Hut 8 and Galaxy Digital Holdings

The cryptocurrency market is known for its dynamic and volatile nature. While cryptocurrencies can experience rapid growth followed by significant slumps, these market fluctuations can also present profitable opportunities. After the recent slump in 2022, major cryptocurrencies are now on a recovery path, making it an appealing time to consider investing in the market.

While cryptocurrencies offer the purest exposure to the market, they cannot be held in tax-deferred accounts like Tax-Free Savings Accounts. As an alternative, investors can tap into the crypto market recovery through crypto stocks.

Hut 8 is a crypto mining stock that provides direct exposure to the underlying crypto asset through its mining operations. With the acquisition of a U.S.-based miner, Hut 8 has expanded its mining facilities from two to six. In addition to mining, Hut 8 also offers high-performance computing services and data centers to various clients. The stock has closely followed the growth of Bitcoin and has seen impressive growth itself, with a 260% increase compared to Bitcoin’s 77% growth in 2023. While the stock is currently trending downward, another surge in Bitcoin’s value could have a positive impact on Hut 8.

Galaxy Digital Holdings operates with a different model, aiming to mainstream digital assets like cryptocurrencies. The company bridges the gap between traditional financial systems and digital assets, bringing conventional financial institutions into the fold. With about $2.5 billion worth of digital assets under management, Galaxy Digital Holdings continues to expand its presence in the market. Although its connection to the crypto market is not as strong as a miner’s, the stock still follows long-term market trends faithfully.

Both Hut 8 and Galaxy Digital Holdings experienced significant growth in 2023, but their current trading prices are a fraction of their 2021 peaks. While the chances of reaching those peak levels again in the near future may be low, potential gains could be substantial. Investing now could result in a four-fold growth for Hut 8 and at least a seven-fold growth for Galaxy Digital if the stocks rise to their 2021 highs.