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Where Will Crypto Stocks Go Next?

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Crypto stocks have had a strong month of August and continue to tick higher. Several factors have helped popularity return to the high-potential sector, and we are now seeing just how fast these digital coins and crypto stocks can rally.

The cryptocurrency industry may not be for everybody. But for most investors who want exposure to all this growth potential, there are various ways to gain exposure.

What you need to decide is what you want to invest in. For example, are you more bullish on the price of Bitcoin and Ether rising, or are you more bullish on the blockchain industry and all the possibilities?

Whichever you decide, there is a tonne of potential, as long as you’re willing to make a long-term commitment to the investment.

So if you’re bullish on crypto stocks, here are some of the best to buy for the long term.

The top stocks to buy if you’re bullish on Bitcoin or Ether

If you’re bullish on the most popular cryptocurrencies continuing to rally, the two main choices you have are ETFs or crypto mining stocks.

Buying an ETF like the CI Galaxy Ethereum ETF (TSX:ETHX.B) is the simplest way to go about it. Buying a fund like this gets you exposure directly to the price of Ether and its performance.

The fund buys, holds, and sells for you, which is especially valuable when it comes to cryptocurrency. So it’s a great way to invest in Ether without all the complications and with low transaction costs, which is also a significant benefit when it comes to many of the popular cryptocurrencies.

The one drawback of these ETFs — and why they don’t attract more investors — is that the growth potential of crypto mining stocks is far superior.

A stock like Hut 8 Mining, for example, is up more than 600% in the last 12 months compared to Bitcoin, the currency it mines, which is up a little over 300%.

And since the ETFs track the price of the currencies, it’s clear that if you’re bullish on these digital currencies and can stomach the risk, the growth potential of mining stocks is worth it.

The top crypto stock to buy if you’re bullish on the blockchain industry

If you’re more bullish on the blockchain side of things and all that the entire industry has to offer, there are plenty of crypto stocks to consider, and the number of these companies is only going to continue to grow.

There are several stocks now in the NFT space, for example. My personal favourite, though, is Galaxy Digital Holdings (TSX:GLXY).

Galaxy Digital is the top crypto stock to buy, in my opinion, for two main reasons. Since the stock has so many different operating segments, it offers a tonne of diversification and can weather plateaus in the crypto rally for prolonged periods.

However, these multiple segments also offer a tonne of growth potential, and the company has a prudent strategy to continue to grow its operations for decades.

In addition to some of its most popular businesses, such as offering investors the chance to gain exposure to Ether through the CI Galaxy Ethereum ETF, it also has a segment dedicated to venture capital.

Galaxy sources numerous high-potential deals while they are still early and offer huge potential. So you could buy an NFT stock exclusively, or you could buy Galaxy, which offers all its other segments, including mining operations, plus a venture capital arm that has recently invested capital in 14 different NFT-related companies.

Bottom line

While it’s impossible to know for sure where any stock is headed, especially in the crypto industry, there are many reasons to be bullish on both the currencies and the industry as a whole.

So while we may not know where crypto stocks are going in the very short run, over the medium and long term, I would expect them to continue to offer some of the best potential on the market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa owns shares of Galaxy Digital Holdings Ltd. The Motley Fool has no position in any of the stocks mentioned.

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