The world of digital assets is one that’s grown in prominence in recent years. A decade ago, most investors couldn’t really describe a cryptocurrency or non-fungible token (NFT). However, it’s a completely different game now. The rise of digital assets during this past bull market changed the game for growth investors, many of whom profited in a big way from the growth of these nascent assets.
Moving froward, the question is whether these particular digital assets are better bets than the infrastructure supporting this sector. Indeed, it’s my view that certain crypto-adjacent companies may be better-positioned to provide more stable growth over time than the underlying assets themselves.
Keeping this in mind, let’s take a look at three digital asset stocks worth adding to the watch list now.
Coinbase (COIN)
Despite a significant 2022 sell-off, Coinbase (NASDAQ:COIN) stock surged by 180% this year, remaining below its previous highs. Trading 73% lower than its 2021 all-time high, Coinbase still offers a rebound opportunity, given the distance it will take to regain its previous highs.
In Q2, the second-largest crypto exchange earned $707.9 million in total revenues, a decline from the prior quarter’s $772.5 million and the year-ago $808.3 million. Despite a $97 million net loss, an adjusted EBITDA of $194 million emerged. Analyst estimates varied, yet the results have brought relief to crypto bulls and shareholders.
For those bullish on the ability of centralized exchanges to grow, Coinbase remains the top pick in this regard. If crypto trading volumes pick up, this company will undoubtedly be the biggest beneficiary of such a catalyst.
Marathon Digital Holdings (MARA)
Marathon Digital (NASDAQ:MARA) is a well-known cryptocurrency mining company currently trading on the Nasdaq exchange. While intriguing, it’s a long-term play with risks and potential rewards. Let’s delve into the details of this notable Bitcoin (BTC-USD) miner.
MARA stock has corrected from its recent high to below $14, and with significant short interest, a reversal rally is possible. Despite Q2 revenue and earnings miss, Marathon’s operational hash rate is 17.7EH/s, growing to 21.8EH/s, indicating positive mining capacity growth and a promising outlook.
For those seeking a crypto-related investment without a spot Bitcoin ETF, consider Marathon Digital. Do your research, monitor news, and be cautious due to associated risks. MARA stock provides investors with indirect exposure to Bitcoin prices, so volatility may remain high. That said, those bullish on where Bitcoin will trade a few years down the road may have greater upside with MARA, given this leveraged relationship.
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) is a top choice for investing in Bitcoin mining, especially after a recent 40% correction. The stock’s appeal is boosted by its robust balance sheet, with no debt and $510 million in cash and digital assets by Q2 2023, ensuring flexibility for expansion.
By Q2 2023, Riot had a mining capacity of 10.7EH/s, marking a 143% year-over-year increase. Notably, capacity is set to further surge due to a June miner purchase agreement. This move aims to reach 20.1EH/s by mid-2024 and potentially expand to 35.4EH/s by the end of next year. Despite halving-related mining challenges, a potential cryptocurrency surge could counterbalance. Riot’s aggressive mining capacity expansion plans contribute to a positive outlook.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
