MicroStrategy (MSTR) has gained 355% in the past year and is up over 2,178% since the company started to invest heavily in Bitcoin (BTCUSD). After turning its fortunes around, MicroStrategy is now essentially a leveraged bet on the leading cryptocurrency. Of course, bears argue that this isn’t a healthy strategy, as MicroStrategy is piling all its eggs into one basket. That said, the company’s average purchase price of $62,473 per BTC is well below the current price, so bulls are confident that it is a healthy long-term play.
Only time will tell if this will be sustainable for MicroStrategy. And if we see a broader market correction this year, both MSTR and the penny stocks trying to follow in its footsteps it could get crushed. But if you are a believer that Bitcoin will continue to gain exponentially over the coming years and decades, there’s a good chance that other companies replicating MicroStrategy’s Bitcoin-buying strategy could also replicate its gains. Let’s look into two such penny stocks.
Penny Stock #1: OneMedNet
OneMedNet (ONMD) is a medical data analytics firm that went public via a SPAC merger in late 2023, only to see its stock plummet by over 90%. However, it raised $4.6 million in a July 2024 private placement and allocated $1.8 million of that to Bitcoin. In November, the company reported that it held 34 BTC, worth over $3 billion at current prices.
Off The Chain Capital participated in multiple funding rounds for OneMedNet, and its CIO thinks Bitcoin will become the world’s “monetary layer.” Off The Chain invests in companies that are investing in BTC. That way, if Bitcoin rises, Off The Chain can profit from the outsized translation of those gains in ONMD stock.
With a market capitalization of just $26 million, ONMD lacks a cushion in case of a downturn in Bitcoin and is a pretty unique play. As its exposure to BTC is much smaller than that of MicroStrategy, it will not benefit as much from price upswings. However, if you are a big BTC bull, ONMD stock might be worth looking into further.
Analysts have a mean price target of $2.75, which implies nearly 200% upside.
Penny Stock #2: KULR Technology Group
KULR Technology Group (KULR) is mostly known for thermal management and energy products. But much like OneMedNet, it has decided to instead bet big on Bitcoin. KULR’s board decided to approve Bitcoin as its primary treasury asset by committing 90% of its surplus cash to BTC purchases. Its first purchase was in late December when it bought 217.18 BTC at $96,556 per BTC. So far, its holdings now amount to 610.3 BTC, worth about $60 million.
The primary business is still very unprofitable, and analysts don’t see a green bottom line anytime soon. Analysts are calling for a loss per share of $0.02, which would mark a 50% improvement from the prior-year period.
I’d treat KULR as an “MSTR lite” play. As its outstanding shares have nearly doubled since 2023 and the company bought BTC at relatively high prices, shareholders will be fighting an uphill battle if they think they can get MSTR-level gains right now.
Analysts have a mean price target of $3.46, which implies almost 75% upside.
