Top Cryptocurrency Stocks for Q2 2023

Top cryptocurrency stocks for the second quarter of 2023 include Applied Digital Corp. (APLD), NVIDIA Corp. (NVDA), and Riot Platforms Inc. (RIOT), which have risen by as much as 135% in the last year even as the broader crypto industry has slumped.

Cryptocurrency companies as represented by the Amplify Transformational Data Sharing ETF (BLOK), an exchange-traded fund (ETF), have lost almost a tenth of their value in the last year. At the same time, the benchmark Russell 1000 Index has climbed nearly 4%.

Below we look at the top cryptocurrency stocks based on best value, fastest growth, and most momentum. All data below are as of May 25.

Best Value Cryptocurrency Stocks

These are the cryptocurrency stocks with the lowest 12-month trailing (TTM) price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales eventually could produce more profit when it either achieves or returns to profitability. The P/S ratio shows how much you’re paying for the stock for each dollar of sales generated.

^{Source: YCharts}

• Greenidge Generation Holdings Inc.: This company operates cryptocurrency datacenters and power-generation businesses as well as cryptocurrency-mining facilities. The company's stock has plunged by almost 94% in the last year, prompting a 1-for-10 reverse split in mid-May.
• Canaan Inc.: A Chinese technology company that provides high-performance computing services. It is focused on computing chip design, chip research and design, computing equipment production, and software services. The company supplies computing equipment to the crypto-mining industry. Canaan's shares have shed more than a fifth of their value in the past year amid disappointing earnings.
• Block Inc.: A financial services and digital payments firm. It provides platforms to allow businesses to accept credit card and cryptocurrency payments. Block also provides financial and marketing services. Block's gross profit climbed by more than a quarter for the first three months of 2023, driven by substantial gains in Cash App profit that helped narrow its net loss from a year ago.

Fastest-Growing Cryptocurrency Stocks

These are the crypto stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors pick out growing startups that haven't yet reached profitability. In addition, earnings per share (EPS) can be significantly influenced by accounting factors that may not reflect the overall strength of the business.

However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability. Companies with quarterly revenue growth of more than 1,000% were excluded as outliers.

^{Source: YCharts}

• Robinhood Markets Inc.: Robinhood operates a brokerage and cash management app and platform. Users can buy and sell stocks, ETFs, options, and cryptocurrencies. Revenue increased by almost half for the most recent quarter, driven by rising net interest income.
• Shift4 Payments Inc.: This is a payment processing services provider. It offers software for transaction and money transfer processes and also enables cryptocurrency transactions. Shift4's revenue grew by more than a third in the latest quarter as the company added several new signature merchants.
• Block Inc.: See company description above.

Cryptocurrency Stocks With the Most Momentum

These are the cryptocurrency stocks that had the highest total return over the past 12 months out of the companies we looked at.

^{Source: YCharts}

• Applied Digital: It builds and operates data centers to power blockchain infrastructure and cryptocurrency mining in North America. The company's shares surged in mid-May on news that it had entered a $180 million agreement to provide artificial intelligence (AI) cloud services to an undisclosed customer.
• NVIDIA: A company that builds and sells graphics processors and related software, some of which are used to mine cryptocurrency. Shares of NVIDIA leaped 25% May 25 after the company reported record data-center revenue for the latest quarter, and amid a partnership with Microsoft focusing on AI systems and machine learning.
• Riot Platforms: A bitcoin mining and digital infrastructure company. The company has bitcoin-mining operations in Texas and New York. It also has electrical switchgear engineering and fabrication operations in Colorado. A bullish analysts' earnings forecast helped to push Riot stock higher in recent weeks.

Risks of Cryptocurrency Stocks

Due to high volatility, the cryptocurrency market carries a certain level of risk, and price swings are common. Before you start investing in crypto, you should determine your appetite for risk and implement a solid risk management strategy.

The cryptocurrency market is dominated by speculative trading. Studies of blockchain activity show that exchange trades remain the most prevalent use for cryptocurrencies. Cryptocurrency skeptics, including Warren Buffett, Bill Gates, and JPMorgan CEO Jamie Dimon, all have warned of a potential crypto bubble. Cryptocurrencies aren't unique in being subject to speculative mania and irrational exuberance, but that's another risk to consider.

As a new technology, some speculative behavior is to be expected, especially as blockchain technology matures. However, new investors should be wary of falling into fraudulent situations or psychological traps such as herd instinct, fear of missing out, or the greater fool fallacy, which can make all the difference between a calculated risk and a damaging one.

Benefits of Cryptocurrency Stocks

While cryptocurrencies are risky, they also have the potential to offer outsized returns. When Bitcoin began in 2009, the digital currency essentially had very little value. In the years that followed, it jumped to a fraction of a penny and then eventually to tens of thousands of dollars. Gains like these might be among the most significant benefits of investing in cryptocurrency.

Because it is a relatively new industry, cryptocurrency companies also can offer a unique opportunity to investors to enter the blockchain industry. Blockchain has the potential to transform a range of industries, from accounting and cloud computing to digital advertising and healthcare. Because many cryptocurrency companies are also involved in blockchain—by providing computing power to support blockchain networks, for instance—some of these companies provide exposure to another industry as well.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above stocks.