10 Most Profitable Cryptocurrency Stocks

In this article, we will be taking a look at the 10 most profitable cryptocurrency stocks.

The crypto market saw a prolonged decrease in the prices of cryptocurrencies following 2021, which has been termed the ‘Crypto winter’. However, despite reaching a bottom in 2022, cryptocurrencies have seen a major rally in 2023. Between the start of 2023 and March 1st, Bitcoin is 40.1% higher while Ethereum is 35.3% higher. Furthermore, compared to its low in November, Bitcoin has risen by more than 53%. Yet, despite a strong correlation between crypto-exposed stocks and bitcoin, a number of crypto-exposed stocks including Marathon Digital Holdings, Inc. (NASDAQ:MARA), Riot Platforms, Inc. (NASDAQ:RIOT), and CleanSpark, Inc. (NASDAQ:CLSK) were in the red and analysts attribute this to bitcoin’s weakened relationship with the stock market compared to previous years.

The crypto market is also seeing a regulatory crackdown. According to a report by the Wall Street Journal, the Securities and Exchange Commission has been investigating violations of investor-protection laws by different currencies. The SEC has already reduced the power of some middlemen offering lending services for cryptocurrencies. Coinbase Global Inc (NASDAQ:COIN), is one of the companies that has disclosed being investigated by the SEC, and Forbes predicts these will make it harder for crypto exchanges to keep customers’ crypto assets secure.

Despite this, some crypto markets still have long-term growth potential. According to Blaxberg, when Bitcoin hits $25,000 as forecasted, it will be a major psychological boost for crypto investors. According to the Coin Telegraph, venture capitalist firms also poured investments worth $14.2 billion in the first half of 2022. While the rate of investments slowed down in the second half of 2022 due to the crypto winter, analysts predict them to increase again as the values of cryptocurrencies resurge.

With the rise of the digital realm, which was further boosted by the Covid-19 pandemic, investing in the digital space seems to have enormous potential. Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL) are all companies that have invested heavily in the crypto market.

Photo by Austin Distel on Unsplash

Let’s now take a look at the 10 most profitable cryptocurrency stocks.

Our Methodology

For our shortlisting, we looked at all the major cryptocurrency companies in the world by market capitalization and revenue. Following that, we looked at the net income for the trailing twelve months for all these companies, and the top ten companies were selected. They are ranked on the basis of this income, from the lowest to the highest net income (TTM). We have also used Insider Monkey’s hedge fund data for the fourth quarter, when we tracked 943 hedge funds, to demonstrate the popularity of these stocks among elite funds.

10 Most Profitable Cryptocurrency Stocks

10. Coinbase Global Inc (NASDAQ:COIN)

Trailing Twelve Months Net Income: -$2.6 billion

Number of Hedge Fund Holders: 27

Coinbase Global Inc (NASDAQ:COIN) is a financial exchanges and data company based in Wilmington, Delaware. The company provides financial infrastructure and technology for the American and international crypto-economy.

Oppenheimer’s Owen Lau holds an Outperform rating and an $84 price target on Coinbase Global Inc (NASDAQ:COIN) shares as of February 22.

Being one of the largest pure-play crypto companies today, Coinbase Global Inc (NASDAQ:COIN) holds about $153 million in Bitcoin as of this March, according to CoinGecko. The company has significantly suffered from the recent crypto winter, but it is still one of Wall Street’s favorite crypto stocks today. The average analyst price target on Coinbase Global Inc (NASDAQ:COIN) shares as of March 4 is $59.10, with a high forecast of $100. This shows the potential of the company as the crypto-economy continues to be on the mend.

Coinbase Global Inc (NASDAQ:COIN) was found among the 13F holdings of 27 hedge funds in the fourth quarter. Their total stake value was $575 million. ARK Investment Management was the largest shareholder in the company, holding 9.2 million shares.

Coinbase Global Inc (NASDAQ:COIN), like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL) is a company set to revolutionize the digital currency sector.

9. MicroStrategy Incorporated (NASDAQ:MSTR)

Trailing Twelve Months Net Income: -$1.5 billion

Number of Hedge Fund Holders: 18

MicroStrategy Incorporated (NASDAQ:MSTR) is an application software company based in Tysons Corner, Virginia. It owns the largest amount of Bitcoin on its balance sheet, valuing up to $2.2 billion as of this March.

Joseph Vafi at Canaccord holds a Buy rating on MicroStrategy Incorporated (NASDAQ:MSTR) shares as of February 3. The analyst also raised his price target on the stock from $372 to $400.

The co-founder of MicroStrategy Incorporated (NASDAQ:MSTR), Michael Saylor, is among the most bullish Bitcoin investors today. As a result, the company has added to its Bitcoin stake through 2022, ensuring that when the cryptocurrency shoots back up, MicroStrategy Incorporated (NASDAQ:MSTR) will be among the biggest benefactors of the rise. Analysts have an average price target of $255 on the stock, and foresee a 3.28% upside on the company’s shares.

Our hedge fund data for the fourth quarter shows 18 funds long MicroStrategy Incorporated (NASDAQ:MSTR), with a total stake value of $49.6 million.

Investment management company Bireme Capital mentioned MicroStrategy Incorporated (NASDAQ:MSTR) in its second-quarter 2022 investor letter. Here’s what the firm said:

“We also remain short MicroStrategy, a middling business analytics software company that turned itself into a gigantic levered bet on Bitcoin at the height of the hype cycle – losing over a billion dollars in the process. Now, the company will need all the cash flow from the business just to pay off the interest payments on the enormous debt load, leaving no earnings for equity holders. Despite shares down over 60% for the year, the company continues to trade at a material premium to the value of its assets. For more detail on our thesis, please see our blog post here, as well as the Forbes and Fortune write-ups that feature our short position.”

8. Block, Inc. (NYSE:SQ)

Trailing Twelve Months Net Income: -$540.7 million

Number of Hedge Fund Holders: 70

Block, Inc. (NYSE:SQ) is a data processing and outsourced services company based in San Francisco, California. It is heavily involved in the crypto sector, operating an online digital and mobile payment platform for consumers and merchants.

Baird analyst Daving Koning reiterated an Outperform rating and $92 price target on Block, Inc. (NYSE:SQ) shares on March 1.

In the third quarter, Block, Inc. (NYSE:SQ) had about $1.76 billion in Bitcoin revenue in its Cash App unit. The company itself is also heavily invested in this cryptocurrency, holding about $136 million in Bitcoin as of this March. Analysts are highly bullish on the stock’s potential as the crypto winter thaws, holding an average price target on Block, Inc. (NYSE:SQ) of $97.35. Wall Street foresees an upside potential of 20.36% on the company’s shares as of March 4.

There were 70 hedge funds long Block, Inc. (NYSE:SQ) in the fourth quarter. Their total stake value was $4.3 billion. ARK Investment Management was the largest shareholder in this company as well, holding over 9 million shares.

7. Riot Platforms, Inc. (NASDAQ:RIOT)

Trailing Twelve Months Net Income: -$373.2 million

Number of Hedge Fund Holders: 12

Riot Platforms, Inc. (NASDAQ:RIOT) is an application software company based in Castle Rock, Colorado. The company is engaged in bitcoin mining operations in North America.

On February 21, Needham’s John Todaro initiated coverage of Riot Platforms, Inc. (NASDAQ:RIOT) shares with a Buy rating.

Wall Street analysts see an upside potential of 51.42% on Riot Platforms, Inc. (NASDAQ:RIOT) shares as of March 4. The average price target on the stock is $9.6, with a high forecast of $12. The company can profit immensely from the recovery of Bitcoin, as it holds about 6,897 BTC holdings as of this January, which translated to about $117 million in liquidity at the time. Analysts thus see Riot Platforms, Inc. (NASDAQ:RIOT) outperforming to the upside because of its heavy investing in Bitcoin.

Out of the 943 hedge funds tracked by Insider Monkey in the fourth quarter, 12 hedge funds were long Riot Platforms, Inc. (NASDAQ:RIOT), with a total stake value of $9.7 million.

6. Marathon Digital Holdings, Inc. (NASDAQ:MARA)

Trailing Twelve Months Net Income: -$268.5 million

Number of Hedge Fund Holders: 14

Marathon Digital Holdings, Inc. (NASDAQ:MARA) is a digital asset company based in Las Vegas, Nevada. The company focuses on the blockchain ecosystem and the generation of digital assets in the US.

A Buy rating was reiterated on Marathon Digital Holdings, Inc. (NASDAQ:MARA) shares on January 12 by analyst Christopher Brendler at DA Davidson.

As of the third quarter, Marathon Digital Holdings, Inc. (NASDAQ:MARA) had about 69,000 active miners of Bitcoin. It holds about 10,054 Bitcoins as of this March, worth $171 million. The company has reported that mining a single Bitcoin costs about $6,200, which represents the potential profitability of Marathon Digital Holdings, Inc.’s (NASDAQ:MARA) business.

Marathon Digital Holdings, Inc. (NASDAQ:MARA) had 14 hedge funds long its stock in the fourth quarter. Their total stake value was $7.4 million.

Horizon Kinetics LLC, an independently owned and operated investment adviser, mentioned Marathon Digital Holdings, Inc. (NASDAQ:MARA) in its first-quarter 2022 investor letter. Here’s what the firm said:

“Investors also tend to not give sufficient credit to the power of management to enhance or create additional value with such an asset. The commercialization of land requires considerable management expertise. This particular transaction involves two other parties that will build and operate up to 60 megawatts of bitcoin mining, which was stated could accommodate up to 2.0 Exahash of operational capacity. That is quite sizable. As a reference point, Marathon Digital Holdings (NASDAQ:MARA), which has a $1.0 billion stock market value, even after a year-to-date decline of 70%, had about 3.6 EH/s of capacity at year-end 2021, though it expects to reach 13.3 EH/s during this calendar year. The TPL venture is expected to begin operations in the fourth quarter of this year.”

Marathon Digital Holdings, Inc. (NASDAQ:MARA), like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL) is trying to capitalize on the potential of cryptocurrency.

5. Canaan Inc. (NASDAQ:CAN)

Trailing Twelve Months Net Income: $331 million

Number of Hedge Fund Holders: 6

Canaan Inc. (NASDAQ:CAN) is a technology hardware, storage, and peripherals production company that works on integrated circuit (IC) mining equipment products and related components in China. The company also works with Northern Data AG in the fields of AI development, blockchain technology, and data center operations. In October 2022 it launched its next-generation bitcoin mining machine, the Avalon Made A13 series, and sales of its AI mining chips have seen a steady rise in past years.

In its third-quarter report for 2022, Canaan Inc. (NASDAQ:CAN) generated a revenue of $137.5 million. Furthermore, the price of bitcoin has started to recover and analysts predict that if this recovery continues, Canaan Inc. (NASDAQ:CAN) will show meaningful improvement. As of the end of the third quarter of 2022, the company had 535.5 Bitcoins left and a generous cash equivalent of $281.5 million that can act as a positive catalyst in the long term.

Six hedge funds were long Canaan Inc. (NASDAQ:CAN) in the fourth quarter. Their total stake value was $5.1 million.

4. Paypal Holdings, Inc. (NASDAQ:PYPL)

Trailing Twelve Months Net Income: $2.4 billion

Number of Hedge Fund Holders: 115

Paypal Holdings, Inc. (NASDAQ:PYPL) is a data processing and outsourced services company that operates its own digital transactions platform and is based in California, United States. The company spans around 200 markets and 150 currencies.

BMO Capital’s James Fotheringham holds an Outperform rating on Paypal Holdings, Inc. (NASDAQ:PYPL) shares as of February 13.

The company’s normalized earnings per share saw a 15% quarter-on-quarter growth in the last quarter of 2022 and its bottom lines were 3% to 4% above the market’s consensus EPS and expected earnings estimate for the quarter. The overall year of 2022 also saw an 8.5% growth in revenue as compared to 2021 while the total payment volume increased from $1.25 trillion in the fiscal year 2021 to $1.36 trillion in the fiscal year 2022 with this trend expected to continue.

A total of 115 hedge funds were long Paypal Holdings, Inc. (NASDAQ:PYPL) in the fourth quarter, with a total stake value of $5.1 billion.

RiverPark Advisors, an investment advisory firm, mentioned Paypal Holdings, Inc. (NASDAQ:PYPL) in its fourth-quarter 2022 investor letter. Here’s what the firm said:

“PayPal Holdings, Inc. (NASDAQ:PYPL)l: PayPal shares were a top detractor for 4Q, reporting slightly weaker than expected 3Q payment volumes and 4Q payment volume guidance. The company nevertheless reported betterthan-expected EPS on improved margins. PYPL operates at significantly lower margins than its payment competitors Visa and Mastercard, and 3Q results and 4Q guidance show early improvements in its margins and ability to drive higher cash flow growth in the near term. For 3Q, PYPL reported $1.8 billion of FCF, the highest quarterly FCF number in its history, representing 37% growth. The company expects continued operating margin expansion for 4Q and full year FCF of more than $5 billion, representing a 6% FCF yield.

PayPal is the most accepted digital wallet – with almost triple the acceptance of Apple Pay, the number two digital wallet. PayPal is a key beneficiary of the ongoing shift to ecommerce driven digital payments, as well as consumer-to-consumer payment trends through its Venmo peer-topeer (P2P) payment service. With a 3Q non-GAAP operating margin of 22%, PYPL also has significant margin expansion potential given that competitors Adyen, Visa and Mastercard have 50%-65% operating margins. We believe the combination of secular growth, expanding operating leverage and the strategic use of the company’s significant and growing cash balance should fuel high teens earnings growth over the next five years. This, to us, presents an excellent risk/reward given that PYPL trades at a below market multiple.”

3. CME Group Inc. (NASDAQ:CME)

Trailing Twelve Months Net Income: $2.7 billion

Number of Hedge Fund Holders: 58

CME Group Inc. (NASDAQ:CME) is a financial exchanges and data company that operates markets for the trading of futures and options on futures contracts globally. The company also provides cleared swaps products and services in trade processing, mitigation, and data. It is headquartered in Illinois, United States.

Brian Bedell at Deutsche Bank holds a Buy rating CME Group Inc. (NASDAQ:CME) on shares as of February 9.

CME Group Inc.’s (NASDAQ:CME) key driver is its interest rate derivatives products where it dominates the market in the exchange trading of these derivatives. The company had a 10% jump in its quarterly dividend to $1.10 per share per quarter which is a 2.4% dividend yield and had a full-year dividend yield of 4.6% in 2022. The annual volume of contracts rose by 19% in 2022 to an average of 23.3 million average daily volume and an expected free cash flow yield of 5.0% in 2023.

There were 58 hedge funds long CME Group Inc. (NASDAQ:CME) in the fourth quarter. Their total stake value was $3.2 billion.

Baron Funds, an investment management company, mentioned CME Group Inc. (NASDAQ:CME) in its third-quarter 2022 investor letter. Here’s what the firm said:

“CME Group Inc. (NASDAQ:CME) operates the world’s largest and most diversified derivatives marketplace. Shares fell 13% during the quarter (despite reporting strong average daily trading volume growth of 26% year-over year) due to concerns that EPS growth will slow in 2023 as the rate hike cycle comes to an end. We continue to own the stock due to CME’s strong competitive moats, its product breadth and liquidity depth, its durable growth characteristics driven by the secular shift from uncleared over-the-counter trading to exchange-traded futures, and tailwinds from the rising rate environment.”

2. Mastercard Incorporated (NYSE:MA)

Trailing Twelve Months Net Income: $9.9 billion

Number of Hedge Fund Holders: 139

Mastercard Incorporated (NYSE:MA) is a data processing and outsourced services company that provides services in transaction processing and other payment-related services. The company also offers analytics, consulting, managed services, payment gateway solutions, and processing for e-commerce companies, leveraging the digital economy and the rise in digital transactions.

On January 30, Mizuho analyst Dan Dolev maintained a Buy rating on Mastercard Incorporated (NYSE:MA) and raised the price target on the company from $380 to $405.

The company has a 23.7% market share in credit card networks according to 2021 data and is the dominant shareholder in markets such as Sweden and the Netherlands where it had a market share of 70% and 88% respectively. With the global payments market forecasted to reach $3.1 trillion by 2031, Mastercard Incorporated (NYSE:MA) is expected to continue expanding. It had a strong fourth quarter in 2022, with a net revenue that beat analyst expectations by $23.8 million which was a year-over-year growth of 11.52%. Recently, the company released a crypto-backed payment card in a collaboration with Nexo to enable the real-time use of digital currency for consumers in everyday transactions.

As of the fourth quarter, 139 out of 943 hedge funds surveyed by Insider Monkey held shares in Mastercard Incorporated (NYSE:MA). Their total stake value was $15.7 billion.

Here is what RiverPark Advisors specifically said about Mastercard Incorporated (NASDAQ:MA) in its fourth-quarter 2022 investor letter:

“Mastercard Incorporated (NYSE:MA): On strong 3Q results, MA was our final top contributor for the quarter. Third quarter revenue grew 15% (23% on a currency neutral basis), while cross-border volumes (the key metric for travel) grew 44%. The company also reported strong expense discipline, which led to a 100-basis point improvement in operating margin (200 basis points currency neutral). EPS for the quarter was up 13% year over year (22% currency neutral), which was better than expected.

We believe that the long-term secular growth trend towards digital payments has been further enhanced by the COVID crisis. The growth in debit cards, contactless payments, e-commerce, and buy-now-pay-later (BNPL) are all driving digital payment penetration.”

1. Visa Inc. (NYSE:V)

Trailing Twelve Months Net Income: $15.2 billion

Number of Hedge Fund Holders: 177

Visa Inc. (NYSE:V) is a payment technology company providing transaction processing services across the globe and is based in California, United States. The company operates VisaNet which enables authorization, clearing, and payment transactions along with products such as credit and debit cards. It has created partnerships with over 60 crypto companies including Coinbase Gloval, Inc. (NASDAQ:COIN) to release its own crypto cards using which consumers can use to spend their cryptocurrency directly.

Dan Dolev, a Mizuho analyst, maintained the firm’s Neutral rating on Visa Inc. (NYSE:V) on January 30 and raised the price target for the company from $240 to $220.

The company exceeded predictions of both revenue and adjusted earnings growth in the first fiscal quarter of 2023. It saw a net revenue of $7.94 billion which was $238 million above analyst expectations and was a year-on-year growth of 12.42% for the quarter. During the same quarter, its payments volume, total-cross border volume, and processed transactions increased by 7%, 22%, and 10% respectively. The company is the largest player in the payment volume market and had a market share of above 50% in 2021. Visa Inc. (NYSE:V) also has extremely high operating margins of above  60% which lead to a higher net income for the firm as well.

Insider Monkey’s survey at the end of the fourth quarter showed 177 out of 943 hedge funds held shares in Visa Inc. (NYSE:V), with a total stake value of $26.5 billion.

Here is what Baron Funds specifically said about Visa Inc. (NYSE:V) in its fourth-quarter 2022 investor letter:

“Shares of global payment network Visa Inc. (NYSE:V) increased after reporting strong quarterly results, with 19% growth in revenue and EPS despite currency headwinds and the suspension of operations in Russia. Payment volume grew 16% in local currency (excluding Russia and China) with notable strength in cross-border volumes driven by rebounding international travel. Management also provided encouraging guidance for the next fiscal year. We continue to own the stock due to Visa’s long runway for growth and significant competitive advantages.”

See also 10 Most Promising Blockchain Stocks According to Analysts and 13 Top Performing Bitcoin Stocks in January.

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Disclosure: None. 10 Most Profitable Cryptocurrency Stocks is originally published on Insider Monkey.