Bitcoin briefly surpassed the US$100,000 milestone last week, which means the world’s largest cryptocurrency has more than doubled in the last 12 months. With a market cap of US$2 trillion, Bitcoin is the seventh-largest asset globally.
Bitcoin is a digital asset that has created massive wealth for shareholders over the past 15 years. However, cryptocurrency is still at a nascent stage, given that mainstream adoption might still be a few years away. There is a good chance for BTC prices to move higher over the next 12 months, especially if the Donald Trump administration supports crypto-friendly policies.
Considering these factors, here are two stocks you can hold instead of Bitcoin in 2025 to benefit from outsized gains.
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Coinbase stock
Valued at US$86 billion by market cap, Coinbase (NASDAQ:COIN) is the world’s second-largest cryptocurrency exchange. The company’s revenue growth is tied to the price of Bitcoin, as Coinbase generates most of its sales from fees and commissions.
Elevated trading volumes amid bull markets will result in strong revenue and earnings growth. For instance, Coinbase increased its revenue from US$1.14 billion in 2020 to US$7.34 billion in 2021. As sentiment turned bearish, its sales fell to US$3.14 billion in 2022 and US$2.92 billion in 2023.
Over the years, Coinbase has expanded its offering, which has helped it diversify its cash flows. In the last 12 months, Coinbase reported revenue of US$5 billion, US$2.96 billion of which was tied to transaction revenue. The rest was generated from blockchain rewards, interest and finance fee income, custodial fees, and stablecoin revenue. Its subscription and services revenue totalled more than US$2 billion in the last four quarters, up from US$20 million in 2019.
Like other trading platforms, Coinbase’s asset-light model allows it to benefit from high operating leverage. Analysts tracking COIN stock expect earnings to increase from US$0.37 per share in 2023 to US$5.33 per share in 2024. Moreover, its free cash flow is forecast to grow from US$847 million in 2023 to US$2.1 billion in 2024. Valued at 40 times forward free cash flow, Coinbase stock trades at a lofty multiple supported by strong growth prospects.
MicroStrategy stock
Valued at a market cap of US$83.55 billion, MicroStrategy (NASDAQ:MSTR), provides enterprise analytics software and services globally. However, it is the largest institutional holder of Bitcoin and is viewed as a proxy for the cryptocurrency. While BTC prices have gained 132% since December 2023, MSTR stock is up 587%.
MicroStrategy owns 402,100 BTC, purchased at an average price of US$58,263. At current prices, its Bitcoin value is around US$40 billion.
According to MicroStrategy chief executive officer Michael Saylor, BTC prices could surpass US$13 million by 2045. This would make MicroStrategy’s current Bitcoin balance worth US$5 trillion, making it one of the most valuable companies in the world.
MicroStrategy continues to raise additional capital via debt and equity to increase its Bitcoin balance over time. It recently disclosed plans to invest US$42 billion in Bitcoin through 2027, making it an enticing investment option right now.
The Foolish takeaway
Investing in Coinbase and MicroStrategy is a good option for those with a higher risk appetite. Historically, Bitcoin has traded in a four-year bull-bear cycle, and the current bull run is forecast to end around November 2025, providing investors with the opportunity to beat the broader markets in the next 12 months.
