For many investors, the idea of gaining exposure to the cryptocurrency market is appealing, but the complexities and risks of buying digital coins directly can be a barrier. While institutions like BlackRock and Fidelity work on launching spot Bitcoin ETFs, there’s already a way to invest in the crypto space through traditional brokerages: crypto stocks.
These are stocks of companies that are directly involved in the cryptocurrency ecosystem or offer crypto-related products and services. We’ve analyzed dozens of such stocks and categorized them based on value, growth, potential, momentum, and mining focus to help you identify the best opportunities.
Remember, crypto stocks can be highly volatile, often even more so than Bitcoin itself. Always invest cautiously and ensure any investment aligns with your risk tolerance and overall strategy.
How to Buy Crypto Stocks
You can purchase shares of crypto-related companies through most major online brokerage platforms. These platforms offer access to stock exchanges where these companies are listed, along with research tools, educational resources, and various account types.
When selecting a brokerage, consider factors like:
- Commission fees for stock and ETF trades
- Available investment products (stocks, options, ETFs, crypto)
- Account minimums and funding options
- Interest rates on uninvested cash
- Quality of mobile and desktop trading platforms
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Best Value Crypto Stocks
We identified value picks by analyzing company fundamentals, year-over-year (YoY) revenue growth, positive recent news, and how far the stock price was from its all-time high.
Block Inc. (SQ)
Block is a digital payments company co-founded by Jack Dorsey. Its popular Cash App allows users to buy, sell, and transact with Bitcoin. The company demonstrated strong fundamental growth with a 32% YoY revenue increase in Q1 2023. Trading approximately 70% below its peak price, it presents a potential value opportunity for investors seeking crypto exposure through a established fintech player.
Applied Digital Corp. (APLD)
This US-based company provides high-performance computing (HPC) services to blockchain and artificial intelligence (AI) companies. With a market capitalization of over $900 million, it recently signed a significant $180 million deal with Character AI, which provided a positive catalyst for its stock. Despite this news, it was still trading about 75% off its all-time highs, suggesting potential for valuation recovery.
Canaan Inc. (CAN)
Canaan created the world’s first Bitcoin ASIC miner and is a key player in mining hardware. Headquartered in Singapore, the company is focusing on developing "green mining" solutions. Its YoY revenue growth was negative in Q1 2023, which is common for mining hardware companies during crypto bear markets when demand for equipment falls. Trading over 90% below its all-time high, it represents a high-risk, high-potential-reward value play.
Fastest-Growing Cryptocurrency Stocks
For this category, we prioritized exceptional YoY revenue growth figures from Q1 2023 (or a comparable quarter) and strong year-to-date (YTD) stock performance.
Applied Digital Corp. (APLD)
Applied Digital Corporation exhibited explosive growth, with revenue surging 193% YoY in its fiscal Q4 2023. This fundamental strength was reflected in its stock price, which was up over 400% YTD. Its role in providing infrastructure for both blockchain and AI makes it a unique growth story.
Interactive Brokers Group (IBKR)
As a brokerage offering access to crypto alongside traditional assets, Interactive Brokers capitalized on increased market activity. The company posted a robust 63.72% YoY revenue growth in Q1 2023. Its stock performance has been equally strong, trading within 10% of its all-time high, indicating sustained investor confidence.
Robinhood Markets (HOOD)
Known for democratizing investing, Robinhood allows users to trade stocks, ETFs, and cryptocurrencies. After a challenging 2022, the company rebounded with a 47.49% YoY revenue increase in Q1 2023. Its stock price followed suit, rising approximately 60% since the start of the year.
Crypto Stocks With Major Potential
These companies were selected based on strong overall scores from our methodology, solid fundamentals, and recent positive news that could act as a catalyst for future growth.
Coinbase Global, Inc. (COIN)
As the second-largest crypto exchange globally, Coinbase stands at a pivotal point. It is poised to be the custodian for BlackRock's proposed spot Bitcoin ETF, pending SEC approval. A recent court ruling that XRP is not a security when sold on secondary markets also strengthens its position in its legal battle with the SEC. These factors contributed to its stock being up over 200% YTD.
Advanced Micro Devices, Inc. (AMD)
AMD is a technology giant that manufactures CPUs and GPUs essential for blockchain transactions and crypto mining. While often compared to NVIDIA, its market cap is significantly smaller, suggesting room for growth. The stock has nearly doubled since the beginning of the year while still trading over 30% below its all-time highs, indicating potential for further appreciation.
Riot Platforms, Inc. (RIOT)
Riot is a major US-based Bitcoin mining company with a strong balance sheet, holding more cash than its peers and carrying no debt. Its ambitious plan to add 33,000 miners to its existing fleet in 2024 signals strong growth intentions. This has been recognized by the market, with the stock up more than 400% YTD.
Cryptocurrency Stocks With the Most Momentum
This category excludes Bitcoin miners (which have had immense momentum themselves) to highlight other companies experiencing significant positive price trends.
Coinbase Global, Inc. (COIN)
Coinbase's momentum continued from its potential category, fueled primarily by the positive XRP court ruling and its association with multiple spot Bitcoin ETF applications. This news provided a immediate and powerful upward push for its stock price.
MicroStrategy Incorporated (MSTR)
MicroStrategy, an enterprise analytics company, became a famous proxy for Bitcoin investment by aggressively adding BTC to its treasury as part of its capital allocation strategy. In the absence of a spot Bitcoin ETF, many investors turned to MSTR for exposure. This demand drove its stock up 200% YTD.
NVIDIA Corporation (NVDA)
NVIDIA's powerful GPUs are crucial for crypto mining and AI development. The company's incredible growth propelled it into the trillion-dollar market capitalization club alongside tech giants like Apple and Microsoft. Its stock, up over 200% YTD and trading near all-time highs, demonstrates powerful momentum driven by demand across its key sectors.
Bitcoin Mining Company Stocks
Bitcoin miners have been among the top-performing crypto stocks. We selected those with the highest technical analysis scores while also considering company fundamentals.
Marathon Digital Holdings (MARA)
One of the largest publicly traded Bitcoin miners, Marathon has a market cap exceeding $2.6 billion. The company significantly increased its Bitcoin holdings in May 2023, partly benefiting from the rise of Bitcoin Ordinals, which increased network transaction fees. Its stock is up over 300% YTD.
Riot Platforms, Inc. (RIOT)
As mentioned in the section on potential, Riot's strong fundamentals, debt-free status, and expansion plans make it a top contender in the mining sector. Its impressive YTD performance of over 400% underscores its momentum.
Iris Energy Limited (IREN)
Iris Energy differentiates itself by focusing on using renewable energy sources for Bitcoin mining. While its stock is also up over 300% YTD, investors should note its higher volatility, which is often associated with its smaller market capitalization of approximately $375 million.
All company and stock data was accurate as of July 2023.
Why Invest in Crypto Stocks?
Investing in crypto stocks offers a strategic way to gain exposure to the cryptocurrency market's growth without directly owning digital assets. This approach mitigates several unique risks associated with direct crypto ownership.
Firstly, you eliminate the risk of losing assets held on a centralized exchange that fails, as seen with FTX and Celsius. Secondly, you avoid the irreversible risk of losing the private keys to a self-custody wallet. Crypto stocks are held in your traditional brokerage account, providing a familiar and regulated framework for ownership.
Furthermore, crypto stocks can perform exceptionally well during bull markets, often outperforming the broader market indices. They also offer the advantage of being easily integrated into traditional retirement accounts like 401(k)s and IRAs, where direct crypto investment is often more complex or restricted.
Understanding the Risks
It is crucial to understand that crypto stocks carry significant risks. Their volatility typically exceeds that of traditional stocks, often leading to sharper declines during bear markets.
Additionally, the "crypto" aspect of these companies is not always permanent. A company like AMD might shift its focus more heavily toward AI and away from crypto mining. MicroStrategy could decide to sell its Bitcoin holdings. Such strategic pivots would change the nature of your investment and its correlation to the crypto market.
These stocks are generally not suitable for low-risk tolerance investors or those new to investing.
Frequently Asked Questions
What exactly is a crypto stock?
A crypto stock is a share of a publicly traded company whose business is significantly involved in the cryptocurrency or blockchain industry. This includes crypto exchanges (like Coinbase), mining companies (like Riot), companies that hold crypto on their balance sheet (like MicroStrategy), and tech firms that produce essential hardware (like NVIDIA).
How do I start investing in crypto stocks?
To invest in crypto stocks, you first need to open an account with a licensed online brokerage that offers access to the stock exchanges where these companies are listed. Once your account is funded, you can research different crypto stocks and place buy orders for their shares, just as you would with any other stock.
Are crypto stocks safer than buying cryptocurrency?
They involve different risks. Crypto stocks are subject to traditional market risks, company performance, and regulations governing equities. Direct crypto ownership carries risks like exchange failures, hacking, and key loss. However, crypto stocks are traded on regulated exchanges and can be easier to manage for those familiar with traditional investing. 👉 Learn more about risk management strategies
Can crypto stocks be a good long-term investment?
The long-term potential of any individual crypto stock depends on the company's ability to innovate, execute its business plan, and adapt to the evolving crypto and regulatory landscape. While the sector has significant growth potential, it remains highly volatile and speculative. A long-term investment should be based on thorough research and fit within a diversified portfolio.
Do I need to understand blockchain to invest in crypto stocks?
While a deep technical understanding isn't strictly necessary, having a foundational knowledge of blockchain technology and the cryptocurrency market is highly beneficial. It helps you understand the business models of the companies you're investing in, the competitive landscape, and the industry-specific risks they face.
How are crypto stocks affected by Bitcoin's price?
There is often a strong correlation between Bitcoin's price and the performance of crypto stocks. When Bitcoin's price rises, it generally boosts sentiment and revenue prospects for exchanges, miners, and related companies, often driving their stock prices up. Conversely, a falling Bitcoin price can negatively impact these stocks. However, this correlation isn't perfect, and company-specific factors also play a major role.