The cryptocurrency sector continues to mature, attracting growing interest from both institutional and retail investors. For those looking to gain exposure to this dynamic market without directly purchasing digital assets, crypto-related stocks and upcoming Initial Public Offerings (IPOs) present a compelling opportunity. These companies leverage blockchain technology and hold significant cryptocurrency assets, positioning them at the intersection of traditional finance and digital innovation.
The approval of spot Bitcoin ETFs by the US SEC in January 2024 marked a pivotal moment, driving substantial interest in Bitcoin and other cryptocurrencies. This development brought digital assets one step closer to mainstream adoption. While cryptocurrencies themselves aren't traded on traditional stock exchanges, numerous publicly traded companies have significant exposure to the crypto market through various business activities.
Crypto-related stocks represent companies that, while not exclusively operating in the cryptocurrency sector, have substantial investments in digital assets or facilitate crypto transactions. This includes firms like PayPal and MicroStrategy, which hold significant cryptocurrency reserves, and platforms like Robinhood and SoFi Technologies that offer crypto trading alongside traditional financial instruments. Even companies like Nvidia and Tesla share correlations with the crypto market through their influence on associated cryptocurrencies or through their products' use in blockchain applications.
For traditional investors curious about cryptocurrency, upcoming IPOs of crypto-focused companies offer another avenue for exposure. An Initial Public Offering represents the process by which a private company becomes publicly traded by offering its shares to the public for the first time. These offerings serve as bridges for traditional investors to participate in the growth potential of blockchain technology without direct investment in digital assets.
Why Consider Crypto-Related Stocks and IPOs?
Investing in crypto-related stocks and IPOs allows participation in the financial upside of the cryptocurrency ecosystem while avoiding the complexities and security concerns associated with holding digital assets directly. Established publicly traded companies like PayPal and Block Inc. offer more traditional investment routes into the rapidly evolving crypto space. Their performance often correlates with crypto market trends, providing indirect exposure to the sector's volatility and growth potential.
This approach offers several advantages:
- Regulatory clarity: Publicly traded companies operate within established regulatory frameworks
- Familiar investment vehicles: Investors can use traditional brokerage accounts
- Reduced security concerns: No need to manage private keys or secure digital wallets
- Diversification: Many crypto-related companies have multiple revenue streams beyond cryptocurrency
Leading Crypto Stocks for Your Watchlist
For investors seeking exposure to the cryptocurrency market through traditional equity investments, these companies represent some of the most significant players with substantial crypto connections.
Robinhood Markets (HOOD)
Robinhood Markets went public on July 29, 2021, with a mission to democratize finance for all. The platform enables users to invest in stocks, ETFs, options, and cryptocurrencies. As of 2023, Robinhood reported revenue of $1.87 billion, reflecting significant growth from previous years despite reporting losses. The stock has demonstrated volatility, with a 52-week range between $7.91 and $19.42, indicating both risk and potential for growth as the company expands its cryptocurrency trading services.
The company has deeply embedded itself in cryptocurrency trading, allowing users to trade Bitcoin and other major digital assets. Robinhood's brand became nearly synonymous with crypto trading during the 2021 market surge. The company's performance, including its stock price, can be influenced by overall sentiment and fluctuations in the cryptocurrency market.
PayPal Holdings (PYPL)
PayPal established itself as a leader in digital payments since going public on February 15, 2002. As of 2023, the company reported revenue of $29.77 billion, marking an 8.19% increase from the previous year, with net earnings of $4.25 billion. The stock has experienced fluctuations within a 52-week range between $50.25 and $77.95, reflecting both market volatility and the impact of the company's strategic decisions.
PayPal allows users to buy, hold, and sell various cryptocurrencies directly through their accounts, creating a bridge between traditional finance and the crypto ecosystem. This extensive involvement in digital transactions, including cryptocurrency payments, closely ties PayPal's stock performance to broader dynamics in both online payments and cryptocurrency markets. The company strengthened its crypto connection further with the launch of its PayPal USD (PYUSD) stablecoin.
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Block Inc. (SQ)
Formerly known as Square, Block went public on November 19, 2015, and has evolved into a comprehensive financial services and technology firm. The company offers payment processing solutions, financial services through Cash App, and other products. As of early 2024, Block had a market capitalization of approximately $51.77 billion, demonstrating substantial growth in the financial technology sector. The stock has shown volatility with a 52-week range between $38.85 and $87.52.
Block maintains significant correlation with the cryptocurrency market primarily through its Cash App platform, which enables users to buy, sell, and transfer Bitcoin. The company has made strategic investments in Bitcoin, placing approximately 1% of its total assets into the cryptocurrency, demonstrating its belief in Bitcoin's long-term value and further tying its financial performance to crypto market fluctuations.
MicroStrategy Incorporated (MSTR)
MicroStrategy went public on June 11, 1998, and has gained recognition for its substantial Bitcoin investments. The company has a market capitalization of approximately $26.24 billion, with revenue of $496.26 million over the last twelve months. The stock has experienced significant price movements, with a 52-week range between $230.72 and $1,815.00, reflecting its aggressive cryptocurrency investment strategy.
MicroStrategy maintains a unique position in the market, combining enterprise analytics software services with a strong focus on Bitcoin accumulation. The company holds a significant amount of Bitcoin on its balance sheet, creating direct financial exposure that ties its stock performance closely to Bitcoin's price movements. This makes the company's financial health and stock price particularly reactive to cryptocurrency market volatility.
SoFi Technologies (SOFI)
SoFi Technologies became publicly traded through a merger with a special purpose acquisition company in June 2021. Founded in 2011, the company has expanded its financial products and services across the United States, Latin America, and Canada. SoFi operates through Lending, Technology Platform, and Financial Services segments, offering an integrated platform that enables members to borrow, save, spend, invest, and protect their money. In 2023, SoFi reported revenue of $2.12 billion, representing 34.91% growth compared to the previous year.
SoFi offers users the ability to trade cryptocurrencies alongside traditional investments. This inclusion of crypto trading services connects SoFi's market performance to the cryptocurrency space, as interest in and performance of crypto assets can influence user engagement and trading volumes on the platform.
Coinbase Global (COIN)
Coinbase began trading publicly through a direct listing on NASDAQ on April 14, 2021. The company has established itself as a leading platform in the financial infrastructure and technology sector for the crypto economy. It offers services for consumers to manage their crypto financial accounts, a marketplace for institutional crypto asset transactions, and tools for developers to build crypto products and accept digital assets as payment. As of recent data, Coinbase has a market capitalization of $62.24 billion.
Financially, Coinbase reported revenue of $3.11 billion over the trailing twelve months, with net income of $94.75 million. The stock has demonstrated significant volatility, with a 52-week price range between $46.43 and $276.38. As a dedicated cryptocurrency exchange, Coinbase's performance directly correlates with the cryptocurrency market, with revenue significantly influenced by trading volumes and overall crypto market health.
Marathon Digital Holdings (MARA)
Marathon Digital Holdings, incorporated in 2010 and headquartered in Florida, is a significant player in the digital asset technology sector, focusing primarily on mining Bitcoin in the United States. The company is one of North America's largest and most sustainably operated Bitcoin miners, converting energy into economic value by processing Bitcoin transactions, generating newly minted Bitcoins, and maintaining Bitcoin's distributed ledger.
The company's performance is inherently linked to the cryptocurrency market, especially Bitcoin's price, as mining profitability directly correlates with the value of mined cryptocurrency. Recent strategic moves include acquiring a 200-megawatt Bitcoin mining data center adjacent to a wind farm, aiming to significantly expand mining operations.
Tesla Inc. (TSLA)
Tesla went public on June 29, 2010, and has grown significantly beyond electric vehicles to include energy generation and storage systems. As of 2023, Tesla reported revenue of $96.77 billion, an 18.80% increase from the previous year. The stock has shown substantial growth and volatility over the years, reflecting dynamic market conditions and investor sentiment toward green technology.
Tesla has made investments in Bitcoin and previously accepted it as payment for products, though the company has shown willingness to reverse this decision based on environmental concerns related to Bitcoin mining. These actions indicate a connection between Tesla's financial strategies and the cryptocurrency market, albeit more indirect than companies like Coinbase or MicroStrategy.
NVIDIA Corporation (NVDA)
NVIDIA launched its IPO on January 22, 1999, and has become a leader in graphics processing units (GPUs) for gaming, professional markets, and system on a chip units for mobile computing and automotive markets. The company reported remarkable growth with revenue reaching $60.92 billion in 2023, a 125.85% increase compared to the previous year. Earnings surged to $29.76 billion, reflecting 581.32% growth.
NVIDIA produces GPUs that are widely used in cryptocurrency mining operations. While the company's business model extends beyond crypto, demand for its GPUs for mining has at times been influenced by the cryptocurrency market, creating a connection between NVIDIA's performance and crypto market health. The company's stock performance also closely impacts the AI sector of the crypto market due to its technological advancements.
Metaplanet Inc.
Metaplanet initially focused on budget hotel management but has shifted toward Web3 space development and decentralized internet initiatives. The company has made significant Bitcoin investments, allocating over $6 million with assistance from cryptocurrency industry leaders. This strategy aims to reduce reliance on the Japanese yen, which has faced challenges due to Japan's prolonged period of low interest rates.
Following their Bitcoin investment announcement, Metaplanet's stock price increased by nearly 90%, indicating strong investor interest in businesses embracing cryptocurrency. This approach mirrors MicroStrategy's strategy and provides Japanese investors with a tax-efficient method to engage with the cryptocurrency market given the country's strict regulations on crypto earnings.
Anticipated Crypto IPOs on the Horizon
Beyond established crypto stocks, several upcoming Initial Public Offerings present additional opportunities for investors seeking exposure to the cryptocurrency market through traditional equity investments.
Reddit's IPO saw the company and its executives selling 22 million shares at $34 each, reaching a market valuation of $5.4 billion. This represented a decrease from the company's $10 billion valuation in 2021. Reddit's correlation with the crypto market is highlighted by its plans to expand platform functionalities and incorporate cryptocurrencies like Bitcoin, Ether, and Polygon as payment methods.
The company's Community Points system, including tokens like MOON and BRICK, has drawn significant attention. These ERC-20 tokens reward users for community contributions and can be traded, used for subreddit memberships, or utilized in governance polls. This innovative application of blockchain technology for fostering online community engagement has generated substantial interest among investors.
Telegram
Telegram's anticipated IPO has generated considerable interest, with the company reportedly planning to go public within the next two years. This move is closely watched by the crypto market due to Telegram's connection to blockchain through Toncoin (TON). The company is contemplating an IPO with a potential valuation between $30-50 billion, considering direct listing on major exchanges.
Telegram's endorsement of the Ton Network has significantly impacted TON's value, with market capitalization rising substantially in short periods. This relationship underscores the platform's ambition to transform from a messaging app into a major player in the technological landscape, incorporating advanced features like AI-based chatbots.
Bitkub
Thailand's leading cryptocurrency exchange, Bitkub Online, is preparing for an initial public offering in 2025. The company hinted at going public in a 2023 shareholder letter without specifying a timeframe. Bitkub Capital is currently hiring financial advisors for the IPO process, which is expected to value Bitkub Online at approximately $165 million.
This decision comes amid growing demand for crypto trading in Thailand, with active accounts reaching new highs. However, Bitkub faces competition from other exchanges and regulatory challenges following previous acquisition deal complications and allegations of trading volume manipulation.
Circle
Circle, the company behind USDC stablecoin, has confidentially filed for an IPO. USDC is pegged to the U.S. dollar and plays a significant role in the cryptocurrency ecosystem as a stable medium of exchange and store of value. With a market capitalization of approximately $31.81 billion, USDC demonstrates substantial impact and widespread adoption within crypto markets.
Circle previously attempted to go public via a special purpose acquisition company merger valued at around $9 billion, but abandoned those plans. The company filed a confidential draft S-1 document with the US SEC in January 2024, indicating interest in selling shares to the public. Circle's IPO could potentially occur following SEC review, though the timeline remains uncertain.
Blockchain.com
Blockchain.com, a significant player in cryptocurrency exchange and block explorer services, is reportedly interviewing banks for a potential IPO. The company achieved a valuation of $14 billion in its latest Series D funding round. This move toward public listing underscores Blockchain.com's substantial growth and central role in the cryptocurrency ecosystem.
The company offers one of the first Bitcoin block explorers and a widely used crypto wallet, with over 82 million wallets created, 37 million verified users, and more than $1 trillion in processed transactions. Blockchain.com's co-founder mentioned the company's interest in going public but stated it would proceed only when market conditions are conducive.
Evaluating Crypto-Related Stocks and IPOs
Assessing crypto-related stocks and IPOs requires a multifaceted approach similar to evaluating traditional investments, with additional considerations for the unique characteristics of the cryptocurrency and blockchain sectors.
Business Model Analysis: Understand how the company generates revenue, its primary products or services, and its position within the broader cryptocurrency ecosystem. Evaluate what distinguishes its technology or services and the size and demand of its target market.
Management and Regulatory Assessment: Examine the experience and track record of the management team in both crypto and traditional industries. Consider the regulatory environment in countries where the company operates, as this significantly impacts its ability to scale and operate efficiently.
Financial Health Review: Analyze available financial statements to assess the company's growth, profitability, and financial stability. Compare its valuation with financial health and growth prospects, and evaluate competitive advantages relative to existing and new market entrants.
Technology and Security Evaluation: Investigate the company's technological foundation, focusing on innovation, security measures, and any history of breaches or vulnerabilities. The presence of strategic partnerships and a vibrant ecosystem can indicate credibility and growth potential.
Market Sentiment Consideration: Pay attention to market sentiment and company momentum, which can influence short-term investment returns. Consider how investing in the company fits within your broader investment strategy, emphasizing diversification and risk management in the volatile crypto market.
Always conduct thorough research and consider consulting with a financial advisor before making investment decisions in the cryptocurrency and blockchain sectors.
Frequently Asked Questions
What are crypto-related stocks?
Crypto-related stocks represent companies that have significant exposure to cryptocurrency markets through various business activities. This includes companies that hold digital assets on their balance sheets, facilitate cryptocurrency transactions, provide trading platforms, or supply technology used in blockchain applications. These stocks offer indirect exposure to cryptocurrency markets through traditional equity investments.
How do crypto IPOs differ from traditional IPOs?
Crypto IPOs involve companies operating primarily in the blockchain and digital asset space, while traditional IPOs typically represent companies in established industries. Crypto IPOs may face additional regulatory scrutiny and market volatility due to the emerging nature of the industry. They also often attract investors specifically interested in cryptocurrency exposure through public markets.
What risks are associated with crypto stocks?
Crypto stocks face market volatility correlated with cryptocurrency prices, regulatory uncertainty as governments develop frameworks for digital assets, technological risks related to blockchain development, and competition from both traditional financial institutions and emerging crypto-native companies. These stocks may experience significant price swings based on cryptocurrency market sentiment.
How can I evaluate a crypto company's potential?
Evaluate management team experience in both technology and finance, examine the company's technological infrastructure and security measures, analyze their position within the competitive landscape, review financial statements for revenue diversity and sustainability, and assess regulatory compliance across operating jurisdictions. Also consider adoption metrics and partnership networks.
Should I invest in crypto stocks or direct cryptocurrency?
The choice depends on your investment goals, risk tolerance, and comfort with different asset types. Crypto stocks offer exposure through regulated traditional markets with company financials and management oversight, while direct cryptocurrency investment provides pure exposure to digital assets without corporate intermediate risks. Many investors choose to diversify across both approaches.
What role do stablecoins play in crypto companies?
Stablecoins provide price stability within volatile cryptocurrency markets, serving as trading pairs on exchanges, facilitating transactions, and offering storage of value during market downturns. For crypto companies, stablecoins can enhance liquidity, enable efficient operations, and provide services that bridge traditional finance with digital assets through products like yield generation and payment systems.
Conclusion
Crypto-related stocks and upcoming IPOs present compelling opportunities for investors seeking exposure to the cryptocurrency and blockchain industry through traditional investment vehicles. By carefully selecting stocks of companies with strategic investments in the crypto space or considering participation in IPOs of emerging firms, investors can potentially capture growth in this evolving market. However, thorough due diligence, clear understanding of each company's crypto-related activities, and cautious risk management approach remain essential for navigating this dynamic investment landscape.
The intersection of traditional finance and cryptocurrency continues to develop, with established companies increasing their crypto exposure and new companies emerging to serve growing market demand. As regulatory frameworks evolve and technology advances, the relationship between public markets and digital assets will likely continue to strengthen, creating additional opportunities for investors seeking balanced exposure to this transformative technology.