In the dynamic world of over 23,000 cryptocurrencies, the allure of long-term wealth accumulation is undeniable. Early investors, particularly those with a long-term vision, see cryptocurrencies as a potential gold mine. Yet, the path to riches isn’t straightforward.
The notorious volatility of the crypto market often gives pause, making some investors reconsider their strategies. In this article, we’ll explore the best crypto stocks poised for long-term growth, offering a more structured approach to tapping into the crypto realm’s potential.
Hi, I’m Zifa. With over 3 years of experience writing about crypto, I’ve come to understand that direct crypto investments might not suit everyone. If you’re hesitant about cryptocurrencies but still want a piece of this booming sector, you’re in the right place. Dive into this article to discover the world of crypto stocks and how they might be the perfect fit for you.
What Is a Crypto Stock?
A crypto stock refers to a publicly traded company that operates within the cryptocurrency market or is significantly involved in blockchain technology. With the rise of digital currencies and the increasing integration of blockchain technology across various industries like healthcare, banking, agriculture, crypto stocks have gained traction among investors.
Crypto stocks encompass a range of companies, including crypto exchanges and firms that invest in cryptocurrencies.
Additionally, crypto stocks may involve companies engaged in cryptocurrency mining. Cryptocurrency miners validate transactions and secure blockchain networks by solving complex mathematical problems, earning rewards in the form of digital currencies.
Crypto stocks provide investors with an opportunity to gain exposure to the growing cryptocurrency market and capitalize on the potential of blockchain technology.
Can You Buy Cryptocurrency on the Stock Market?
No, you cannot buy cryptocurrency directly on the stock market.
While some companies may be involved in both the cryptocurrency and stock markets, they are separate entities. Cryptocurrency can be bought and sold on cryptocurrency exchanges — namely, platforms specifically designed for trading digital currencies. Therefore, if someone wants to buy cryptocurrency, they need to use a cryptocurrency exchange rather than the stock market.
What Cryptocurrency Is on the Stock Market?
There isn’t a single cryptocurrency listed directly on the stock market. Cryptocurrencies operate on their own distinct markets, meaning they are not traded on traditional stock exchanges. However, crypto-related stocks available on the stock market allow investors to gain exposure to the crypto industry without buying digital currencies.
How to Choose Cryptocurrency Stocks?
When choosing cryptocurrency stocks, investors should keep in mind several key factors. These factors can help assess the potential of a crypto stock and mitigate risks. Here are some important considerations:
1. Diversified Business Models: Look for crypto stocks with diversified business models. Companies engaged in various aspects of the cryptocurrency industry, such as exchanges, mining, and investment, can offer more stability and broader exposure to the market.
2. Profitability: Analyze the financial performance of crypto stocks. Look for consistent growth in revenue and earnings over time. Profitability indicates the company’s ability to generate returns and sustain its operations.
3. Valuations: Assess the valuation of crypto stocks by comparing their market price to their earnings or other relevant financial metrics. Consider whether the stock is overvalued or undervalued compared to its industry peers.
4. Market Shares: Evaluate the market share of cryptocurrency companies. Companies with a larger market share may have a competitive advantage and be better positioned for long-term growth.
5. Analyst Coverage: Check if the crypto stock is covered by reputable analysts. Analyst reports can provide valuable insights and recommendations based on in-depth research.
6. Debt Levels: Examine the debt levels of crypto stocks. High levels of debt can increase financial risks and affect the company’s ability to navigate through market downturns.
Top Cryptocurrency Stocks for 2023
Crucial factors to consider when selecting a cryptocurrency stock are plentiful. Having taken time to dig into them, I’ve taken the liberty to curate a list of what I believe are the best crypto stocks for 2023. It’s important to note that this compilation is based on my personal analysis and preferences, derived from the methodology I outlined earlier. This is not to be taken as financial advice. In the sections that follow, we’ll examine each stock, providing a detailed overview to help you understand its potential and significance.
PayPal Holdings (PYPL)
PayPal Holdings is a prominent player in the cryptocurrency market, revolutionizing the way people transact and manage digital currencies. With its innovative features, PayPal has made crypto trading accessible through its PayPal and Venmo apps.
Through these apps, PayPal has simplified the process of buying, holding, and selling cryptocurrencies, providing a seamless and user-friendly customer experience. This inclusion of crypto trading in its platforms has attracted many users — both experienced and new — to the crypto space.
PayPal’s commitment to leveraging technology is evident in its efforts to make financial services more convenient and affordable. By integrating crypto trading features into their apps, PayPal allows users to effortlessly manage their digital assets, monitor their investments, and engage in the dynamic crypto market.
PayPal currently supports major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). This selection of supported cryptocurrencies positions PayPal as a leading cryptocurrency platform, catering to the diverse preferences of crypto investors.
With its user-friendly interfaces, robust security measures, and commitment to innovation, PayPal Holdings empowers individuals to explore and participate in the cryptocurrency market with confidence and ease.
CME Group (CME)
CME Group is one of the world’s leading and most diverse derivatives marketplaces. Founded as the Chicago Mercantile Exchange in 1898, the company has grown and evolved over the years, merging with other exchanges and expanding its product offerings. Today, CME Group operates several major exchanges, including the original Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBOT), the New York Mercantile Exchange (NYMEX), and the Commodity Exchange, Inc. (COMEX).
Putting its extensive experience in managing derivatives markets to good use, CME Group provides a regulated and secure platform for institutional investors to trade and manage risk in the crypto space. This is crucial in the market known for its volatility.
By offering futures and options products specifically for Bitcoin, CME Group enables investors to take positions on the future price of the cryptocurrency. This allows them to hedge their existing Bitcoin holdings or speculate on BTC price movement without actually owning the underlying asset.
The involvement of CME Group in the cryptocurrency market is significant as it provides credibility and legitimacy to digital currencies. By offering these regulated trading products, CME Group attracts institutional investors who may have been hesitant to enter the crypto space due to concerns related to safety and oversight.
As the cryptocurrency market continues to grow, CME Group’s role as a derivatives marketplace for digital currencies like Bitcoin is becoming increasingly important. It not only provides a platform for investors but also contributes to the overall maturity and stability of the cryptocurrency market.
Coinbase Global Inc. (COIN)
Coinbase Global Inc. (COIN) is one of the largest cryptocurrency exchanges in the United States. With over 68 million verified users, it is the leading platform for buying, selling, and exchanging various digital assets.
Coinbase made headlines in April 2021 when it launched its highly anticipated initial public offering (IPO). As a result, it became the first major cryptocurrency exchange to be listed on the Nasdaq stock exchange.
As the leading exchange for U.S. investors, Coinbase offers a user-friendly interface and a wide range of cryptocurrencies to choose from. Bitcoin, the world’s largest cryptocurrency, can be traded on the platform, along with other popular digital assets such as Ethereum, Solana, and Cardano. Coinbase provides a secure and regulated environment for users to engage in crypto trading, making it an attractive choice for both beginners and experienced investors.
With the rise of digital currencies and increasing mainstream adoption, Coinbase’s IPO brought significant attention and legitimacy to the cryptocurrency industry. It showcases the growing importance of cryptocurrency exchanges in the financial world and highlights the potential of digital assets as an investment class.
Coinbase’s status as a publicly traded company further solidifies its weight in the crypto space and provides investors with an opportunity to participate in the growth of the digital asset market.
Riot Blockchain Inc. (RIOT)
Riot Blockchain Inc. (RIOT) is a company that focuses on Bitcoin mining and has been making significant efforts to expand its mining hash rate and infrastructure capacity. With a primary objective of securing the Bitcoin network, RIOT is continuously enhancing its mining operations to support the growing demand for this digital currency.
In addition to its Bitcoin mining activities, RIOT has also ventured into various partnerships, internally developed businesses, and investments in the blockchain sector. These initiatives aim to diversify the company’s revenue streams and capitalize on the potential of blockchain technology beyond cryptocurrency mining.
Investing in RIOT comes with both risks and advantages. On the one hand, the company is directly engaged in the cryptocurrency industry, which can be subject to wild swings. This means that the value of RIOT’s shares may be influenced by fluctuations in cryptocurrency prices and market sentiment. However, on the other hand, RIOT’s focus on Bitcoin mining positions it to benefit from the increasing market capitalization of major cryptocurrencies like Bitcoin.
Moreover, considering its ongoing expansion efforts, RIOT is well-positioned to potentially increase its market share and capitalize on the growing demand for cryptocurrency mining. As the blockchain sector continues to evolve, RIOT’s investments and partnerships provide an opportunity for the company to explore new avenues within this emerging industry.
Investors contemplating RIOT should carefully assess the risks associated with the cryptocurrency market, as well as the potential advantages of investing in a company directly involved in bitcoin mining. It is essential to analyze RIOT’s financial performance, competitive positioning, and strategic initiatives to make informed investment decisions.
Block (SQ)
Block Inc. (SQ) is a digital payment company that continues to push the ever-evolving world of finance and technology forward. Co-founded by Jack Dorsey, the CEO of Twitter, Block has experienced considerable growth over the past five years.
One of its most popular offerings is the Cash App, which allows users to invest in stocks and Bitcoin. This groundbreaking product enables individuals to seamlessly buy and sell cryptocurrencies (including Bitcoin) and also provides the option to invest in traditional stocks. Thanks to the Cash App, users can easily navigate the cryptocurrency market and diversify their portfolios in a few clicks.
Block’s (SQ) co-founder is Jack Dorsey, a well-known figure in the tech industry.Under his leadership, the company has experienced substantial growth, with a year-over-year revenue increase of 32% as of Q1 2023.
The stock itself is still trading approximately 70% off its all-time highs when it first began trading in 2018. While this has impacted many investors, this same volatility could also aid those willing to take a chance on one of the biggest players in fintech today. Despite this drop, the overall sentiment around Block remains positive as more people gravitate towards digital payment solutions and dependable financial technologies. Investing in Block could prove quite lucrative — especially for those who can spot the long-term potential early enough.
MicroStrategy Inc. (MSTR)
MicroStrategy Inc. (MSTR) is a renowned business intelligence company that has made headlines with its involvement in the world of cryptocurrency. Primarily known for its cutting-edge business analytics and intelligence software, MicroStrategy has also ventured into the realm of digital assets.
One of the standout moves made by MicroStrategy was its decision to invest heavily in Bitcoin. In fact, the company has become one of the largest institutional holders of Bitcoin in the world — I wrote about it in this article. MicroStrategy consistently adds to its Bitcoin holdings, viewing it as a long-term investment and a store of value.
For investors looking to gain exposure to Bitcoin without directly purchasing the cryptocurrency itself, MicroStrategy presents an intriguing option. The company can be seen as a proxy for direct Bitcoin investment because of its significant Bitcoin holdings. This allows investors to potentially benefit from the growth and stability of Bitcoin through their investment in MicroStrategy.
Hive Digital Technologies Ltd. (HIVE)
Hive Digital Technologies Ltd. (HIVE) is a prominent cryptocurrency mining company that also provides cloud computing services. Established in Canada, Hive Digital Technologies has expanded its operations to Sweden and Iceland, capitalizing on the favorable conditions for cryptocurrency mining in these regions.
Previously known as HIVE Blockchain Technologies Ltd., the company underwent a rebranding to Hive Digital Technologies Ltd. to better reflect its focus on cryptocurrency mining and cloud computing. This move showcases the company’s commitment to staying at the forefront of the rapidly evolving crypto market.
As a cryptocurrency mining firm, Hive Digital Technologies utilizes advanced hardware and software to mine popular cryptocurrencies like Bitcoin and Ethereum. By solving complex mathematical problems, the company validates and secures cryptocurrency transactions on the blockchain while earning mining rewards.
Additionally, Hive Digital Technologies leverages its extensive infrastructure and expertise to offer cloud computing services, catering to a wide range of clients in need of reliable and efficient computing power.
Hive Digital Technologies has made considerable strides in the market, with a current market value that reflects its strong position in the cryptocurrency industry. The company has also delivered impressive year-to-date returns, further cementing its reputation as a valuable player on the market.
Marathon Digital Holdings Inc. (MARA)
Marathon Digital Holdings Inc. (MARA) is widely recognized as one of the largest Bitcoin mining companies in the United States. What sets MARA apart is its commitment to sustainability and renewable energy in its mining operations.
With over 90,000 active Bitcoin miners, Marathon Digital Holdings plays a significant role in securing and validating crypto transactions on the Bitcoin blockchain. Through their state-of-the-art mining rigs, the company efficiently solves complex mathematical problems and earns rewards in the form of bitcoins.
Notably, Marathon Digital Holdings boasts a substantial holding of 11,392 bitcoins, which further solidifies their position in the market.
Beyond Bitcoin mining, MARA provides essential services to the wider crypto industry. They offer transaction and custody verification, ensuring secure and transparent transactions for users. Additionally, the company is actively engaged in blockchain security work, enhancing the overall safety and integrity of this emerging technology.
Nvidia Corp. (NVDA)
Nvidia Corp. (NVDA) is a key player in the crypto industry as a leading semiconductor manufacturer. The company specializes in providing graphics processing units (GPUs) that found applications in various fields (e.g., cryptocurrency mining and artificial intelligence).
In 2023, Nvidia has been delivering exceptional performance, making it one of the top performers in the market. With year-to-date returns of 225.1%, the company has attracted significant attention from investors. Its innovative technology and strategic positioning in the crypto space have enabled Nvidia to capitalize on the growing demand for GPUs.
As cryptocurrency mining continues to gain momentum, Nvidia’s GPUs play a crucial role in powering the computational process required for mining various digital currencies. Moreover, the company’s GPUs are extensively utilized in artificial intelligence applications, leveraging their high-performance capabilities.
Nvidia’s success in the crypto industry can be attributed to its ability to adapt and cater to the market. By providing top-of-the-line graphics processing units, the company has strengthened its position as a trusted supplier for crypto miners and AI developers.
Tesla Inc. (TSLA)
Not only is Tesla Inc. (TSLA) synonymous with electric vehicles (EVs), it also emerged as a top cryptocurrency stock. Having a strong connection to the crypto market, Tesla has made headlines for its purchase and sale of Bitcoin, acceptance of Bitcoin payments for its products, and CEO Elon Musk’s advocacy for cryptocurrencies like Ethereum and Dogecoin.
Elon Musk has been a vocal supporter of cryptocurrency, and his intervention in the markets is combative at times. In 2021, Tesla made a move to diversify its cash holdings by investing $1.5 billion in Bitcoin. This decision saw the price of Bitcoin surge exponentially for a time before dropping back down shortly thereafter. Even though Tesla sold off around 75% of its initial investment, the loss was barely felt by the massive company in terms of percentage against its market capitalization and cash position.
By investing in Tesla stock, investors can gain indirect exposure to the cryptocurrency world while benefiting from Tesla’s position as an innovative leader in the EV market. The company’s involvement in the crypto space has attracted attention and brought big market share and capitalization.
Robinhood Markets (HOOD)
Robinhood Markets (HOOD) is a financial services company whose commission-free model has transformed the traditional brokerage industry. One of the key aspects that sets Robinhood apart is its ability to enable users to trade cryptocurrencies seamlessly along with traditional assets like stocks and ETFs. This inclusion of cryptocurrencies gives Robinhood a competitive advantage over both traditional and decentralized exchanges.
By offering commission-free cryptocurrency trading, Robinhood attracts a bigger user base that may have been deterred by high transaction fees on other platforms. This accessibility makes it easier for retail investors to participate in the cryptocurrency market, potentially boosting adoption in the sector.
To further promote trust in the cryptocurrency space, Robinhood can expand its services to include crypto analytics. By providing users with comprehensive data analysis on various cryptocurrencies, including market trends, volatility, and historical performance, Robinhood can empower investors to make informed decisions. Apart from enhancing trust in the sector, this helps users navigate the complexities of the cryptocurrency market.
Where to Buy Cryptocurrency Stocks?
When it comes to purchasing cryptocurrency stocks, there are several platforms available to investors. Many crypto-related companies are listed on prominent stock exchanges like the New York Stock Exchange (NYSE) and the NASDAQ.
The NASDAQ, originally an acronym for the “National Association of Securities Dealers Automated Quotations,” is a global electronic marketplace for buying and selling securities. Established in 1971, it was the world’s first electronic stock market. It’s home to many of the world’s leading tech companies, including giants like Apple, Microsoft, Amazon, and Google’s parent company, Alphabet.
Another platform where investors can buy cryptocurrency stocks is the New York Stock Exchange (NYSE). As one of the largest stock exchanges in the world, the NYSE offers a wide range of investment options, including stocks of companies involved in the digital currency space. By purchasing these stocks, investors can gain exposure to the crypto industry through a trusted and regulated platform.
Online brokerage platforms like E*TRADE, Robinhood, Fidelity, and Charles Schwab allow users to buy and sell stocks of companies related to the cryptocurrency industry.
The accessibility of these platforms is a key advantage for investors: individuals can easily open an account and start buying cryptocurrency stocks. This accessibility democratizes investment opportunities in the cryptocurrency market, allowing retail investors to participate in an industry that was once exclusive to larger institutions.
It is worth noting that these platforms are based in the United States, which holds significance for investors. The U.S. market is highly regulated, providing investors with a certain level of security and transparency. This is particularly important in the cryptocurrency space, where scams and fraudulent activities are not uncommon. Investing in cryptocurrency stocks through reputable platforms in the U.S. helps mitigate some of these risks, ensuring a safer investment experience.
If you’re looking for exposure to crypto companies outside the U.S., consider global exchanges like the Toronto Stock Exchange or the Hong Kong Stock Exchange, which list several crypto-related firms.
Is Crypto Stock a Good Investment?
The potential and viability of crypto stocks as an investment largely hinge on an individual’s risk tolerance, investment horizon, and belief in the underlying technology.
For Whom It May Be a Good Investment?
- Believers in Blockchain: Those who understand and believe in the transformative potential of blockchain technology might see crypto stocks as a forward-looking investment. Blockchain has the potential to revolutionize various sectors, from finance to supply chain, and investing in crypto stocks can be a way to bet on this technological evolution.
- Risk-Tolerant Investors: The cryptocurrency market is known for its volatility. Prices can swing dramatically in short periods, leading to potential high returns as well as significant losses. Investors who have a higher risk tolerance and are comfortable with these price swings might find crypto stocks appealing.
- Long-Term Visionaries: If you are looking at the long-term potential and are willing to weather short-term market fluctuations, crypto stocks might align with your investment strategy. The crypto industry is still in its nascent stages, and those with a long-term perspective might see current challenges as growth pains leading to future rewards.
For Whom It Might Not Work?
- Conservative Investors: Those who prioritize capital preservation and seek stable, predictable returns might find crypto stocks too volatile. The inherent unpredictability of the crypto market might not align with the goals of conservative investors.
- Short-Term Traders: While some short-term traders thrive in volatile markets, the unpredictability of crypto stocks can make short-term trading strategies less effective, leading to potential losses.
- Uninformed Investors: The crypto industry is complex. Without a proper understanding of the technology, market dynamics, and regulatory landscape, uninformed investors can make decisions that don’t align with their best interests.
In conclusion, like with any investment, it’s crucial to conduct thorough research, understand the risks, and consult with financial professionals when considering crypto stocks as a part of your portfolio.
Benefits of Cryptocurrency Stocks
Cryptocurrency stocks offer a great opportunity to those interested in the potential of blockchain technology. These stocks can lead to high returns, potentially boosting your investment. By putting money into these stocks, you’re diving into a sector that’s growing quickly and could reshape many industries.
Blockchain technology, which powers virtual currencies, has the capability to change sectors like finance, supply chain, and healthcare. So, when you invest in cryptocurrency stocks, you’re not just getting involved with blockchain. You’re also looking at other areas that might be transformed by this technology.
Plus, investing in these stocks is simpler than diving directly into digital currencies. They’re listed on familiar stock exchanges, such as the New York Stock Exchange, making it both convenient and secure for investors.
In a nutshell, cryptocurrency stocks give a chance for high returns, a way to get into the exciting world of blockchain, and a view into various industries that might change because of it. By choosing these stocks, you’re positioning yourself to benefit from the rise of digital currencies and the shifts they might cause in different sectors.
Risks of Cryptocurrency Stocks
Cryptocurrency stocks present risks that must be taken into account prior to investment. Most importantly, prices of digital assets can be highly volatile due to speculation, and investors should understand their risk appetite when making decisions.
Moreover, the market is dominated by speculative trading, meaning that buyers are not necessarily interested in utilizing or studying blockchain technology but rather making money off of major changes in a given currency’s price. This speculative behavior has been warned against by notable business figures such as Warren Buffett and JPMorgan CEO Jamie Dimon, who have alluded to a potential bubble in cryptocurrency trading.
As such, it is important to consider carefully whether or not investment in this volatile sphere would be wise relative to one’s appetite for risk.
Final Take
Investing in cryptocurrency stocks offers a unique blend of opportunities tied to the growth of the blockchain and digital currency sectors. However, it’s accompanied by inherent risks, notably market volatility and regulatory uncertainties. As with any investment, thorough research and understanding are crucial before venturing into the world of crypto stocks.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
