The future of cryptocurrency seems more evident now. Bitcoin (BTC) and its counterparts are getting approval across the globe—more than ever before. Crypto stocks are getting more and more attention these days.
Cryptocurrency stocks have become a way for many investors to gain exposure to digital currencies. Crypto stocks are best for those who are ambiguous about crypto coins. But, let us clarify for you, investing in stocks related to cryptocurrencies can be pretty risky.
Besides, crypto stocks have given considerable rewards to their holders. You need to be patient enough to earn that. With high risk, there is always a higher reward. Moreover, things for the crypto industry are getting better every passing day. According to ‘The Wall Street Journal,’ the Federal Reserve will be releasing a paper exploring the use of central bank digital currencies in the U.S. economy.
The first crpto stock to buy in the list of best crypto stocks to buy is COIN. Coinbase (COIN) is one of the leading cryptocurrency exchanges in the world. Coinbase stock has whipsawed since its direct listing earlier this year. The reference price for the direct listing was $250, and the COIN stock went as high as $429.54. However, it soon plummeted below $250.
It has recorded impressive second quarter 2021 results, mainly due to the higher volume of cryptocurrencies on the exchange. The revenue increased to $2.03 billion in the quarter from $1.6 billion in the previous quarter. The monthly transacting users increased to 8.8 million from 6.6 million in the last quarter.
Coinbase has institutional ownership of 28.40%, and the institutional transactions of COIN stock have increased by 265% in the last 3-months. Analysts are highly bullish on the stock, and COIN has an average target price of $385.95.
JMP Securities has initiated the COIN stock to outperform with a price target of $300. As per the analyst’s poll conducted by CNN Business, 17 out of 21 rated COIN stock as a buy. At the same time, Goldman Sachs reiterated it as a buy and believed that if the regulatory environment improves further, things would be much better for Coinbase.
Coinbase is the second-largest crypto exchange by volume after Binance. The majority of the userbase of the exchange is in the U.S. COIN has a solid base that will support the stock in the long-term growth.
Riot Blockchain (RIOT) is a pure-play crypto firm that operates in cryptocurrency mining. Simultaneously, RIOT has developed an internal business and targets other investments in the crypto sector. With the current strategy, the company is focused on low-cost mining production. The target is to become one of the largest low-cost producers of Bitcoin in North America.
In August, Riot reported its second-quarter earnings. Just like other counterparts, Riot posted increased mining revenue to a record $31.5 million. That’s a whopping 1540% rise year-over-year. 2021 has been a good year for the crypto industry, and the adoption is growing each passing year.
If we talk about the RIOT stock, its current price is around a major support region, between $21 to $25. As the quarterly numbers suggest, the company has performed astonishingly this year. With that, Riot stock has soared by 781.57%. However, in the second half of the year, RIOT hasn’t impressed much. A downward trend was probable after such a pump. In comparison, other stocks have performed relatively well. For the half-year, the stock is down by 49.87%, which creates an upside potential.
The other fundamentals are strong; the current ratio is 5.90, which is pretty good. If we look at the long-term, the last 5-year sales are up by 160.10%. And, the quarterly sales have increased by a staggering figure of 1668.70%. The increase is driven by higher mining production capacity.
With all the factors in mind, RIOT stock can really give its holders massive returns in the long run. At the same time, the near-term average price target is around $44.
Marathon Patent Group
Marathon Patent Group (MARA) is a prominent Bitcoin miner and a holding company that is a parent of Uniloc. MARA stock has skyrocketed over 1,700% this year so far with the surge in bitcoin prices.
Just like Riot Blockchain, Marathon Patent Group is also expanding its mining business. Earlier in 2021, MARA raised around $200 million to support its expansion projects. The company will invest further in mining and purchase more bitcoin mining machines to increase production.
MARA produced 1,252.4 new-minted bitcoins during Q3 2021. That is 91% higher production over the previous quarter. As of October 1, 2021, Marathon’s mining fleet has produced approximately 2,098 newly minted bitcoins in 2021. As a result, the company currently holds about 7,035 BTC. That includes the 4,812.66 BTC MARA purchased in January 2021 for an average price of $31,168 per BTC.
In the stock fundamentals, the current ratio is 147, which is impressive in the short term. Moreover, the long-term liability is also pretty low compared to the total assets owned. The sales in the past five years are -25.50%, which might worry you for long-term growth. But MARA has covered its basics pretty well. With the increasing production, the company will soon break even on sales.
When MARA stock peaked in April 2021, most of the insiders sold the stock. The insiders sold almost $39.8 million worth of shares, indicating that they didn’t want the stock price to be overweight. In that case, it is a good sign for investors from the long-term growth perspective.
CME Group (CME) is the largest financial derivatives exchange in the world. In 2020, with the surge in Bitcoin prices, CME became the biggest bitcoin futures trading platform, which led CME to record trading volumes. With that, CME becomes a prominent crypto stock in the market.
The increasing derivative trades in cryptocurrencies are great for CME. On October 4, 2021, CME reported third-quarter and September 2021 market statistics. In Q3, the average daily volume increased 14% to 17.8 million contracts and increased 11% to 18.8 million contracts during September 2021.
The Bitcoin futures average trading volume during the third quarter soared by 170%. While, in September, the micro-Bitcoin futures reached an average daily volume of 21,000 contracts, including over 2.1 million total contracts since their May 3 launch.
The CME stock has performed well this year following all the success with future trades of Bitcoin and other cryptocurrencies. The stock is up by almost 20% this year so far. CME’s return on equity is 1.30%, return on assets is 7.20, and return on investment is 6.80, which looks fair. The RSI is almost 60, which shows that CME is trading around its resistance zone.
Atlantic Equities have upgraded their rating on the stock from neutral to overweight, with a price target of $230. The average price target is $221.47. The long-term prospects look suitable for CME stock as the futures crypto trades are expected to grow in the coming years.
The last cryptocurrency stock in the list of crypto stocks is PYPL. PayPal Holdings (PYPL) is the last crypto stock on our list for the top five crypto stocks with substantial long-term growth potential. In Oct. 2020, PayPal entered the cryptocurrency space as it allowed users to hold and make transactions with digital coins.
In Nov. 2020, a survey held by Mizuho Securities with 380 participants showed that 17% of users had already used PayPal to buy and sell cryptocurrency. As per Statista, the overall payment volume on PayPal was over 311 billion in the second quarter of 2021. That represents a 41% year-on-year growth.
The fact that PayPal is a very convenient and reliable payment transferring platform, the number of cryptocurrency users will increase in the coming time.
PayPal has taken the game to the next level as the financial services company now offers a digital wallet for merchants. PayPal will provide all its features through its new PayPal personalized app. That includes new features like PayPal Savings alongside new in-app shopping tools. That will attract more crypto users to the PayPal app with an easy-to-use interface and improved services.
The fundamentals of PayPal stock look promising. The total institutional ownership is around 82.40%, which shows investors’ trust in the stock. The sales in the past five years have grown by 19%.
Analysts are highly bullish on the stock. Famous analyst firms Piper Sandler and Morgan Stanley, have an overweight rating for the stock, with a price target of $300 – $315 and $337 – $340, respectively. With growing crypto adoption, PayPal will drive more volume. In that regard, we can see PYPL being one of the favorite crypto stocks.