Are you holding on to the four most profitable crypto concept stocks in 2023?

With frequent good news, crypto stock trading has entered a feverish stage.

Written by: Mary Liu, BitpushNews

For cryptocurrency bulls, the money-making bets in 2023 are crypto/blockchain stocks.

While Bitcoin is up more than 150% for the year, stocks closely related to cryptocurrencies have performed better, with Marathon Digital, Coinbase, MicroStrategy and Grayscale Bitcoin Trust (GBTC) all rising more than 300% in 2023. Among them, Bitcoin mining company Marathon Digital has increased nearly 8 times since the beginning of the year.

According to FactSet data, these four crypto concept stocks are among the eight best-performing stocks among U.S. listed companies with a market value of at least $5 billion, with Marathon ranking first.

The regulatory haze dissipated, and expectations of Federal Reserve interest rate cuts created a more attractive reason for risky assets. In November 2022, the cryptocurrency exchange FTX fell into bankruptcy, a series of hedge fund failures, crypto lenders collapsed, and miners suffered heavy losses. FTX founder Sam Bankman-Fried was arrested on fraud charges. Last month, a New York jury found SBF guilty of seven criminal counts, with the 31-year-old former billionaire facing a possible life sentence, weeks after Binance founder Changpeng Zhao pleaded guilty and resigned as the company’s CEO.

The upcoming Bitcoin halving and spot Bitcoin ETFs also boosted prices. Galaxy Digital CEO Michael Novogratz said in an interview with CNBC’s “Squawk Box” last week: “There are frequent good news, and crypto stock trading has entered a feverish stage.”

Marathon “Nirvana Rebirth”

This time last year, Marathon’s business was in jeopardy. The company ended the quarter with a loss of nearly $400 million on sales of just $28.4 million, amid plummeting Bitcoin prices, a Montana factory outage and Marathon’s financial exposure to bankrupt miner Compute North.

“It was a very difficult time,” Marathon Digital CEO Fred Thiel said in an interview last week. “Bitcoin mining was a business with a high upfront investment because of the high energy costs required to run supercomputers.”

Thiel said the company was able to sell equity and is fortunate to have no debt other than the convertible notes.

Things are significantly better in 2023. Last month, Marathon reported third-quarter net profit of $64.1 million, with revenue jumping to $97.8 million from the same period a year earlier. Currently in expansion mode, the company last week announced a $178.6 million purchase of its first two fully owned Bitcoin mining farms, one in Texas and one in Nebraska. These acquisitions bring Marathon’s mining investments to The portfolio size increased by 56%, with capacity reaching 910 MW.

Thiel said: "With vertical integration, we can take away the profits of the third party and run the website the way we want. Most of the technology the company has been developing is focused on improving efficiency. In the high-end market, people tend to ignore this. A little bit, because high prices bring high profits”.

Thiel wants to ensure that the company maintains good cash flow the next time Bitcoin prices drop, and he also believes that through energy recovery and reuse, such as converting methane into marketable electricity, the company will eventually have a more diversified revenue stream.

Thiel said one of the company’s goals is to reduce Bitcoin mining to 50% of revenue by 2028.

Coinbase “Multiple Income Streams”

Outside of the mining sector, the best-performing U.S. crypto stock this year is Coinbase, which has soared 450% year-to-date.

As the only publicly traded crypto exchange in the U.S., Coinbase has long been the go-to place for buying and trading cryptocurrencies in the U.S., but amid regulatory woes for the world’s largest exchange Binance, Coinbase has struggled to gain traction, according to a late-November report from research firm Kaiko. Market share increased during non-U.S. trading sessions.

Coinbase’s revenue and stock price are still well below levels seen during the height of the crypto bull market in 2021, but its business has stabilized following significant cost-cutting measures that began last year and continued into early 2023.

Coinbase also offers investors options beyond crypto buying and selling. In the third quarter, Bitcoin accounted for just 37% of Coinbase’s trading revenue, while Ethereum accounted for 18% and other crypto assets accounted for 46%. Additionally, interest income and stablecoin revenue (earned through USDC reserves) more than doubled to $212 million in the latest quarter due to rising interest rates.

Currently, trading revenue accounts for less than half of Coinbase’s net revenue, down from 96% at the time of the company’s 2021 IPO.

Coinbase CEO Brian Armstrong said: “We made a huge effort when we went public and started to diversify our revenue. Now we have multiple revenue streams, some of which perform well in a high interest rate environment, and some of which do better in a low interest rate environment. This It means income is starting to become more predictable.”

Grayscale Bitcoin Trust

Grayscale Bitcoin Trust (GBTC) is up 330% this year. GBTC entered the over-the-counter market in 2015 and became the first publicly traded Bitcoin fund in the United States, providing investors with a way to passively hold Bitcoin. The challenge investors have faced in the past is that GBTC is a closed-end fund, which makes it less liquid than ETFs.

During the bear market late last year, GBTC traded at a negative premium of nearly 50% to its NAV, meaning its market capitalization was roughly half the value of the Bitcoin it owned. As of December 22, this discount has narrowed to 5.6%, the lowest level since early 2021. The fund currently owns approximately $26.6 billion worth of Bitcoin, with a market capitalization of $24.7 billion.

In addition to Bitcoin’s rise this year, GBTC has also been boosted by the prospect of obtaining an SEC license to convert to an ETF next year, a move that will allow it to trade through traditional stock exchanges and obtain liquidity measures that will make its market Value is more consistent with its NAV.

Grayscale CEO Michael Sonnenshein said on CNBC’s “Squawk Box” last week that ETF approval would bring in new players, most notably investment advisers who manage about $30 trillion in the U.S. funds.

“When my team won in court, I think it certainly sparked investor optimism about GBTC and its prospects for listing as a spot Bitcoin ETF,” Sonnenshein said. “As we enter the new year, I know the investment community is very concerned about this."

Bitcoin “Giant” MicroStrategy

Many investors choose MicroStrategy as a way to hold Bitcoin.

MicroStrategy is a business intelligence software company founded in 1989. The company’s stock has risen 360% this year, with a market value of $8.3 billion.

As of the end of November, the company owned 174,530 Bitcoins, currently worth $7.4 billion, and on Wednesday it said in a regulatory filing that it had $615.7 million from November 30 to December 26. It added another 14,620 Bitcoins, bringing its total holdings to 189,150.

In mid-December, BTIG analysts raised MicroStrategy’s price target from $560 to $690, citing improving sentiment and the impending Bitcoin halving.

Phong Le, who was promoted from CFO to CEO last year, said during an October 2020 earnings call that MicroStrategy’s investment in Bitcoin allowed it to “tap into the enthusiasm of the broader cryptocurrency market,” adding, "We Having seen significant growth, our investment in Bitcoin has had unexpected benefits in improving the company’s profile.”

Galaxy Digital CEO Mike Novogratz expects Bitcoin to break all-time highs next year. He made an optimistic comment saying: “Overall, we are still in the bull market phase.”