Bitcoin (CRYPTO:BTC) reached new highs this year and is up about 300% since 2023. But there were even better crypto investments that investors could have made during this time.

Coinbase Global (NASDAQ: CURRENCY), Microstrategy (NASDAQ:MSTR), and CleanSpark (NASDAQ: CLSK) outperformed the popular digital currency during this period. Here’s a closer look at these stocks’ performance over the past year, from smallest to largest gains.

Coinbase Global: 518%

Coinbase Global runs a popular cryptocurrency exchange that benefits from the growing popularity of crypto. And since it doesn’t need to rely entirely on Bitcoin, it can be a more diversified investment option for investors. Although it is the most popular digital currency, it only accounted for 34% of the exchange’s trading volume last year.

In 2023, Coinbase Global reported a profit of $94.9 million (a marked improvement from 2022, when it suffered a loss of $2.6 billion) as it reduced expenses and did not incur heavy expenses of impairment. The company generates around half of its revenue from subscriptions and services and the other half from transactions, which further highlights its diversification.

The stock trades at more than 17 times earnings, but with a Price/earnings/growth ratio from less than 1, this still has the potential to be a good buy in the long term if you are bullish on crypto. But this is still a volatile and risky stock because Coinbase’s performance will ultimately depend on the performance of Bitcoin and other digital currencies. And as it expands its operations, it may be difficult for the company to remain in the black.

CleanSpark: 765%

CleanSpark is a Bitcoin miner and therefore its performance will be more directly affected by the increase in the price of the digital currency. A higher price means higher revenue for the business. The recent halving eventunfortunately, it will mean less production for the company and fewer bitcoins produced.

However, CEO Zach Bradford isn’t worried, leaning on the company’s strong margins as a key differentiator and the reason it can succeed where other miners might fail. As one of the biggest miners, Bradford, said: “…our slice of the pie should get bigger after the halving. We think about 10, 15 or even 20%.”

In the last three months of 2023, the company made a profit of US$25.9 million, compared to a loss of US$29 million in the same period of the previous year. But that was with the help of a $36 million gain in the fair value of Bitcoin.

As one of the largest miners, it may perform well despite the recent halving. But what is worrying is that the company needed a high price for the digital currency and an asset gain to turn a profit in the last quarter. CleanSpark is a riskier option than Coinbase and may only be suitable for the most bullish Bitcoin investors.

The story continues

Microstrategy: 790%

One of the hottest stocks last year was undoubtedly MicroStrategy. What is intriguing is that the company is not a crypto mining company and does not operate an exchange; its goal is to provide companies with analytics and business intelligence solutions.

But its CEO, Michael Saylor, is incredibly bullish on cryptocurrencies, saying in a recent interview that Bitcoin is a better option than gold – having all of its more attractive features without its drawbacks.

MicroStrategy owns more than 214,000 bitcoins and is the largest corporate holder of the cryptocurrency. This means your exposure to it is significant.

Last year, the company suffered an impairment loss on digital assets of US$115.9 million. And in the previous year, when the value of Bitcoin was falling sharply, the loss amounted to almost $1.3 billion.

The company only made a profit in 2023 due to a $553.6 million income tax benefit. Its main operations continue to be unprofitable and that is what should matter to investors. MicroStrategy’s fundamentals do not support its inflated valuation, which is now more than 800 times expected future earnings.

Investors appear to be piling into the stock because of its cryptocurrency holdings and the CEO’s bullish outlook on Bitcoin. While this stock is doing well with crypto doing well, it could be the one to fall the most in a correction. MicroStrategy is a stock I would stay away from.

Should you invest $1,000 in Coinbase Global now?

Before purchasing Coinbase Global shares, consider the following:

The Motley Fool Stock Advisor analyst team just identified what they believe is the 10 best stocks for investors to buy now… and Coinbase Global was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia I made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $506,291!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular analyst updates, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of the S&P 500 since 2002*.

See the 10 actions »

*Stock Advisor returns April 22, 2024

David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Bitcoin and Coinbase Global. The motley fool has a disclosure policy.

3 Crypto Stocks Are Up Over 500% Since 2023 was originally published by The Motley Fool

Fuente