THE Bitcoin (BTC -0.30%) cryptocurrency increased by 10.2% in October 2024, according to data from S&P Global Market Intelligence. As a result, stocks and funds heavily tied to the largest cryptocurrency have also soared, often much faster. For example, these names from the Bitcoin world saw big price increases last month. I include Bitcoin itself and a popular S&P500 (^GSPC -0.28%) index fund for your convenience:

Data collected from YCharts, FinViz and CoinMarketCap on 11/4/2024.

Bitcoin Rally in October (and Associated Price Rises)

Bitcoin itself saw two distinct growth spurts in October 2024. First, investors embrace the Chinese government’s latest economic stimulus planwhich could boost demand for Bitcoin and other cryptocurrencies. Towards the end of the month, many investors were in a speculative mood and drove up the prices of many high-risk investments — Bitcoin included. This speculative surge was inspired by recent interest rate cuts and the upcoming presidential election.

The iShares Bitcoin ETF has followed suit with Bitcoin’s price movements, as spot-price funds are designed to do.

Riot Platforms stock soared 46.5% in late October, but suffered a sharp price decline over the past two days. The stock tends to amplify whatever Bitcoin’s chart is doing. The positive developments are driven by the company’s active investment in mining more digital coins. Downturns impact Riot more deeply because these investments add risk to the business model. The price decline at the end of the month was driven by the company’s third-quarter earnings release, which fell short of analyst estimates overall. The spring halving of Bitcoin mining rewards reduced Riot’s profit margins and added financial pressure to its operations.

And then there is MicroStrategy. The enterprise data analytics software specialist became a very direct Bitcoin investment after converting most of its cash reserves into Bitcoin holdings and adding more Bitcoin through various funding channels. This stock rose 53.2% before falling on October 30. The company reported third-quarter results with disappointing sales and profits, but also significantly expanded its Bitcoin purchase program. MicroStrategy plans to raise $42 billion in capital over the next three years by raising debt and selling shares, investing the proceeds in more Bitcoin. The stock often rises when MicroStrategy executives outline new plans to buy Bitcoin, but this particular announcement was too bold to inspire market optimism.

Putting the October surge into perspective

Looking at the returns of these Bitcoin-based investments for the entire year – starting with the introduction of spot Bitcoin ETFs on January 10 – highlights the risky but promising nature of crypto investing. MicroStrategy is booming, Riot Platforms has plunged and the simplest Bitcoin assets are outperforming the stock market in 2024:

MSTR data by Y Charts

Crypto investors are still waiting for the positive Bitcoin price movements that tend to follow after every halving of its mining rewards. Institutional investors and other whales are nibbling new exchange traded funds (ETF), but the largest ETF today represents only 0.04% of the total Bitcoin market value.

So if you agree with the Bitcoin bulls and expect the digital currency change the world one dayIt is not too late to put in place investments to take advantage of the upcoming price surge. Otherwise, you can join leading investor Warren Buffett on the sidelines, watching the cryptocurrency drama without having any skin in the game. Either way, this new asset class is never boring.