Since the beginning of the 20th century, stocks have delivered the highest average annual return among popular investment vehicles, such as bonds, gold, and other commodities. But over the short term, cryptocurrencies have lapped the stock market many times over.

Leading the charge is Bitcoin (BTC -0.67%). The world's largest digital currency by market cap has increased in value from $0.0008 (that's eight-hundredths of a penny) at the beginning of July 2010, to a peak of more than $68,000 per coin. For those of you keeping score at home, Bitcoin has delivered a greater than 8,000,000,000% return since its debut.

However, this surge in cryptocurrencies -- specifically Bitcoin -- is also fueling growth for select companies. According to consensus estimates from Wall Street, the following three Bitcoin stocks are expected to deliver jaw-dropping sales growth ranging from 522% to as much as 21,551% over the next three years.

A gold-colored physical Bitcoin stood on its side in front of a digital crypto chart.

Image source: Getty Images.

Coinbase Global: Consensus sales growth of 522% by 2023

Perhaps it's no surprise that one of the fastest-growing companies on the planet over the next three years is leading cryptocurrency exchange and ecosystem Coinbase Global (COIN -2.87%). After recording $1.28 billion in sales in 2020, Wall Street is looking for Coinbase to top $7.9 billion in sales come 2023. This works out to a 522% increase in revenue in just three years.

Bitcoin and Ethereum account for most of Coinbase's trading revenue. The company is essentially counting on social media buzz to drive new and existing customers to buy or trade Bitcoin. Considering that Coinbase has 7.4 million monthly transacting users (MTU) in the third quarter, which is more than triple last year's MTUs, the company appears to be doing a good job of courting new investors. 

Coinbase is likely also getting a boost from Bitcoin being legitimized, in some capacity. In September, El Salvador became the first country to officially legalize the world's leading cryptocurrency as tender. If businesses become more accepting of Bitcoin, and governments are more tolerant of its use, demand for Bitcoin could grow.

However, I'd be remiss if I didn't point out that Coinbase is facing numerous challenges. For instance, the barrier to entry in the crypto brokerage space is virtually nonexistent. Even though Coinbase is the clear crypto leader in verified users (73 million) and assets ($255 billon held on its platform), it wouldn't be difficult for a competing exchange to undercut the fees Coinbase charges. This fee competition is ultimately what led to zero-commission trading with traditional stock brokerages.

Furthermore, since most cryptocurrency investors are young or new to the investing realm, they could be in for a surprise next year when they learn about wash-sale rules or have to pay tax on their capital gains. This could adversely affect trading frequency in 2022.

While Coinbase is slated for incredible growth through 2023, it doesn't appear to have a moat that would command a premium valuation.

A row of graphics processing units used to mine cryptocurrency.

Image source: Getty Images.

Riot Blockchain: Consensus sales growth of 5,057% by 2023

Another Bitcoin stock expected to deliver eye-popping sales growth over the next three years is cryptocurrency miner Riot Blockchain (RIOT 3.19%). Following the roughly $12 million the company reported in sales last year, Wall Street is looking for Riot to hit $623 million in full-year revenue by 2023. That's just your run-of-the-mill 5,057% increase in sales.

For those unfamiliar, cryptocurrency mining involves a person or business using high-powered computers to solve complex mathematical equations that validate groups of transactions (i.e., a block) on a digital ledger, known as a blockchain. The first user to validate a block receives a block reward, which for Bitcoin is 6.25 tokens. This equates to almost $400,000 in value per block reward.

For crypto miners like Riot Blockchain, both size and efficiency matter. The company has been a busy bee in 2021, in terms of ordering mining equipment. In April, the company announced a $138.5 million order for 42,000 S19j Antminers, and recently added a $54 million order for 9,000 S19j Pro miners. The expectation is Riot Blockchain will have all 90,150 of its miners up and running by the fourth quarter of 2022. 

The company is also spending aggressively on deploying immersion-cooling technology. Riot notes that immersion-cooled miners operate more efficiently, which means better production and a greater likelihood of beating others to the punch when it comes to earning Bitcoin block rewards.

While this might sound like a slam-dunk investment idea, Bitcoin miners might be the worst way to invest in the world's top digital currency. For instance, companies like Riot are almost entirely dependent on external factors, rather than innovation.

Additionally, Bitcoin block rewards halve every four years. Unless the price of Bitcoin continues to soar, return potential will decrease over time.

An ASIC cryptocurrency mining farm lit by dim background lights.

Image source: Getty Images.

Marathon Digital Holdings: Consensus sales growth of 21,551% by 2023

The crème-de-la-crème of expected revenue growth among Bitcoin stocks comes from Marathon Digital Holdings (MARA -1.53%), which is another cryptocurrency mining company. With full-year sales expected to skyrocket from about $4.4 million to $944 million in just three years, Marathon will actually be sprinting to 21,551% aggregate revenue growth.

The expansion strategy for Marathon Digital and Riot Blockchain is similar, save for two points. First, whereas Riot expects to cap its miner fleet at 90,150 units by the fourth quarter of 2022, Marathon Digital will have a larger fleet of miners deployed by roughly the midpoint of next year. Marathon's fleet will consist of a little more than 133,000 miners, more than 42,000 of which have been received and are awaiting deployment. According to the company, it began chartering planes in October to help mitigate some logistical issues that have affected deliveries worldwide.

The second key difference between these two companies is that Marathon also directly acquired Bitcoin as an investment. Although both companies hang on to the Bitcoin they mine, Marathon made a $150 million investment in January that netted the company 4,812.6 Bitcoin (about $31,168 per token). With Bitcoin doubling in value since this purchase, Marathon is sitting on an unrealized gain of around $150 million.

But even with its larger fleet and beefed up balance sheet that holds 7,453 Bitcoin (as of Nov. 1), Marathon is facing a number of hurdles that could derail its business. In addition to the halving of Bitcoin block rewards every four years, there's also no barrier to entry in the crypto mining space. In short, competition is steadily increasing as block rewards push lower over time.

With Marathon riding Bitcoin's coattails, rather than relying on innovation like a traditional business, it looks to be a very risky investment.