In this piece, we will take a look at the 11 most profitable cryptocurrency stocks. If you want to ignore our analysis of the cryptocurrency mining industry and how the tail end of 2023 is shaping up to be a game changer, then you can take a look at the 5 Most Profitable Cryptocurrency Stocks.
Heading into 2024, Bitcoin is on the rise once again. The world’s premier cryptocurrency was battered in 2022 as rapidly increasing interest rates and rising inflation created risk aversion among investors that caused capital to flow to safe haven investments such as the U.S. dollar. Bitcoin’s fall from grace was quite striking and it caught most of the retail investing crowd by surprise. This happened because during the coronavirus pandemic as generous stimulus checks made their way to consumers, and they were able to save more money due to travel restrictions, Bitcoin had soared to $64,000 in late November 2021.
However, its speculative nature and the fact that no solid corporate financial performance constitutes a base share price, the fall was equally stunning. A year after November 2021, i.e. in November 2022, Bitcoin had lost roughly 74% of its value as it dropped to below $16,500 in the aftermath of the FTX collapse. Bitcoin’s price has a fixed set of headwinds and tailwinds. On the former front, any potential regulatory action or the collapse of big players saps out optimism from the price.
On the latter, any hint of more regulatory clearance or better integration with financial markets acts as a catalyst. This has also been the case in 2023, as market participants become increasingly more confident that a Bitcoin exchange traded fund (ETF) might clear the SEC’s radar soon. An ETF is of several kinds, and the most popular ones involve stocks. However, ETFs are not limited to stocks, as they can also trade in commodities such as gold. The benefit of this is that it allows stock market investors to trade in assets that are not traded on exchanges, and the benefits of a Bitcoin ETF would see more investors being able to park their money in it for the hope of a profit during their daily trading activities on the stock market.
Within the euphoria of Bitcoin mining and the fact that it takes copious amounts of computing power to mine it is corporate entities. These firms target the Bitcoin and the broader cryptocurrency mining sector. Like traditional mining companies such as Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX), cryptocurrency miners also produce assets. These assets are then sold, and the difference between the production costs and the selling price is booked as a profit. These miners are also served by backend companies that sell mining computers or offer hosting and co location services for large data centers.
Interestingly though, cryptocurrency firms such as Iris Energy Limited (NASDAQ:IREN) and Bitfarms Ltd. (NASDAQ:BITF) also often branch out into other industries to buffer their business models against a potential downturn in a speculative market. These markets can include the energy sector where the firms sell their excess electricity or provide their data centers to other companies. Additionally, the broader cryptocurrency sphere also includes blockchain companies. These firms provide their software to other companies as part of a Software as a Service (SaaS) platform that can suit a variety of different industries such as banking.
To gain a deeper sense of how the cryptocurrency industry works and what drives its profitability, consider this excerpt from Cipher Mining Inc. (NASDAQ:CIFR)’s latest earnings call:
Slide 5 is a high level overview of a bitcoin mining business that we like to include each quarter to remind everyone how our business model works. We operate the box in the middle of the drawing that says mining equipment, which represents our data centers and mining rigs. As I discussed earlier, we spend the majority of our operating expenses on electricity, which our data centers convert into computing output. Unlike traditional data centers, which operate a similar model and sell their computing output to enterprise clients for dollars, Cipher sells its computing output, called hashrate to the bitcoin network for bitcoins. To make this model operate profitably, a bitcoin mining company needs to control both its electricity and the capital it spends to build data centers, including what it spends to purchase mining equipment.
Controlling these costs enables a miner to be a lower cost producer, and our focus at Cipher has always been on controlling these specific costs to produce the best possible unit economics. That illustration hopefully gives you a good sense of a straightforward bitcoin mining business. Cipher, however, does have an additional element to our business that is incredibly valuable. We have the ability to sell power back to the grid. Our Power Purchase Agreement gives us a combination of downside risk protection as well as upside optionality to our revenue streams that doesn’t exist for many bitcoin miners.
So which are the most profitable cryptocurrency stocks? The top three are Bitdeer Technologies Group (NASDAQ:BTDR), Bitfarms Ltd. (NASDAQ:BITF), and Canaan Inc. (NASDAQ:CAN) and you can take a look at the rest below.
Pixabay/Public Domain
Our Methodology
To compile our list of the most profitable cryptocurrency stocks, we ranked all cryptocurrency companies by their latest trailing twelve month net income.
11 Most Profitable Cryptocurrency Stocks
11. BIT Mining Limited (NYSE:BTCM)
Latest TTM Net Income: -$142 million
BIT Mining Limited (NYSE:BTCM) is an American cryptocurrency mining company that operates its own data center and offers a cryptocurrency wallet. It is currently seeking to use advanced semiconductor manufacturing processes to upgrade its mining portfolio and is developing 7-nanometer mining machines. Newer semiconductor processes carry several advantages over older ones. Since their circuits are smaller, they reduce electrical losses within a chip. This increases performance as well as power efficiency. Cumulatively, the changes increase the rate at which currency can be mined, and the fact that BIT Mining Limited (NYSE:BTCM) is focusing on 7nm products means that it can secure a stable supply that is unaffected by chip shortages.
BIT Mining Limited (NYSE:BTCM) joins Bitdeer Technologies Group (NASDAQ:BTDR), Bitfarms Ltd. (NASDAQ:BITF), and Canaan Inc. (NASDAQ:CAN) in our list of the most profitable cryptocurrency stocks.
10. CleanSpark, Inc. (NASDAQ:CLSK)
Latest TTM Net Income: -$136 million
CleanSpark, Inc. (NASDAQ:CLSK) is a Bitcoin mining company headquartered in Henderson, Nevada. Unlike other mining firms, it has weathered the Bitcoin storm well by missing analyst EPS estimates in only one of its four latest quarters. The stock is rated Strong Buy on average.
During this year’s September quarter, 11 out of the 910 hedge funds profiled by Insider Monkey had bought and owned CleanSpark, Inc. (NASDAQ:CLSK)’s shares. Jim Simons’ Renaissance Technologies was the biggest investor among these due to its $7.3 million stake.
9. HIVE Digital Technologies Ltd. (NASDAQ:HIVE)
Latest TTM Net Income: -$127 million
HIVE Digital Technologies Ltd. (NASDAQ:HIVE) is a diversified cryptocurrency mining company that produces Bitcoin, Ethereum, and other coins. It expanded its global portfolio in November 2023 after buying a data center property in Sweden.
As of Q3 2023 end, five out of the 910 hedge funds part of Insider Monkey’s database were HIVE Digital Technologies Ltd. (NASDAQ:HIVE)’s shareholders.
8. Hut 8 Corp. Common Stock (NASDAQ:HUT)
Latest TTM Net Income: -$109 million
Hut 8 Corp. Common Stock (NASDAQ:HUT) is a backend cryptocurrency mining company that provides mining infrastructure. It beefed up its operational portfolio in December 2023 after completing a merger that will allow the new entity to control 825 megawatts of infrastructure across the U.S. and Canada.
For their third quarter of 2023 shareholdings, three out of the 910 hedge funds profiled by Insider Monkey had invested in the company. Hut 8 Corp. Common Stock (NASDAQ:HUT)’s largest hedge fund shareholder was Ken Griffin’s Citadel Investment Group as it owned $4.7 million worth of shares.
7. TeraWulf Inc. (NASDAQ:WULF)
Latest TTM Net Income: -$88 million
TeraWulf Inc. (NASDAQ:WULF) is an American Bitcoin mining company headquartered in Easton, Maryland. The firm has missed analyst EPS estimates in all four of its latest quarters, but on a positive note, the stock is rated Strong Buy on average.
During 2023’s September quarter, nine hedge funds out of the 910 tracked by Insider Monkey were TeraWulf Inc. (NASDAQ:WULF)’s shareholders.
6. Cipher Mining Inc. (NASDAQ:CIFR)
Latest TTM Net Income: -$88 million
Cipher Mining Inc. (NASDAQ:CIFR) is a large scale Bitcoin mining company based in New York, New York. The firm was quick to release its November operations update in December when it informed shareholders that during the month Cipher Mining Inc. (NASDAQ:CIFR) operated a whopping 70,000 mining rigs and mined 433 Bitcoins.
As of Q3 2023 end, nine out of the 910 hedge funds part of Insider Monkey’s research for the quarter had held a stake in Cipher Mining Inc. (NASDAQ:CIFR).
Along with Bitdeer Technologies Group (NASDAQ:BTDR), Cipher Mining Inc. (NASDAQ:CIFR), Bitfarms Ltd. (NASDAQ:BITF), and Canaan Inc. (NASDAQ:CAN), is a highly profitable cryptocurrency stock.
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Disclosure: None. 11 Most Profitable Cryptocurrency Stocks is originally published on Insider Monkey.