Bitcoin Achieves New Heights, Enhancing Crypto Stock Appeal
Bitcoin has recently reached an all-time high, making investments in cryptocurrency-related stocks increasingly appealing. This article highlights two specific crypto stocks that are poised to capitalize on the ongoing growth of blockchain technology and potentially deliver substantial returns within the upcoming year.
Coinbase: Leading the Institutional Crypto Shift
With a market capitalization of approximately $90 billion, Coinbase (NASDAQ:COIN) stands as the largest cryptocurrency exchange in the United States. The company is at the forefront of a significant transformation in the crypto industry, evolving from a platform primarily catering to retail investors to a foundational component of digital asset infrastructure catering to institutional clients.
The momentum Coinbase has gained in the institutional sector is impressive. The exchange holds custody for a majority of Bitcoin and Ethereum exchange-traded funds (ETFs), which have collectively attracted over $120 billion in just 18 months. The firm’s “Crypto-as-a-Service” model now supports over 200 financial institutions, including collaborations with BlackRock’s Aladdin platform, underscoring the increasing reliance of traditional financial systems on Coinbase’s infrastructure.
Coinbase’s recent acquisition of Deribit, valued at $2.9 billion, marks the largest deal in the history of cryptocurrency, granting the company a commanding 75% market share in options trading. This acquisition completes a comprehensive derivatives portfolio that includes spot, futures, and options, addressing the fact that a significant portion of global crypto trading volume is derived from derivatives. The inherent stability of options trading offers consistent revenue across various market conditions.
Additionally, the growing prominence of stablecoins is expected to serve as a substantial growth driver, with USDC balances on Coinbase’s platform tripling over a two-year period. The company is also focusing on payments as a new growth area, as more businesses adopt cryptocurrency for efficient and cost-effective global transactions. Currently, Coinbase utilizes USDC for internal vendor payments, further integrating crypto into everyday business operations.
As the total addressable market for cryptocurrency expands rapidly, Coinbase’s 13-year lead in developing proprietary technology positions it to capture significant value as digital assets gain widespread acceptance. Recently, the company was included in the S&P 500 Index, and its stock has surged nearly 600% over the past three years. Analysts forecast that Coinbase’s adjusted free cash flow is expected to rise from $2.55 billion in 2024 to $3.3 billion in 2025. If the stock is valued at 40 times its trailing free cash flow, it could see over a 45% increase within the next eight months.
Hive Digital: A Leader in Green Energy and Cryptocurrency
Hive Digital (TSXV:HIVE), with a market valuation of $610 million, specializes in building and operating data centers powered by renewable energy across Canada, Sweden, Iceland, Switzerland, and Paraguay. The company made significant strides in fiscal 2025 (which concluded in March), establishing itself as a dual player in both Bitcoin mining and high-performance computing (HPC). During this fiscal year, Hive reported revenues of $115 million alongside an adjusted EBITDA of $56 million, reflecting strong performance amid post-halving market dynamics.
One of the most notable aspects of Hive’s strategy is its rapid growth trajectory. The company’s hash rate increased dramatically from 4.7 exahashes to 11.5 exahashes, with management aiming for a target of 25 exahashes by November. This growth is bolstered by strategic operations in Paraguay, where the company harnesses competitively priced green hydroelectric energy. At the projected 25 exahashes with Bitcoin priced at $100,000, Hive anticipates generating $400 million in annual revenue.
Furthermore, Hive’s AI computing division, through its subsidiary Buzz, achieved a remarkable annual run rate of $20 million, effectively doubling in just six months. The recent acquisition of a 7.2-megawatt data center in Toronto is expected to enhance HPC capacity by 3.5 times, aiming for annualized revenue of $100 million by 2026. With an impressive return on invested capital of 22% and the lowest operational costs per Bitcoin mined in the sector, Hive combines operational excellence with significant growth potential as demand for both Bitcoin mining and AI infrastructure continues to rise.
Final Thoughts on Crypto Investments
Before making investment decisions in Bitcoin or other cryptocurrencies, it’s essential to consider expert analyses. The Motley Fool Stock Advisor Canada team has identified what they believe to be the top stocks for investors in 2025 and beyond, although Bitcoin is not among them. The selected stocks have the potential to yield significant returns in the coming years. For instance, if investors had put $1,000 into MercadoLibre, often referred to as the “eBay of Latin America,” back in January 2014, it would now be worth over $24,927.94.
The Stock Advisor Canada service offers a straightforward roadmap for investors, featuring guidance on portfolio development, regular updates from analysts, and monthly stock recommendations from both Canadian and U.S. markets. The service has consistently outperformed the S&P/TSX Composite Index by a margin of 30 percentage points since 2013.
