furthermore, since Coinbase makes money from transaction fees, the company stands to benefit when cryptos are experiencing heavy buying or selling activity.

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