These 2 Crypto Stocks Are Growing Fast
As Bitcoin’s value rises, crypto stocks become more attractive investments, benefiting from the currency’s growing popularity. However, historically, these stocks have struggled with profitability. Recently, two stocks have shown significant progress in this regard: Marathon Digital (NASDAQ: MARA) and Coinbase Global (NASDAQ: COIN).
Marathon Digital
Marathon Digital is a leading crypto mining company that directly benefits from Bitcoin’s higher price. In the fourth quarter of 2023, the company reported revenue of $156.8 million, up 452% year over year. This was a record quarter for Marathon, producing 4,242 bitcoins, more than it generated in the entire year of 2022. The company continues to focus on increasing production by improving its hash rate and overall mining capacity.
Along with strong top-line results, Marathon reported a profit of $151.8 million, which was 97% of its revenue. This is a significant improvement from a net loss of $391.6 million a year earlier. The key reason for this improvement was a boost from gains on digital assets, contributing $213.6 million, higher than its revenue. However, the company’s cost of revenue during the period was $146.1 million (93% of revenue), which could make sustaining profitability challenging.
As long as the price of Bitcoin continues to rise, Marathon could generate profitable results. However, investors should be cautious, as Bitcoin’s price is highly volatile. Despite a 340% increase in its stock over the past 12 months, Marathon remains a risky investment for most portfolios.
Coinbase Global
Coinbase Global operates a leading cryptocurrency trading platform, which could be a safer investment compared to a mining company like Marathon Digital. Coinbase’s success depends on the overall interest and excitement in cryptocurrency, rather than the direct impact of Bitcoin’s price.
Last year, Coinbase entered new markets to expand its user base, including the launch of the Coinbase International Exchange. The company finished the year strong, with fourth-quarter revenue of $953.8 million, a 52% increase from the prior-year period. Net income of $273.4 million was a significant improvement from the $557 million loss incurred a year earlier.
While asset impairment charges affected Coinbase’s financials in the past, improvements in its cost structure have helped improve its bottom line. Shares of Coinbase have risen by 380% in the past 12 months, benefiting from the overall bullishness in the crypto market. Despite the risks associated with crypto investments, Coinbase can be considered one of the safer options for investors bullish on cryptocurrency, offering potential for growth in a volatile market.
