Bitcoin (BTC-USD) prices have rocketed past the $40,000 threshold and shares of several companies with ties to the world’s most valuable cryptocurrency are rallying too. Digital asset exchange giant Coinbase (NASDAQ:COIN) has soared more than 60% in just the past month, for example.
But pure-play crypto stocks like Coinbase and Bitcoin miners Riot Platforms (NASDAQ:RIOT) and Marathon Digital Holdings (NASDAQ:MARA) are risky and extremely volatile, given how closely they mirror the rise (and fall) of the price of Bitcoin, Ethereum (ETH-USD), BNB (BNB-USD) and other top cryptos. These three stocks are also all already up more than 300% in 2023, an astonishing amount that could make it difficult for them to climb much further.
Still, there are other larger and more diversified companies with exposure to Bitcoin and the blockchain ecosystem that could be slightly safer bets on the continued rise of crypto.
4 Best Stocks to Buy as Bitcoin Surges
According to TipRanks, a financial site that tracks Wall Street broker recommendations, the three crypto-related stocks that analysts think have the most upside potential are chip giant Nvidia (NASDAQ:NVDA), Venmo owner PayPal (NASDAQ:PYPL) and Square parent company Block (NYSE:SQ).
Nvidia, the trillion-dollar tech company that is riding the artificial intelligence craze, is also a big player in crypto since its graphic processing units (GPUs) are used to help mine BTC. Shares of Nvidia have skyrocketed more than 200% this year already, but analysts are forecasting another 45% jump to a consensus 12-month price target of $661 a share.
Payment processing giants Block and PayPal are also beneficiaries of the rise of crypto. That’s because Block’s Cash App lets users buy, sell and transfer Bitcoin. PayPal goes a step further, allowing customers to trade Bitcoin, Ethereum, Litecoin (LTC-USD) and the company’s own stablecoin, PayPal USD, a cryptocurrency that is pegged to the U.S. dollar. Analysts predict that PayPal’s stock could climb nearly 25% further from current levels and that Block shares may rise more than 10%.
CBOE Global Markets (BATS:CBOE) is also a stealthy play on the growing popularity of crypto trading. The derivatives exchange now has futures contracts for Bitcoin and Ethereum and recently announced plans to launch clearing and trading for margin futures of these top two cryptocurrencies.
CBOE should also be a winner if and when the Securities and Exchange Commission finally approves a so-called spot Bitcoin ETF (a fund that would actually own Bitcoin at the current market price as opposed to Bitcoin futures). That’s because CBOE has filed with the SEC to list spot Bitcoin ETFs from money managers Fidelity, Invesco, WisdomTree and VanEck. CBOE’s growing crypto clout is a key reason why it’s a top-10 holding in the Schwab Crypto Thematic ETF (NYSEARCA:STCE).
The Bottom Line
The world of cryptocurrencies is still in its infancy. There could be a lot more upside ahead but also the potential for significant volatility. That’s why larger-cap tech and financial stocks that have a little exposure to crypto but also own much larger and stable businesses probably make more sense as safer investments than the pure-play crypto companies that typically rise and fall as dramatically as Bitcoin prices do.
As of this writing, Paul R. La Monica did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.