Over the last decade, the cryptocurrency industry has seen several significant rallies. In most cases, though, these were short-lived, and there was a significant sell off that followed. Over the last two years, though, as we enter 2022, it’s a different story. Finding a top crypto stock could be the best investment of the year and possibly the rest of the decade.
The massive cryptocurrency rally started in 2020 after the significant sell off due to the pandemic. During the rebound, and especially during lockdowns, the industry got a major boost to its popularity and has since only continued to grow.
In 2020, even after cryptocurrencies initially sold off in the pandemic correction, the total cryptocurrency industry still gained more than 290%, but it wasn’t done there. Through 2021, while the industry had a lot more ups and downs, it finished the year with a total value of more than $2.2 trillion, meaning the industry grew by another 190% in 2021.
Besides the price increases of cryptocurrencies, though, the growth through 2021 is promising for another reason. It wasn’t just retail investors that have been increasing their investments and exposure to cryptocurrencies. It’s been large institutions and businesses too.
Whether it was Facebook renaming itself as Meta Platforms, a company like Shopify announcing merchants can now sell NFTs or even a company like Nike buying an NFT creator, companies continue to jump on the bandwagon. It’s clear that the crypto industry is not just here to stay, but offers incredible growth opportunities.
So, if you’re bullish on cryptocurrencies and looking for a high-quality stock to gain exposure, this is one of the best companies to consider.
Why Galaxy Digital could be the top crypto stock of 2022
These days there are several Canadian crypto stocks to choose from. In my view, though, Galaxy Digital Holdings (TSX:GLXY) easily offers investors the most growth potential. It will be one of the top crypto stocks, not just in 2022, but also over the long run.
Most crypto stocks are either mining companies or some form of exchange or platform that lets users buy cryptocurrency. While I do expect all of these stocks to benefit as the industry gains in popularity, I think Galaxy Digital has more potential than all of them.
For starters, Galaxy is such a unique business in that it faces very little competition. Crypto mining stocks are extremely competitive, and not just against each other. They are competitive with every single miner that’s trying to mine cryptocurrencies around the world.
In addition, crypto exchanges and platforms are also highly competitive. With so many to choose from, including fully decentralized exchanges, I believe investors can find better stocks to hold long term. That’s why I believe Galaxy Digital will be the top crypto stock, both in 2022 and beyond.
The company has five unique and high-quality segments, which diversify its business by adding resiliency, while also exposing investors to more growth potential.
What are Galaxy Digital’s five segments?
What’s most appealing about Galaxy Digital, in my opinion, is that each of its segments can benefit from the growth of the industry, which is why it should be the top crypto stock of 2022.
First, it has an asset management division that creates investment funds that allow investors to gain exposure to different cryptocurrencies. This is a division that should benefit as more retail investors look to gain exposure over the coming years.
Another high-potential segment Galaxy has is its trading division. Galaxy’s sell-side trading business offers market-making services as well as lending and structured products to institutional clients. It also engages in arbitrage and other macro trading strategies.
Galaxy also has an investment banking division, which offers general investment banking advice as well as advice on mergers and acquisitions. Furthermore, Galaxy even has its own mining segment.
Lastly, its principle investment division offers investors exposure to high-potential growth opportunities in the space. For example, Galaxy has invested in several up-and-coming NFT projects.
So, if you’re looking for a top crypto stock that can outperform in 2022 and beyond, Galaxy Digital is one of the best to consider.