Robert has reported for a variety of international publications including the Associated Press, The Guardian, Vice, and Decrypt. Current areas of interest include the political economy of technology, cryptocurrencies, and privacy. Robert has a Bachelor of Science from UCL, and a Master's degree from the University of Oxford's Internet Institute.
Cryptocurrencies are decentralized coins that do not trade on public stock exchanges. Instead, they trade on cryptocurrency trading platforms. However, some of the companies that create critical cryptocurrency infrastructure are publicly traded, and you can trade top crypto stocks just like shares in Apple or Google.Buy and Sell Bitcoin, Ethereum, and over a dozen other cryptocurrencies with Wealthsimple. Sign up and Trade here.
What are cryptocurrency stocks?
These stocks are usually tied to the fate of the cryptocurrency market, since that’s the market that the industry supports. For instance, if Bitcoin crashes and fewer people want to invest in it, then the stock of, say, Coinbase, one of the largest cryptocurrency exchanges in the world, may also fall. Indeed, according to a November 2021 story on Market Watch, reduced volatility in Bitcoin’s price suppressed trading fees on the exchange, since people weren’t as interested in trading the whiplash ups and downs of the coin. After Coinbase’s CFO announced this, the price of Coinbase stock fell 13%.
Why trade cryptocurrency stocks?
But why trade a cryptocurrency stock, whose fate may be intimately tied to the market itself, if you can just trade cryptocurrencies themselves? There are four main reasons.
First, you might have predictions that the company could outperform the crypto market or competitors within its niche. You might think that Bitcoin’s price is unlikely to grow more, but that there’s a lot of room for growth within Bitcoin mining, and, say, Greenidge Generation mining operation could be a cheap stock that will beat the competition. You might think that Coinbase CEO Brian Armstrong will become the next Jeff Bezos, and that he’s a surer bet than the latest meme coin.
Second, cryptocurrency trading is difficult. Dig deeper into the industry and you’ll quickly find obscure trading venues, most of which are unregulated, come without government deposit schemes and have complicated histories. If you’re a larger company, there are so many things to research and learn before you even get around to trading a coin. Wallets, exchanges, security…it’s a daunting list. Stocks, by contrast, trade on highly-regulated exchanges and have for centuries. Companies are obliged to report financial information and are accountable to securities agencies.
Third, when you buy a stock, you buy decision-making power within a transparent, well-established company. Lots of cryptocurrencies are new, decentralized, and may not come with appropriate or battle-tested governance structures. Some protocols are founded by anonymous people on the Internet, and it’s tricky to exert influence over those protocols if you don’t know who runs them.
Fourth, you might want to trade from a tax-sheltered account that doesn’t let you invest in cryptocurrencies directly. This is one of the main reasons why investment vehicles like the Grayscale Bitcoin Trust exist. They are huge, publicly-traded trusts of privately-invested money that exclusively invest in cryptocurrencies. The trust contains $36 billion—a testament to the demand to trade Bitcoin on public stock exchanges.
As for which cryptocurrency stocks you should buy, no one can predict the future. Even stocks with a strong strong track record could crash. What we can do is tell you about some of the top-performing cryptocurrency stocks (in terms of market cap) in 2021 in Canada and the United States. We won’t be able to tell you the best crypto stocks, or provide an exhaustive list of all cryptocurrency stocks—you’ll have to make your own evaluation—but getting a sense of the digital currency stocks on the market should get you well on your way if you are planning on investing in them.
Five of the Largest Canadian Crypto Stocks in 2021, by Market Cap
Voyager Digital (TSX:VOYG)
Voyager Digital is a TSX cryptocurrency stock, meaning it trades on the Toronto Stock Exchange. The company produces a crypto trading app, similar to Coinbase or Crypto.com. It offers more than 70coins, including Bitcoin, Ethereum, and Bitcoin Cash, and advertises rewards of up to 12%. Voyager will soon launch its own debit Mastercard that offers rewards of up to 9% on holdings. When you hold money with Voyager, you actually hold a stablecoin called USDC, which Voyager converts into cash whenever you want to buy something using its debit card.
The stock trades on the Toronto Stock exchange under the ticker VOYG, and the company had a market cap of $2.97 billion CAD as of December 2021. Voyager also has its own token, VGX, which is separate from the stock. As of December 2021, it had a market cap of $1.3 billion CAD. You can trade the token on cryptocurrency exchanges, but not on public stock exchanges.
Galaxy Digital Holdings (TSX:GLXY)
Galaxy Digital is one of the largest and most influential cryptocurrency companies in the industry. Led by former hedge fund manager Mike Novogratz, Galaxy is a full-service financial firm that offers investment banking, mining, prime brokerage services (crypto trading for rich people and companies), and asset management. The firm is headquartered in New York but its stock trades on the Toronto Stock Exchange.
As of November 30, 2021, Galaxy Digital managed $3.5 billion USD in assets, had more than 690 crypto trading counterparties and has invested in more than 150 companies. In Q3 2021, it earned $517 million and had earned $1.2 billion since the start of the year. Since its listing in 2016, Galaxy Digital Holdings stock price increased from $1.90 CAD to $27 CAD as of December 3, 2021 — a rise of 1,325.26%. Its market cap in December 2021 was $2.67 billion CAD.
Hive Blockchain Technologies (TSXV:HIVE)
Hive is one of many crypto mining stocks that trade on public markets. The company was listed on the TSX Venture Exchange in 2017 under the ticker HIVE. In the US, Hive also trades on the Nasdaq under the same ticker name, and it trades on the Frankfurt Stock Exchange under the ticker HBF.F. As of December 2021, the stock on the Toronto Stock Exchange had a market cap of $1.56 billion.
Hive claims to be “dedicated to mitigating [its] environmental impact,” and says it constructed mining farms in places where green energy is relatively cheap. Mining has been criticized for being a dirty industry, since many miners draw power from coal-powered sources. Hive accomplishes its green goal by operating miners in “cool and politically stable jurisdictions (Canada, Sweden, and Iceland) with access to low-cost green/renewable energy.” In Canada, Hive uses hydroelectric power in Quebec to mine Bitcoin.
iMining Technologies (TSXV:IMIN)
Headquartered in Vancouver, Canada, iMining operates as an investment and mining company, and also provides trading infrastructure to institutional clients. The company, which has about 35 employees, had a market cap of about $13 million as of December 2021 and trades on the TSX Venture Exchange.
Intellabridge Technology (CSE:KASH)
Based in Vancouver, Intellabridge Tech is a digital bank for blockchain technologies. The 44-person company helps both retail and institutional investors access decentralized financial applications. Its Kash app (not to be confused with Square/Block’s Cash app) introduces customers to interest-bearing savings accounts, stablecoins, synthetic stocks, and ETFs, among other services. Intellabridge trades on the Canadian Securities Exchanges under the ticker KASH, and, as of December 2021, had a market cap of $52 million.
Ten of the Largest US Cryptocurrency Stocks in 2021, by Market Cap
Hut 8 Mining (NASDAQ:HUT)
Hut 8 Mining is a cryptocurrency mining farm that trades on the Nasdaq and the Toronto Stock Exchange under the ticker HUT. Based in Canada, Hut 8 specializes in Bitcoin and Ethereum mining, the two most popular cryptocurrencies to mine. Note that Ethereum mining machines will become redundant after the network transitions to proof-of-stake. As of December 2021, the company had a market capitalization of $2.05 billion CAD on the Toronto Stock Exchange.
Bit Digital (NASDAQ:BTBT)
Bit Digital is a Bitcoin mining firm headquartered in New York. It mines across North America and claims that the majority of its miners run on carbon-free power. It operates 27,744 Bitcoin miners, which have collectively mined 3,334.89 BTC. That’s about $189 million as of December 2021.
Bitfarms is a Canadian Bitcoin mining company that trades on the Nasdaq under the ticker BITF. The company was founded in 2017, and mines Bitcoin from five Bitcoin farms in Quebec with more than 99% hydroelectricity. It had a market capitalisation of $1.58 billion CAD as of December 2021.
Marathon Digital Holdings (NASDAQ:MARA)
Marathon is a Bitcoin miner based in Las Vegas. It mines Bitcoin using specialized mining machines, and until October 2020 sold the Bitcoin it earned for cash. Since then, it holds all the Bitcoin it earns. Like other companies, it has aggressive plans to expand its business. As of this writing, it mines in Montana and North Dakota. The company trades on the Nasdaq and has a market cap of $4.4 billion.
This Chinese company makes Bitcoin mining hardware and trades on the Nasdaq. You may have read that China aggressively kicked out Bitcoin miners from the country in the spring of 2021. Investors read that too, and Canaan’s stock fell from peaks of $36 in March to $6 in December 2021. Canaan has been busy spreading its wings elsewhere. In June, it expanded sales to Kazakhstan, another country full of cheap energy. As of December 2021, the company had a market cap of about $1 billion.
Ebang International Holdings (NASDAQ:EBON)
Ebang is a Chinese company that specializes in building crypto mining equipment for Bitcoin miners and the vital ASIC chip technology. This powerful, purpose-built hardware is great at mining Bitcoin efficiently. The stock suffered after the Chinese government poo-pooed the entire industry; the company had a market cap of $243 million, as of December 2021.
Coinbase (NASDAQ: COIN)
Coinbase is one of the largest cryptocurrency exchanges in the world. It was also one of the first to go public. It was listed on the Nasdaq in April 2021, and was notable for being listed directly rather than going through a cumbersome roadshow. The company offers crypto brokerage services, institutional trading on decentralized ledgers, and a crypto wallet, and is building an NFT social media service. Its market cap was $56.86 billion as of December 2021.
Riot Blockchain (NASDAQ: RIOT)
Riot Blockchain is an American Bitcoin mining company. It runs two facilities, one in Rockdale, Texas, and another at Massena, New York. It had a market cap of $3.42 billion as of December 2021, and trades on the Nasdaq under RIOT.
Block (NYSE: SQ)
Block, formerly known as Square, is the payments company that built Cash App. It’s led by Jack Dorsey, the founder and former CEO of Twitter, and a Bitcoin enthusiast. Square funds Bitcoin development, offers crypto trading within its app, and is building a decentralized Bitcoin exchange. The company had a market cap of $81.66 billion as of December 2021.
Greenidge Generation Holdings (NASDAQ: GREE)
Greenidge Generation is a Bitcoin miner based in New York. Greenidge used to power the surrounding areas with its coal mining plant, but then its plants were mothballed in the early 2010s. Private equity buyers came onto the scene and fired up the coal plants to mine Bitcoin. This attracted a lot of flack from environmentalists, and Greenidge has since bought carbon offsets to try and smooth things over. The fiery PR news war over whether Greenidge is a dirty polluter or a success story remains unresolved, but you can purchase stock in it on the NASDAQ under the ticket GREE. The company had a market cap of $350 million as of December 2021.
Frequently Asked Questions
You can trade a cryptocurrency stock through any platform that offers them, including Wealthsimple. You need to live in an eligible country and ensure that you’re eligible to buy and sell stocks before you sign up, but once you’re logged on to the services, it’s usually a matter of handing over the cash.
We can’t predict the future; each stock is different and the company has its own advantages and drawbacks. However, note that most cryptocurrency stocks are, in some way or another, tied to the fate of the cryptocurrency market.
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