Bitcoin (BTC-USD) has surprised many investors with a rally increasing its price over 64% this year-to-date (YTD). Without a doubt, many investors missed the swift rally. However, if the crypto winter is coming to an end, there are more big opportunities ahead. A good way to gain exposure to the crypto industry without diving head first into the unregulated digital currency landscape is to consider some attractive crypto stocks to buy.

If the cryptocurrency industry continues to grow there will be significant benefits for crypto stocks. Cryptocurrency exchanges are an attractive investment option when taking into consideration that a bull market translates into higher trading and speculative activity. Similarly, Bitcoin mining stocks are poised to benefit as cryptocurrencies trend higher.

With these themes in mind, let’s discuss some undervalued crypto stocks to buy with multibagger return potential.

Coinbase Global (COIN)

Coinbase Global (NASDAQ:COIN) stock has surged by 90% YTD. If the rally for cryptocurrencies continues, COIN stock is positioned to deliver big returns.

As an overview, Coinbase is the second largest cryptocurrency exchange in the world. The exchange claims to have over 110 million verified users. It goes without saying that as trading activity increases, Coinbase will grow.

In 2021, Coinbase had $7.35 billion in revenue and $4 billion in adjusted EBITDA. This is an indication of the company’s cash flow potential in a bull market. Last year the company reported adjusted EBITDA losses, but the positive business developments that existed in 2021 have not gone away.

As an example, Coinbase reported healthy growth in subscription and services revenue. With a swelling list of institutional clients, it is likely that services revenue will keep growing. Additionally, blockchain rewards have contributed to growth in this segment.

Coinbase ended 2022 with cash and equivalents of $5.5 billion. The company has ample flexibility to pursue global expansion as the cryptocurrency bull market returns.

Riot Platforms (RIOT)

Among Bitcoin mining companies, I believe Riot Platforms (NASDAQ:RIOT) is best positioned to make it big. RIOT stock has surged by 259% YTD. However, I believe that the stock is still poised to go higher.

Riot’s strong balance sheet is a major reason to be positive. The company has zero debt and a cash buffer of $230 million. Additionally, they have over 7,000 Bitcoins to work with. This provides the company with high financial flexibility for aggressive expansion.

Another element that works in Riot’s favor is the fact that the company is a low-cost Bitcoin miner. Riot reported a Bitcoin gross mining margin of 52.6% in 2022. With Bitcoin starting to trend higher, I expect Riot to show healthy EBITDA margin expansion and cash flow upside.

Riot also invested in increasing its mining capacity throughout 2022. The company expects to boost capacity to 12.6EH/s in the coming months up from its current capacity of 9.8EH/s. Considering the balance sheet health, I expect additional expansions to be announced in the second half of 2023.

Block (SQ)

While Block (NYSE:SQ) was in a downtrend in 2022, the stock has remained sideways in the first few months of 2023. I believe that SQ is currently oversold and that a rally is on the horizon.

Originally called Square, the company rebranded to Block in December 2021. This change was designed to emphasize the company’s shift towards blockchain technology.

Block is building a decentralized finance business using Bitcoin. The company expects their flagship app called Cash App to lead the new business as it is already being used to buy and sell Bitcoin.

However, it’s likely that Block is aiming to oversee a much wider ecosystem that potentially includes its own blockchain. There are reports that Block is building its own open Bitcoin mining system. Additionally, the company’s CEO Jack Dorsey says he is planning to build a decentralized web platform based on Bitcoin. With Cash App acting as a money-making machine for Block, there is ample financial flexibility to invest in these new technology concepts.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.