Despite the enduring scrutiny of the digital asset industry by U.S. regulatory establishments, shares of some of the crypto-related stocks such as Coinbase Global COIN, MicroStrategy MSTR, Riot Platforms, Inc. RIOT and Marathon Digital MARA have easily outperformed the price of Bitcoin (BTC) and other primary cryptocurrencies’ noteworthy rally so far in 2023.

Let’s see why:

Bitcoin Staging a Remarkable Rally This Year

Cryptocurrencies ticked up on Jul 20, with the price of Bitcoin increasing nearly 1% in 24 hours to $30,279. The price of the world’s numero uno cryptocurrency continues to hover between the psychologically vital $30,000 level and $31,000 over the past month.

The price of Bitcoin, incidentally, hit a 13-month high above $31,750 last week after market participants cheered Ripple-SEC Ruling. The federal court ruling didn’t accept a crypto token as a security. Rather it was acknowledged as a commodity, which is a positive ruling for the digital asset industry on the whole.

The price of the second-largest crypto, Ethereum (ETH), has also scaled upward. Similarly, the prices of meme coins such as Dogecoin (DOGE) and Shiba Inu (SHIB) spiked. Nonetheless, the price of Bitcoin has notched gains of nearly 80% so far this year, and it remains above the 200-day moving average, signaling a further upswing.

What’s Behind Bitcoin’s Stellar Rally?

The price of Bitcoin scaled northward, partly because of the Federal Reserve’s move to pause the interest rate hike in June. And with price pressures cooling for the 12th month in a row in June, it’s expected that the central bank will continue to be less aggressive in its monetary policies (read more: 5 Solid Stocks to Gain on Signs of Inflation Cooling Down).

Needless to say, a rate hike pause bodes well for high-risk assets such as digital coins and tech stocks. But most importantly, the price of Bitcoin rallied as large traditional financial institutions showed interest in the crypto space. While financial bigwig BlackRock urged regulators to create a spot Bitcoin ETF, Charles Schwab along with a few others, supported a new crypto exchange called EDX Markets.

Crypto Stocks That Outperformed the Bitcoin Rally

Interestingly, quite a few crypto-related stocks have outpaced the price of Bitcoin so far this year. An increase in the adoption of digital assets by institutional players helped shares of such crypto-related stocks tick higher. Moreover, these crypto-related stocks have higher volatility, or in other words, they tend to outperform when major tokens are in an upward trend and underperform in a downward trend.

Notable among them are the crypto exchange Coinbase and MicroStrategy, whose shares have gained a whopping 186.1% and 211.4%, respectively, in the year-to-date period.

Encouraging regulatory developments coupled with new deals with financial heavyweights boosted Coinbase’s share price, particularly over the last one-month period. Coinbase’s expected earnings growth rate for the current year is 78.1%. The Zacks Consensus Estimate for COIN’s current-year earnings has moved up 10.4% over the past 60 days. Coinbase has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

MicroStrategy, incidentally, holds more than $4 billion Bitcoin on its balance sheet. MicroStrategy’s expected earnings growth rate for the current year is almost 125%. The Zacks Consensus Estimate for MSTR’s current-year earnings has moved up more than 1000% over the past 90 days. MicroStrategy has a Zacks Rank #3.

Crypto mining stocks, for now, saw their shares jump immensely due to an uptick in transaction fees that improved their bottom lines. Additionally, mining firms outdid the price of Bitcoin by a huge margin due to the leveraged beta effect (read more: Bitcoin Mining Stocks Outdo BTC in H1: Will the Trend Last?).

Shares of crypto mining stocks such as Riot Platforms and Marathon Digital have surged a mindboggling 444.8% and 398.8%, individually, so far this year. Riot Platforms and Marathon Digital’s projected earnings growth rates for next year are 38.9% and 250%, respectively. The stocks, currently, have a Zacks Rank #3 each.

MicroStrategy Incorporated (MSTR): Free Stock Analysis Report

Marathon Digital Holdings, Inc. (MARA): Free Stock Analysis Report

Riot Platforms, Inc. (RIOT): Free Stock Analysis Report

Coinbase Global, Inc. (COIN): Free Stock Analysis Report

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