Bitcoin (Cryptocurrency: BTC) This year it hit a new all-time high, and is expected to rise by about 300% from 2023. However, there are probably better crypto investments that investors could have held during this time.
coinbase global (NASDAQ:Coin), micro strategy (NASDAQ:MSTR)and clean spark (NASDAQ: CLSK) All currencies outperformed popular digital currencies during that period. Let's take a closer look at how these stocks have performed since last year, from minimum to maximum.
Coinbase Global: 518%
Coinbase Global operates a popular cryptocurrency exchange that benefits from the growing popularity of cryptocurrencies. It also provides more diverse investment options for investors, as they do not have to rely completely on Bitcoin. Although it is the most popular digital currency, it accounted for just 34% of the exchange's trading volume last year.
In 2023, Coinbase Global reported a profit of $94.9 million (a significant improvement from 2022, when it suffered a loss of $2.6 billion) as it reduced expenses and did not incur significant impairment charges. The company derives approximately half of its revenue from subscriptions and services and the other half from transactions, further highlighting its diversification.
The stock trades at more than 17 times earnings, but with a price-to-earnings ratio (P/E) of less than 1, it could still be a good buy over the long term if you're bullish on cryptocurrencies. However, Coinbase's performance ultimately depends on the performance of Bitcoin and other digital currencies, so this remains a volatile and risky stock. And as the scale of the business expands, it may become difficult to maintain a surplus.
Clean spark: 765%
Since CleanSpark is a Bitcoin miner, its performance will be directly affected by the rising price of the digital currency. Higher prices mean more revenue for your business. Unfortunately, the recent halving event will reduce the company's output and result in fewer Bitcoins being produced.
But CEO Zach Bradford isn't concerned, pointing to the company's high margins as a key differentiator and why it could succeed where other miners may fail. I rely on it. As one of the large miners, Bradford said, “…after the halving, our pie should be even bigger. We're thinking 10%, 15%, even 20%. “There is,” he said.
In the last three months of 2023, the company made a profit of $25.9 million, compared to a loss of $29 million in the year-ago period. But that was with the help of a $36 million gain in Bitcoin's fair value.
As one of the major miners, it may do well despite the recent halving event. However, the concern is that the company needed high digital coin prices and asset returns to turn a profit last quarter. CleanSpark is a riskier option than his Coinbase and may be suitable only for the most bullish Bitcoin investors.
Microstrategy: 790%
One of the hottest stocks over the past year has definitely been MicroStrategy. What's interesting is that the company is not a cryptocurrency miner and does not operate an exchange. We are in the business of providing analytics and business intelligence solutions to enterprises.
However, the company's CEO, Michael Saylor, is incredibly bullish on cryptocurrencies, saying in a recent interview that Bitcoin is a better option than gold, offering all of its most attractive features without any drawbacks. He said he was prepared.
MicroStrategy owns over 214,000 Bitcoins, making it the largest corporate holder of the cryptocurrency. That means the exposure is significant.
Last year, the company took a $115.9 million impairment loss on digital assets. And the year before that, when Bitcoin's value was plummeting, total losses amounted to nearly $1.3. a billion.
The company turned a profit for the first time in 2023 thanks to $553.6 million in income tax benefits. Its core business remains unprofitable, and that's what matters to investors. MicroStrategy's fundamentals do not support its inflated valuation, which currently stands at more than 800 times expected future earnings.
Investors appear to be rushing into the stock due to the company's crypto holdings and the CEO's bullish outlook on Bitcoin. This stock is doing well as cryptocurrencies are doing well, but it could fall the most during a correction. MicroStrategy is a stock I would avoid.
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David Jagielski has no position in any stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Coinbase Global. The Motley Fool has a disclosure policy.
3 Crypto Stocks Up Over 500% Since 2023 Originally published by The Motley Fool
