Over the past decade, cryptocurrencies have gained significant popularity. While many people remain in the dark about the workings of cryptocurrencies, they are undoubtedly making their way to mainstream markets.
When hearing the term “crypto,” the first thing people often think about is bitcoin or ethereum. While the whole cryptocurrency market is still relatively new, the industry has grown tremendously, with a current market capitalization of about $910.41 billion, according to CoinMarketCap.
Due to surges in value, many early crypto investors have made millions seemingly overnight. Although many lost money just as quickly, investors are still on the watch for the next cryptocurrency to invest in.
Crypto Market Growth and Volatility
With more than 22,000 cryptocurrencies, investor interest is growing for a good reason. Cryptocurrencies can be a lucrative way to amass wealth, especially for early investors looking to hold assets long-term. However, the gains aren’t guaranteed since the crypto market is highly volatile — causing many investors to have second thoughts.
Since the crypto market is relatively new, that could explain some of the massive price swings seen in various coins. Although this level of volatility is a risk factor, cryptocurrency-related investments can be a good fit for some investors.
Fortunately, there are several ways to gain exposure to the various digital assets without directly investing in a specific coin. Buying stocks that deal with blockchain technology or investing in crypto assets is one way to have indirect exposure to cryptocurrencies.
You may be wondering: What are the best cryptocurrency stocks to buy? Here are the top companies that have already found their way into the crypto space.
11 Best Cryptocurrency Stocks To Buy
Here are the top cryptocurrency stocks you may want to add to your portfolio.
1. Coinbase Global Inc. (COIN)
Coinbase is one of the top cryptocurrency exchanges, with over 108 million verified users. In April 2021, it became a publicly-traded company through its initial public offering. The company is struggling right now. However, it’s still the largest exchange available to U.S. investors and has no close competitors in terms of daily trading volume and number of markets.
The crypto trading platform allows users to buy and sell digital assets, including bitcoin, ethereum, solana, cardano and hundreds of other coins, at a small fee. While Coinbase is a crypto trading platform, it has several other features that make it one of the best cryptocurrency stocks to buy.
The company offers blockchain analytics to governments, financial institutions and crypto businesses. Users can monitor fraudulent transactions and millions of wallet addresses across the crypto space using Coinbase analytics. With rising cybercrime cases, blockchain analytics ultimately build more trust in the industry.
The crypto exchange company is also in the non-fungible token space. The primary reason for this move is to expand the creator economy by allowing artists and others to profit from their work. Coinbase NFT means more accessibility to NFTs.
2. Tesla Inc. (TSLA)
Tesla, an electric car company, ranks second on the list of the best cryptocurrency stocks. It has proven to be one of the most successful companies in the EV market, with a market cap that has reached over $1 trillion during stock surges and currently sits at $390.17 billion.
The stock reached its 52-week low on Jan. 2 in the wake of price cuts and controversy over CEO Elon Musk’s management of Twitter. While it reversed course quickly as the likelihood increased that Musk would appoint a new Twitter CEO, Tesla stock still looks like a good value.
Musk is a cryptocurrency advocate and believes in the future of crypto assets. Tesla purchased $1.5 billion worth of bitcoin in 2021. Before Tesla sold 75% of its holdings, the value soared, and then plummeted. However, the loss is small beans for Tesla, representing a minor percentage of its cash position and a fraction of a percent of its market value.
In February 2021, Tesla went the extra mile to accept bitcoin payments to purchase its electric vehicles. Tesla suspended bitcoin as a form of payment shortly thereafter, pointing to environmental impacts. Musk later said the company would likely resume accepting bitcoin payments once the environmental issues have been resolved.
Apart from bitcoin, Musk has also become a public face of other cryptocurrencies, including ethereum and dogecoin.
With the rising crypto adoption and the potential for Tesla’s cryptocurrency investments to support its bottom line, investing in Tesla stock is a way to gain indirect exposure to cryptocurrency while investing in an innovative market leader in EV technology.
3. NVIDIA Corporation (NVDA)
Nvidia is a graphics processing unit manufacturer that produces chips used in everyday devices. However, the company is best known for its high-end video gaming graphics cards.
Nvidia’s CMP HX card was designed for professional mining. The business has been volatile, first because of supply chain shortages, and more recently because a decline in cryptocurrency prices has reduced demand for mining equipment.
And highlighting the perils of investing in a relatively new technology, Nvidia agreed to a $5.5 million fine for failing to disclose the effects of mining on its business — namely, that miners exacerbated the graphics card shortage and drove up demand by grabbing up the cards.
The company has added a mining limiter to newly released cards to prevent future mining-related runs on its product. However, as the creator of technology that supports cryptocurrency mining and plays an integral part in the PC graphics card industry overall, Nvidia is a solid crypto investment.
4. Advanced Micro Devices Inc. (AMD)
Like Nvidia, AMD is among the leading designers of graphics processing units and central processing units used in crypto mining. While it does not deal with cryptocurrencies directly, it is responsible for high-end graphics cards that power applications to create crypto assets.
The creation of cryptography and blockchain requires intensive computational power. In this case, GPUs are perfect. They are a fundamental piece of hardware that makes it possible to create and manage crypto assets.
AMD has safely positioned itself as an industry leader in chip technology. The company continues to develop more technologies such as blockchain, making it a worthy investment now and in the future.
5. Block (SQ)
The introduction of digital payment methods was mainly aimed at eliminating central intermediaries and reducing costs for both consumers and businesses. Block — formerly Square — is focused on blockchain, enabling users to buy and hold cryptocurrencies in a digital wallet.
Block has made advancements by allowing bitcoin trading on its Cash App. The company aims to foster bitcoin use among its users and businesses and is set to become a leading platform for crypto transactions between companies and their customers.
Traditionally, people have had to rely on banks for international transactions, and they typically pay huge sums in foreign exchange fees. With cryptocurrency transactions, the central intermediary is removed, so less money is spent on the transaction process.
With an expansion into cryptocurrency and a focus on blockchain, Block stock is a worthwhile investment for experienced or beginner crypto venturers.
6. PayPal Holdings (PYPL)
PayPal is at the forefront of the digital payment revolution, and its goal is to leverage technology to simplify commerce and make financial services more convenient and affordable for its customers.
A forerunner of Cash App, PayPal is a global online payment system. It allows peer-to-peer money transfers through its mobile app, Venmo, along with several other ways for people to get paid. In late 2020, PayPal unlocked crypto trading. Venmo became one of the leading crypto platforms by allowing the trading of bitcoin, bitcoin cash, ethereum and litecoin. The company is exploring launching its own stablecoin.
Cryptocurrency is now an important part of PayPal’s business, as it says the digitization of payments and currency is inevitable. PayPal has become a solid access point for any investor who wishes to buy major cryptocurrencies and use them to purchase altcoins or access decentralized finance applications. That and its role as a payments processing innovator and leader make PayPal a worthwhile investment.
7. Marathon Digital Holdings Inc. (MARA)
Marathon Digital Holdings is currently one of the largest bitcoin mining companies in the U.S. Mining enables the verification of transactions, the security of the blockchain and the addition of new coins and tokens into the market.
MARA helps people gain exposure to bitcoin without holding the asset directly and working through the complications, and it aims to build the largest bitcoin mining operation at the lowest energy cost possible. The company focuses on sustainability and environmental protection, so it uses renewable energy providers in its operations.
In addition, Marathon boasted 69,000 active miners as of Jan. 1 and a total of 12,232 bitcoins in its holdings, including 7,815 unrestricted bitcoins.
The company’s growth can be attributed to its investment in miners to increase the speed of bitcoin mining to make production a lot more efficient and profitable. The fourth quarter of 2022 was one of the most productive in its history, according to a Jan. 5 press release.
8. Riot Blockchain Inc. (RIOT)
Riot Blockchain, America’s largest bitcoin mining company, is focused on expanding its operations by increasing its bitcoin mining hash rate and infrastructure capacity, according to the company’s website. Riot has a couple of joint ventures, internally developed businesses and other investments in the blockchain sector.
The company is primarily focused on bitcoin and blockchain technology in general, anticipating a fleet of 115,450 miners by 2023. The company also aims to develop a blockchain-based escrow service for wholesale telecom carriers.
As a company directly engaged in cryptocurrency, Riot is a riskier investment than some of the companies on this list. That said, Riot’s early entry and dominant position give it a significant edge over its competitors.
9. MicroStrategy Inc. (MSTR)
MicroStrategy Incorporated is a business intelligence and analytics solutions company. The company’s operations involve the design, development, marketing and sales of its software platforms. This is mainly done through cloud subscriptions, licensing arrangements and other related services.
MicroStrategy helps its customers optimize and maintain their business intelligence platforms. Customers come from a wide range of industries, including consulting, technology, banking, finance, insurance, telecommunications and manufacturing.
The company’s involvement in cryptocurrency stems from its purchase of $4 billion worth of bitcoin, some of which it bought with borrowed funds. MicroStrategy purchased an additional 301 coins last summer. The $6 million cash purchase brought the company’s total holdings to about 130,000 bitcoins, according to a filing with the Securities and Exchange Commission.
This company’s primary value as an investment comes from its core business, not its investments — a fortunate fact for investors, considering that MicroStrategy paid an average of $30,639 per bitcoin. Bitcoin sold for just over $19,000 on Jan. 13. But if you believe its bitcoin holdings could eventually pay off, you might consider investing.
10. CME Group Inc. (CME)
CME Group is the world’s largest derivatives marketplace. It aims to deliver new and innovative ways of managing risk and improving performance. The company allows you to trade futures and a diversified number of assets, including stocks and currencies, across several industries. This is where cryptocurrency comes in.
CME Group established a market for “micro” bitcoin futures options in 2017. Today, bitcoin and ether futures and options and micro ether futures are also available, allowing businesses and individuals to mitigate the risk of rapid changes in cryptocurrency prices.
While crypto derivatives are still a relatively small market for CME, more crypto assets will likely be added to the exchange.
11. Hut 8 Mining Corp. (HUT)
Hut 8 Mining is another popular cryptocurrency mining company worth considering for your portfolio. The company is based in Canada and is known for mining both bitcoin and ethereum. Now that Ethereum’s upgrade to a proof-of-stake protocol is complete, rendering mining obsolete on that network, Hut 8 is expanding beyond cryptocurrency mining to machine learning, artificial intelligence and other alternative services, Decrypt reported.
The company still offers its investors direct exposure to bitcoin through its mining operations. Hut 8 Mining utilizes specialized equipment that solves computational problems and validates transactions to provide hosting services to its institutional clients. With Hut 8, you avoid the complexities and constraints of buying actual cryptocurrencies. Additionally, it uses alternative energy sources to ensure the sustainability of its operations.
Until recently, Hut 8 lent out its mined bitcoin instead of selling it, which resulted in compounded returns. It currently has all of its coins back in its own custody, according to CoinDesk. As of Dec. 31, 2022, it had 9,086 coins in reserve — a 65% increase over the balance at the end of 2021, according to a Jan. 6 press release.
Hut 8 will be a 100% self-mining company upon completion of the buyout of its hosted rigs at a mining facility in Alberta.
Good To Know
As with any other investment, there’s no guarantee of which asset will generate returns, and cryptocurrency stocks are no exception. Plus, cryptocurrencies are highly volatile, and they could potentially impact the prices of companies involved in blockchain technology.
Many investors shy away from crypto due to volatility, but don’t let that deter you from this investment opportunity. With more companies embracing blockchain technology, you can benefit indirectly by purchasing stocks involved in the crypto space.
Still on the fence about investing in cryptocurrency stock? Here’s some more information to help you decide if it’s the right investment for you.
What is the best crypto stock to buy?
The best crypto stock for a particular investor depends on their risk tolerance and investment objectives. More cautious investors might consider a well established company like PayPal or Nvidia, both of which are leaders in their respective markets and offer the added benefit of having been early entries into the cryptocurrency space.
Are crypto stocks a good investment?
Crypto stocks could be a good long-term investment, especially if you invest in companies that don’t rely strictly on cryptocurrency to survive. Always research companies before you invest, and never invest more than you can afford to lose.
What is the best cryptocurrency to invest in for 2023?
With over 22,000 coins available, it’s impossible to identify one as being better than all of the others. However, bitcoin could be a good investment because it’s widely accepted. Coins for newer blockchains operating at the forefront of smart contracts and NFTs – the so-called Ethereum killers – are also worth considering. Solana and cardano are two examples.
How do I invest in cryptocurrency stocks?
Before you can invest, you’ll need to open a brokerage account. You can do that through a traditional broker like Schwab or through an app, such as Robinhood. Follow the prompts to complete the application, and then indicate how you’d like to fund the account. Once your account has been funded, you can start buying and selling stocks.
Research stocks using information provided by your broker, company websites and news reports to decide which you’d like to purchase. Then select your choice on the broker’s site or in the app and select the “buy” or “trade” button or link. Enter the number of shares you want to purchase – or the dollar amount you want to spend on fractional shares – and submit your order.
Daria Uhlig contributed to the reporting for this article.
Information is accurate as of Jan. 13, 2023.