A big catalyst could soon be coming for crypto investors. The Grayscale Bitcoin Trust (GBTC -0.10%) could become the first exchange-traded fund that gives investors exposure to Bitcoin. This comes after a judge recently sided with Grayscale in its lawsuit against the Securities and Exchange Commission, which blocked the company's attempt to convert the Grayscale Bitcoin Trust into an ETF.

The ETF could attract many new crypto investors and lead not only to a surge in the value of cryptocurrencies but also more trading activity. That can be great news for Block (SQ 0.45%)PayPal Holdings (PYPL -1.61%), and Coinbase Global (COIN 2.30%). Here's why they can benefit from this development.

1. Block

Block is a financial services company that makes it easy for vendors to process payments through its point-of-sale terminals. Through its Cash App, the company also makes it easy for people to buy, sell, and send Bitcoin. It's such a big part of Block's business that it now generates the most revenue for the company.

Through the first half of the year, Block generated $4.6 billion in Bitcoin revenue. That's up around 30% from a year ago, when it brought in $3.5 billion from that area of its business. And this year, it has accounted for more than 43% of its top line.

The downside for Block is that it's also costly as its year-to-date expenses related to Bitcoin total just under $4.5 billion. 

It may not generate huge profit growth for Block, but more transactions to process will definitely lead to more revenue growth for its business, and that could attract investors. A Bitcoin-focused ETF could be what helps give the stock a boost as Block is trading near its 52-week low.

There's some risk here as the business has incurred a loss in each of the past four quarters, but if you're bullish on crypto, Block could make for an underrated growth stock.

2. PayPal

Another place where you can buy and sell crypto is through PayPal. The company allows its users to trade other cryptocurrencies as well, including Ethereum and Litecoin. Even if the new ETF would be focused on Bitcoin, all cryptocurrencies could rise in popularity as a result.

The company doesn't break out crypto revenue, but as of the end of June, it held more than $1 billion in crypto assets on its books, which is 68% higher than the $604 million it reported a year ago.

On Aug. 7, PayPal also announced the launch of a stablecoin, PayPal USD, as it looks to extend its exposure to crypto.  It will be redeemable on a 1:1 basis for U.S. dollars, which could entice risk-averse crypto investors. 

PayPal generated a modest 7% growth last quarter when it reported sales of $7.3 billion for the period, ending June 30. More trading through its platform could help give its top line a much-needed boost. Trading near its 52-week low, PayPal could make for a good buy right now.

3. Coinbase Global

Coinbase operates a top cryptocurrency exchange, and it might see the most significant boost from an uptick in crypto trading. This year, it has been the hottest stock of the three listed here, achieving gains of 118% thus far (Block is down 7% while PayPal declined by 11%). 

The company generates revenue from transaction fees and subscriptions. Unlike the other stocks listed here, its success is most directly related to the success and popularity of cryptocurrencies. For that reason, it's a much riskier stock to hold -- but it also has more potential upside.

The business has been struggling through the first six months of 2023, however, as revenue of just under $1.5 billion was down 25% year over year. The positive is that its net loss during that stretch was $176.3 million, a small fraction of the $1.5 billion loss Coinbase incurred over the same period last year. 

Coinbase is a stock that's most suitable for investors with high risk tolerance. But even if you do invest, you should tread carefully with the stock as it's a volatile investment.