The cryptocurrency market was crippled by high interest rates in 2022 and 2023, but has heated up again this year. bitcoin's (CRYPT: BTC) The price has soared almost 50% so far this year, as US regulators approved the first spot price exchange-traded funds (ETFs) and investors looked ahead to the upcoming halving, which will slow growth. of Bitcoin supply this year. Ethereum (CRYPT: ETH) The price has surged over 40% on hopes that regulators will also approve its spot price ETFs as the Ethereum network undergoes another upgrade.
That recovery has caused many investors to return to investing in cryptocurrency-related stocks such as Coinbase Global (NASDAQ: CURRENCY), Digital Marathon (NASDAQ: MARA)and Microstrategy (NASDAQ: MSTR). All three stocks represent easy ways to benefit from the expansion of the crypto marketand could rise much higher towards the end of the decade.
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1. Coinbase Global
Coinbase is one of the largest cryptocurrency exchanges in the world. In 2023, it generated 34% of its trading volume from Bitcoin, 20% from Ethereum, 11% from Tie (CRYPT: USDT) stablecoin, and the rest of other types of cryptoassets. That diversification makes it a great way to benefit from the long-term expansion of the crypto market.
Coinbase suffered a major slowdown over the past two years as rising interest rates drove investors away from cryptocurrencies and other speculative investments. But looking ahead, the rise in Bitcoin and Ethereum prices over the past few months will likely attract more retail investors and light a burning fire down his business again.
From 2023 to 2026, analysts expect Coinbase's revenue and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to grow at a compound annual growth rate (CAGR) of 9%. Based on those estimates, Coinbase stock appears reasonably valued at 26 times this year's adjusted EBITDA.
However, those forecasts seem too conservative if you believe that Bitcoin, Ethereum and other major cryptocurrencies will reach new heights. If the best-case scenario holds true, Coinbase could easily surpass those estimates and outperform the market through 2030.
2. Digital Marathon
Marathon is the largest proprietary Bitcoin miner in the world. They minted a record 12,852 bitcoins in 2023, representing a 210% increase from 2022, while their energized hash rate (which measures their total mining power) increased by 253%. It periodically sells its mined Bitcoin to raise more cash, but it still ended the year with 15,126 bitcoins (worth $947 million at the time of writing) and $357 million in cash and cash equivalents on its balance sheet.
Marathon could consolidate the Bitcoin mining market in the near future. Over the past year, it has already opened two new plants, launched a mining joint venture in Abu Dhabi and agreed to purchase several other mining sites. So I wouldn't be too surprised if it tried to buy out its closest competitor. Riot platforms (NASDAQ: RIOT).
Bitcoin will be increasingly difficult to mine with each halving, reducing the rewards for mining the cryptocurrency in half every four years, but Marathon could offset that pressure with economies of scale by expanding its mining operations and diluting its expenses. . Analysts expect its revenue to grow at a CAGR of 48% between 2023 and 2025, and it could grow even faster through the end of the decade if the price of Bitcoin soars and outperforms its main competitors.
3. Microstrategy
MicroStrategy was once considered a slow-growing enterprise software stock. That all changed when the company began making large purchases of Bitcoin over the past three and a half years. The company closed 2023 with 189,150 bitcoins on its balance sheet, with a market value of about $11.9 billion. That's nearly two-thirds of its $18.5 billion enterprise value, and plan to continue buying Bitcoin for the foreseeable future.
As MicroStrategy accumulates more Bitcoin, it is gradually expanding its subscription-based analytics services to offset the decline in its licensing and support revenue. Bulls believe that in the long term, MicroStrategy's software business will stabilize as its Bitcoin investments pay off.
So, like Coinbase and Marathon, MicroStrategy represents an easy way to benefit from the rising price of Bitcoin without directly purchasing the cryptocurrency. The company could also sell some of its Bitcoin to reduce its debt and expand its software ecosystem with large investments and acquisitions. If you play all those cards right, you could easily outperform the market by 2030.
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leo sun has no position in any of the stocks mentioned. The Motley Fool holds and recommends Bitcoin, Coinbase Global, and Ethereum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
