Markets
Enter the Bitcoin Bull Market With These 3 Crypto Stocks
Bitcoin is the best-performing asset of the last decade, and its performance has shown little sign of slowing down – and some of the top cryptocurrency stocks are also in crisis.
Year to date, the world’s first and largest cryptocurrency is up almost 60%, gaining almost 150% in the last twelve months. Despite regulatory hurdles, the closure of cryptocurrency exchanges, and a brutal bear market, Bitcoin has scaled the proverbial “Wall of Worry” and is just a few thousand away from its all-time high of $73,798.
Looking ahead to the second half of 2024, Bitcoin and Bitcoin proxies should benefit from two major bullish catalysts, including:
Bitcoin Halving Fuels Record Gains
The Bitcoin “Halving” event takes place every four years and halves the number of newly “minted” Bitcoins. Bitcoin’s unique monetary policy separates it from central bank-issued currencies and makes it an attractive investment for many. Although central banks have no limit on how much they can inflate their currency, the supply of Bitcoin is limited. Historical price movements illustrate the benefits of halving. The first three halves produced gains of 9,133%, 281%, and 562% one year later!
Zacks Investment Research
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Institutional adoption grows with Bitcoin ETFs
A 13F is a disclosure required by the U.S. Securities and Exchange Commission (SEC) that companies with assets under management in excess of $100 million must file. This quarter, more than 600 institutions disclosed positions in spot Bitcoin ETFs, including a who’s who of blue-chip companies like JP Morgan (JPM), Wells Fargo (Wordfast), and Millenium (revealed a $2 billion position), to name a few.
Zacks Investment Research
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3 Crypto-Related Stocks to Buy Now
Coinbase (COIN)
Coinbase is the most prominent U.S. cryptocurrency exchange, earning the best possible Zacks Rank #1 (Strong Buy).
Milky cow
Seth Klarman is a legendary value investor, billionaire, and one of the most profitable money managers in the world. In an interview last year, Klarman stated that he avoids crypto but sees value in Coinbase, saying: “Coinbase has $5 billion in cash, has less debt than that, and is doing some smart things.” Well, now that number has grown to over 7 billion. I bring this to your attention because few people who trade stocks like COIN likely understand how fundamentally solid the company is.
Zacks Investment Research
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Coinbase Exceeding Street Expectations
On May 3, the leading cryptocurrency exchange announced earnings per share of $4.4, beating the Street estimate of $1.07. Here is an excerpt from the EPS transcript that caught my attention:“Our financial performance in the first quarter reflects our execution focused on product expansion, continued operational discipline and strong crypto market conditions. We generated US$1.6 billion in total revenue and US$1.2 billion in net profit*. Adjusted EBITDA was US$1.0 billion – more than we generated in all of 2023.” Lastly, we continue to promote regulatory clarity for crypto through grassroots advocacy, pushing for legislation, and ongoing efforts to seek clarity in the courts.”
The story continues
COIN has exceeded expectations for five consecutive quarters, and not only is it exceeding them, it is destroying them. Over the last five quarters, the average EPS surprise was 364.63%!
Zacks Investment Research
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Robinhood Markets (HOOD)
Zacks Rank #2 Stock (Buy) Robinhood (HOOD) is one of the most popular brokers in the United States. Robinhood was the first major brokerage to “democratize” trading by offering a commission-free investing app. The app rose to prominence during the wave of meme stocks that were spurred by retail investment groups on the social media platform reddit (RDDT) and included meteoric movements in actions such as GameStop (GME).
Bull Catalyst: Cryptography
HOOD recently added crypto-enabled trading. Although HOOD is late to the cryptocurrency game, the company has the perfect customer base to take advantage of the Bitcoin bull market.
Consistent positive EPS surprises
HOOD reported first-quarter earnings that beat Zacks Consensus Estimates by 260%. Over the past four quarters, positive earnings have become the norm, with an average earnings per share of 230%!
Record net deposits
Net deposits are one of the most important metrics for brokers to monitor. HOOD net deposits reached a record $11.2 billion in the first quarter, translating to an annualized growth rate of 44% and contributing to a 30% growth rate over the trailing twelve months. Meanwhile, CEO Vlad Tenev announced on May 14 that Robinhood had reached $5 billion in stock trading volume.
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Image source: Robinhood
Robinhood Gold is growing
Robinhood recently announced a new “Gold” credit card. HOOD has already gained a healthy 260,000 new subscribers.
Microstrategy (MSTR)
MicroStrategy has been around for years and is a leading provider of business intelligence software.
Adopting the Bitcoin standard
Former CEO and billionaire Michael Saylor caused a sensation on Wall Street a few years ago when he obtained the MSTR on the “Bitcoin Standard”. Instead of sitting on inflationary assets like the US dollar, Saylor realized that MSTR would be better off on a “Bitcoin candle”. Essentially, MSTR is a leveraged Bitcoin bet. The results speak for themselves – in the last five years, MicroStrategy has grown by more than 1,000%!
Zacks Investment Research
Image source: Zacks Investment Research
On the other hand, a good option for investors who do not want a leveraged bet, but want to take advantage of Bitcoin’s appreciation potential, is the iShares Bitcoin Trust (I BITE) ETF. IBIT has some of the lowest fees and highest liquidity of all Bitcoin ETFs.
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iShares Bitcoin Trust (IBIT): ETF Research Reports
(RDDT): Free Stock Analysis Report