Canadian crypto stocks offer investors exposure to the booming cryptocurrency markets.
Cryptocurrencies are digital currencies that are independent of traditional banking systems. They exist on a blockchain, a secure and immutable transaction record shared among many computer nodes in a network.
The most well-known cryptocurrency is Bitcoin, and the process of generating new Bitcoin units is called mining. When Bitcoin was new, it was easy enough for tech-savvy individuals to mine their own tokens using store-bought hardware. However, as Bitcoin has grown in popularity, mining has become a difficult and expensive process.
That’s why these days most mining is done at the industrial level. Large corporations with capital and the right equipment at their disposal can mine tens or even hundreds of Bitcoin every day. Buying shares of companies that mine crypto or provide crypto services is a way for investors to reap the potential benefits this industry has to offer without risking major losses.
1. SOL Strategies (CSE:HODL)
Year-on-year gain: 662.5 percent
Market cap: C$38.74 million
Current share price: C$0.61
Formerly known as Cypherpunk Holdings, the company rebranded itself to Sol Strategies on September 12. In 2024, the company shifted its focus exclusively to Solana and acquired significant holdings of the cryptocurrency. Its previous mission was to identify and invest in high-potential opportunities in blockchain and cryptocurrency technologies.
In addition to investing in projects on the Solana blockchain, Sol Strategies operates Solana validators.
On September 26, Solana’s valuation surged by nearly 7 percent, causing a subsequent increase in the company’s stock price of almost 60 percent.
Its momentum continued into October, and on October 15 the company announced ‘a significant increase in the amount of SOL delegated to the Company’s public validator for purposes of earning staking rewards on the Solana blockchain.’ Its share price jumped more than 70 percent over its previous close.
2. Bitcoin Well (TSXV:BTCW)
Year-on-year gain: 112.5 percent
Market cap: C$11.27 million
Current share price: C$0.85
Established in 2013, Bitcoin Well makes using bitcoin easy and accessible via an ecosystem of products and services offered through its two revenue-generating business units. The first is its Canada-wide network of Bitcoin ATMs, and the second is its online Bitcoin portal, which is live in Canada as of November 2022 and the entire United States as of February 2024.
Shares of Bitcoin Well reached a yearly high of C$0.25 on March 4 after it announced a record number of signups to its Bitcoin Portal in February, in addition to a brokered financing agreement with Haywood Securities.
More recently, the crypto firm reported its Q2 financials, highlighting revenues of C$23.3 million for the quarter, up 54 percent over the previous quarter. For the first half of the year, revenues came in at C$39.4 million, up 43 percent from the same period last year.
3. DMG Blockchain Solutions (TSXV:DMGI)
Year-on-year gain: 92 percent
Market cap: C$80.74 million
Current share price: C$0.48
DMG Blockchain Solutions is a vertically integrated blockchain and crypto company that helps users monetize the blockchain environment by delivering digital solutions like its Blockseer software platform, which allows traders to monitor and track their transactions on the Bitcoin and Ethereum networks.
Its business model consists of two segments, Core and Core+. Core focuses on crypto infrastructure operations, deriving its revenue from rewards and transaction fees, hosting services and hardware sales to industrial crypto miners. Core+ deals with data analysis and forensic services.
In its fiscal year Q3 report, DMG shared revenues of C$8.3 million, up 11 percent over the prior year. The company attributed the growth to a 5 percent increase in self-mining revenues. On October 4, DMG shared its preliminary results and updates for September, including the successful energizing of its Bitmain T21 mining fleet.
4. Bitfarms (TSX:BITF)
Year-on-year gain: 76.82 percent
Market cap: C$1.15 billion
Current share price: C$2.57
One of the largest Canadian Bitcoin miners, Bitfarms mines Bitcoin using state-of-the-art data centers powered in part by hydroelectricity and locally sourced natural gas. With 12 operating data centers and a hash rate of 11.3 EH/s, it produces an average of 8.2 bitcoin per day.
Bitfarm’s Q2 financial report released on August 8 highlights revenues of C$42 million, down 16 percent over the previous quarter and up 17 percent year-over-year. The company has ‘made significant progress expanding its geographically diversified portfolio, adding 220 MW of capacity in Paraguay and Pennsylvania,’ according to the press release. Later in August, Bitfarms announced a definitive merger agreement to acquire crypto asset management firm Stronghold Digital Mining (NASDAQ:SDIG).
In May 2024, after acquiring shares in Bitfarms, Bitcoin miner Riot Platforms submitted an unsolicited proposal to acquire all outstanding Bitfarms shares, which was rejected by the company’s board of directors. Riot then went public with its offer and launched a proxy fight, criticizing Bitfarm’s management and strategy. A shareholders meeting has been scheduled for November 6, 2024, to vote on Riot’s proposal.
However, on September 23, the two companies announced a settlement agreement. Under the terms of the settlement, former investment banker Amy Freedman was appointed to Bitfarm’s board of directors and Riot Platforms agreed to withdraw its requisition. The shareholders meeting may be delayed due to this event, but according to a press release it will take place no later than November 20.
5. Hut 8 (TSX:HUT)
Year-on-year gain: 26.46 percent
Market cap: C$1.47 billion
Current share price: C$16.25
Hut 8 is an energy infrastructure operator and Bitcoin miner. It operates data centers across North America and boasts self-mining, hosting and managed services. The company has formed partnerships with other companies in the blockchain and technology space.
An expansion of its partnership with digital currency mining server Bitmain Technologies was announced on September 19. The two companies are collaborating to build a miner that utilizes direct liquid-to-chip cooling technology, thereby improving efficiency without compromising performance.
Hut 8 plans to deploy these new miners at its Texas facility in Q2 2025, and will charge Bitmain a fee for the space and power. This deal gives Hut 8 early access to new technology and an alternative revenue source.
The company shared an update on its September operations on October 4.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.