Top Cryptocurrency Stocks for Q2 2023

Jun 20, 2023

GREE, HOOD, and APLD are top for value, growth, and momentum, respectively

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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.

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

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

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

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.

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.

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