To The Moon

$Coinbase Global, Inc.(COIN)$ $MARA Holdings(MARA)$ $Block, Inc.(XYZ)$

The cryptocurrency ecosystem has always been volatile, but 2025 has introduced a new wrinkle for investors: it’s not just the tokens themselves swinging wildly, but the performance of crypto-related stocks diverging in meaningful ways.

Some companies have surged alongside Bitcoin’s rally, while others have lagged, raising important questions for investors who want equity exposure to digital assets without directly holding tokens.

Even as the speculative “hype” around crypto-linked equities has cooled compared to 2021’s euphoric levels, many still believe that the crypto bull cycle is not yet finished, particularly under the political climate of Trump’s presidency. Supporters point to the administration’s perceived friendliness toward deregulation, which could extend the runway for digital asset growth.

But short-term risks are very real. One pressing example is BMNR (BitMiner), a publicly listed Bitcoin mining company, which faces a major lock-up expiration on September 2nd. With early shareholders gaining the ability to sell, investors are asking whether they should reduce exposure before potential selling pressure emerges.

This moment raises a broader question: what should investors really watch when selecting crypto stocks? Below, we break down the key considerations.

1. Correlation With Bitcoin Prices: The Core Driver

The most important thing to understand about crypto equities is that they are not all equally correlated with the price of Bitcoin (or other tokens).

• High-Beta Miners: Companies like Marathon Digital (MARA), Riot Platforms (RIOT), Hut 8 (HUT), and BitMiner (BMNR) are extremely sensitive to Bitcoin’s daily moves. Their revenues and margins rise or fall directly with the mining reward environment and the dollar price of Bitcoin. In a bull run, these stocks often outperform Bitcoin itself on a percentage basis. In a downturn, they can fall much harder.

• Exchanges & Custodians: Companies like Coinbase (COIN) are still exposed to crypto trading volume, but their revenue model also includes custody services, staking, and subscription-based income. As such, their correlation with Bitcoin is still strong, but not as extreme as miners.

• Fintechs with Crypto Integration: Firms like Block (SQ) and PayPal (PYPL) have integrated crypto into their payment ecosystems, but their revenues are not primarily dependent on crypto. This means they benefit from adoption trends without being fully tied to price swings.

Investor takeaway: Decide upfront whether you want a leveraged bet on Bitcoin (miners), or more diversified exposure (exchanges/fintech). Your risk tolerance should determine which category you focus on.

2. Business Models and Long-Term Sustainability

Not all crypto stocks are equal — the business model matters as much as the Bitcoin price.

• Miners: Mining companies earn revenue by solving cryptographic puzzles and adding blocks to the Bitcoin blockchain. Their profitability depends on three factors: the Bitcoin price, the network hash rate (competition), and electricity costs. The model is inherently cyclical and capital-intensive, requiring constant reinvestment in newer, more efficient mining rigs.

• Exchanges: Exchanges like Coinbase make money primarily from transaction fees. But trading volume plummets in bear markets, creating significant revenue volatility. This is why Coinbase has focused on diversifying into subscription products, custody services for institutions, and derivatives trading.

• Infrastructure Providers: Firms like Core Scientific and Hut 8 have begun to pivot into data center hosting and even AI-related computing. This diversification can help buffer against the volatility of mining alone.

• Fintech and Payments: Companies like Block and PayPal incorporate crypto into their broader financial ecosystems, but their revenues largely come from traditional payments and lending. This makes them more resilient to crypto downturns, though their stocks still move on sentiment.

Investor takeaway: Pure-play miners are the riskiest, but potentially most rewarding in bull runs. Exchanges and fintechs may provide a more balanced long-term risk/reward.

3. The Dilution Problem: Lock-Ups and Capital Raises

One of the least-discussed risks in crypto stocks is share dilution.

Mining companies in particular tend to issue shares aggressively to raise capital for equipment purchases and operational expenses. This dilutes existing shareholders over time.

• BMNR Example: With BMNR’s lock-up expiration on September 2nd, early investors and insiders will be allowed to sell shares for the first time since its IPO. Such events often trigger short-term price declines, especially if the unlocked shares represent a large percentage of free float.

• Historical Pattern: We’ve seen this before with companies like Marathon Digital, which raised capital repeatedly during 2021–2022. Investors who held long-term saw their percentage ownership diluted.

Investor takeaway: Always examine a company’s financing history. Check the size of upcoming unlocks relative to average daily trading volume. A high unlock ratio often leads to heavy selling pressure.

4. The Regulatory and Political Environment

The political environment cannot be ignored when investing in crypto equities.

• U.S. Regulation: The SEC has cracked down on unregistered securities and token offerings, but regulatory attitudes toward Bitcoin itself have softened with the approval of spot Bitcoin ETFs. Exchanges like Coinbase remain in the crosshairs over token listings, while miners face less direct regulatory pressure.

• Trump’s Impact: Many investors expect Trump’s term to bring lighter-touch regulation, which could benefit the sector. However, U.S. policy is only part of the picture.

• Global Regulation: Countries like the EU have adopted stricter frameworks around stablecoins, while China remains hostile to crypto mining. Any global regulatory changes can ripple into publicly listed crypto firms.

Investor takeaway: Crypto stocks are uniquely sensitive to political rhetoric. A single regulatory headline can move prices more than earnings reports.

5. Balance Sheets, Liquidity, and Resilience

A crucial factor that separates winners from losers in this space is financial resilience.

• Cash Position: Companies with strong cash reserves can weather downturns, invest in new technology, and avoid dilutive share offerings.

• Debt Levels: Many miners operate with high debt, which becomes unsustainable when Bitcoin prices fall. During bear cycles, heavily indebted miners are often forced to sell reserves at a loss or even file for bankruptcy.

• Operating Costs: Electricity and equipment are major costs for miners. Those with access to cheaper renewable energy sources (e.g., hydroelectric, wind) enjoy a meaningful cost advantage.

Investor takeaway: Always review the balance sheet. In a sector this volatile, liquidity and low leverage are the best insurance policies.

6. Market Sentiment and Institutional Flows

Crypto equities are momentum-driven, meaning sentiment often matters more than fundamentals in the short term.

• ETF Flows: The approval of spot Bitcoin ETFs has been a game changer, creating a new channel for institutional capital. When ETFs see strong inflows, crypto equities often rise in sympathy.

• Institutional Adoption: If pension funds, asset managers, or corporates allocate to Bitcoin, exchanges like Coinbase stand to benefit through custody and trading services.

• Social Sentiment: Retail enthusiasm on platforms like Reddit and X (Twitter) still plays a role in amplifying moves in smaller-cap crypto stocks.

Investor takeaway: Track not just Bitcoin’s price, but ETF inflows/outflows and institutional adoption metrics. These are leading indicators for crypto equities.

7. Case Studies: How Crypto Stocks Diverge

To better understand how crypto equities behave, let’s look at a few case studies:

Coinbase (COIN)

• Business Model: Exchange, custody, staking, and subscription services.

• Strength: Strong balance sheet, institutional relationships.

• Weakness: Still dependent on retail trading volumes; regulatory scrutiny remains high.

• Stock Behavior: High correlation with Bitcoin, but less volatile than miners.

Marathon Digital (MARA)

• Business Model: Pure-play miner, highly leveraged to Bitcoin price.

• Strength: One of the largest public miners by hash rate.

• Weakness: High energy costs and frequent share dilution.

• Stock Behavior: Acts like a leveraged ETF on Bitcoin.

Block (SQ)

• Business Model: Fintech with crypto integration (Cash App allows Bitcoin trading).

• Strength: Diversified revenues across payments, BNPL, and crypto.

• Weakness: Crypto is only a small fraction of revenue, so exposure is muted.

• Stock Behavior: Moves on fintech sentiment, with crypto being a secondary factor.

Lesson: Different crypto stocks offer different types of exposure. Investors should be intentional about which “bucket” they want: high-beta miners, medium-beta exchanges, or diversified fintech plays.

8. The BMNR Question: Exit Before Unlock or Hold Through?

With BMNR’s lock-up expiration approaching, the risk/reward is nuanced:

• Bearish View: A surge of insider selling could overwhelm daily volume, driving the stock lower. Traders may want to de-risk before September 2nd.

• Bullish View: If Bitcoin prices remain firm or rally, BMNR could still attract speculative inflows, making any post-lock-up dip temporary.

Prudent investors might consider trimming positions before the unlock and re-entering after volatility subsides. Long-term believers in BMNR’s cost advantage and mining efficiency may choose to hold, accepting short-term turbulence.

Final Verdict: A Framework for Investing in Crypto Stocks

Crypto equities are not buy-and-hold in the traditional sense. They require active monitoring of catalysts, risks, and sentiment.

When selecting crypto stocks, investors should prioritize:

1. Correlation with Bitcoin: Decide how much direct leverage to crypto prices you want.

2. Business Model: Understand whether the company is a miner, exchange, fintech, or diversified infrastructure player.

3. Financial Health: Favor cash-rich, low-debt companies that can survive downturns.

4. Dilution & Lock-Ups: Watch out for insider selling and frequent share issuance.

5. Regulatory Outlook: Track policy signals from Washington and abroad.

6. Institutional Adoption: ETF flows and custody demand are critical leading indicators.

7. Competitive Position: Assess cost advantages, technology, and market share.

Bottom Line: Crypto stocks offer extraordinary upside in bull markets but carry equally high downside risks. They are best suited for investors with strong risk tolerance and a disciplined approach.

For those who can manage the volatility, companies with solid balance sheets, diversified revenues, and strong institutional ties stand the best chance of surviving bear cycles and thriving in bull cycles.

In the case of BMNR, short-term caution is warranted ahead of the lock-up. But for the broader sector, the next leg of the crypto bull market — if it materializes — could still offer opportunities for those who choose their stocks wisely.