While a direct investment in crypto is likely the most common way of gaining exposure to the space, investors seeking diversification or looking to avoid the risks of transacting with and storing tokens might also consider any number of cryptocurrency-adjacent stocks. These include companies that mine crypto, that provide infrastructure or hardware used in the industry, and so on. Interestingly, while there are reasons to buy crypto stocks related to the potential of the cryptocurrency space, one of the most successful of these firms has pivoted toward energy sales in a compelling way as well.
Massive Mining Operation and Holdings Give Marathon Momentum
Marathon Digital (NASDAQ: MARA) is one of the largest crypto mining firms in the United States, with a market value of more than $6 billion. This has allowed it to build up a massive mining fleet, with impressive results: in June, the firm won 211 Bitcoin blocks through the complex mining process, or more than 5% of all available Bitcoin rewards that month. Shares of the stock spiked on the news and are up about 6% in the last month.
The firm appears poised to achieve its ambitious production upscaling goals. MARA executives have set a production target by year-end of 75 exahashes per second (a measure of computational power key to successfully mining Bitcoin). This is a full 40% higher than the hash rate achieved at the end of 2024.
MARA's substantial mining power has translated into significant BTC holdings as well, as the company had nearly 48,000 BTC as of the end of June. At a value of roughly $5.2 billion, this makes up the lion's share of MARA's market value—investors should keep in mind that a crash in crypto prices could very well decimate the firm.
Nonetheless, five out of 10 analysts rate MARA stock a Buy, with another four suggesting Hold. Analysts predict upside potential of more than 21% for shares, a potential boon for investors keen to access the mining industry.
Another Miner With Strong Hash Rate Performance
Like MARA, Cipher Mining Inc. (NASDAQ: CIFR) is primarily a Bitcoin mining operation. Its share price spike of about 47% in the last month is also likely due to its recent good news on that front.
In the second quarter, Cipher outperformed its self-mining capacity guidance for its new Black Pearl site in Texas. The reported hash rate of 3.4 EH/s was well above the company's previous prediction of 2.5 EH/s.
Now might be a good time for investors to join in the rally because Cipher anticipates further boosts to its hash rate in the coming months as other new mining rigs come online and the site installation is completed.
This optimism is visible in the 11 Buy ratings analysts have provided CIFR shares, alongside forecasts for upside of 26%.
Energy Sales May Be a Gamechanger for Hut 8
Hut 8 (NASDAQ: HUT) focuses primarily on mining Bitcoin. It, too, has experienced a rally, with shares roughly doubling in price since late April. The company recently announced an expansion into regulation-friendly Dubai, a move that the company has said is about the efficiency of its capital strategy. Hut 8 is also tied with Donald Trump Jr. and Eric Trump via a venture called American Bitcoin Corp., which recently garnered $220 million in accredited investor support.
But the primary driver of Hut's recent share price explosion may more likely be its successful deployment of its energy infrastructure outside of the cryptocurrency space. Mining firms like Hut require massive supplies of electricity for mining purposes, and the infrastructure necessary to support these activities can also be put to use for more traditional applications. Case in point, the company recently announced five-year capacity contracts for four of its natural gas-fired plants with the Ontario Independent Electricity System Operator. The contracts represent some 310 MW of power generation capacity in total.
With rising energy demand and prices, pivoting in this way could prove to be highly lucrative for companies like Hut 8, and analysts think so too—HUT shares have a unanimous Buy rating from all 19 analysts, as well as 21% in upside potential.
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The article "Why Now Could Be the Smartest Time to Buy Crypto Stocks" first appeared on MarketBeat.
