10 Most Profitable Cryptocurrency Stocks
In this article, we will take a look at the 10 most profitable cryptocurrency stocks. To skip our detailed analysis of the cryptocurrency stock market, you can go directly to see 5 Most Profitable Cryptocurrency Stocks.
The crypto market saw a prolonged decline in the prices of cryptocurrencies after 2021, which has been dubbed the “crypto winter”. However, despite hitting a bottom in 2022, cryptocurrencies have seen a big rebound in 2023. Between the start of 2023 and March 1, Bitcoin is up 40.1% while Ethereum is up 35.3%. Additionally, compared to its November low, Bitcoin has risen by more than 53%. Despite a strong correlation between crypto-exposed stocks and bitcoin, a number of crypto-exposed stocks, including Marathon Digital Holdings, Inc. (NASDAQ:MARA), Riot Platforms, Inc. (NASDAQ:RIOT) and CleanSpark, Inc. (NASDAQ:CLSK ) was in the red and analysts attribute this to bitcoin’s weakened relationship with the stock market compared to previous years.
The crypto market is also seeing a regulatory breach. According to a report by the Wall Street Journal, the Securities and Exchange Commission has been investigating violations of investor protection laws by various currencies. The SEC has already reduced the power of some intermediaries that offer cryptocurrency lending services. Coinbase Global Inc (NASDAQ:COIN), is one of the companies that has revealed it is being investigated by the SEC, and Forbes predicts that these will make it harder for crypto exchanges to keep their customers’ crypto assets safe.
Despite this, some crypto markets still have long-term growth potential. According to Blaxberg, there will be a big psychological boost for crypto investors when Bitcoin reaches $25,000 as projected. According to Coin Telegraph, venture capitalist firms have also provided investments worth $14.2 billion in the first half of 2022. While the pace of investment slowed in the second half of 2022 due to the crypto winter, analysts predict that it will increase again as the values of cryptocurrencies recover.
With the rise of the digital realm, which was further boosted by the Covid-19 pandemic, there seems to be enormous potential for investing in the digital space. Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL) are all companies that have invested heavily in the crypto market.
Photo by Austin Distel on Unsplash
Now let’s take a look at the 10 most profitable cryptocurrency stocks.
Our methodology
For our shortlisting, we looked at all the major cryptocurrency companies in the world by market capitalization and revenue. We then looked at the net income for the trailing twelve months for all these companies and the top ten companies were selected. They are ranked on the basis of this income, from lowest to highest net income (TTM). We’ve also used Insider Monkey’s hedge fund data for the fourth quarter, when we tracked 943 hedge funds, to demonstrate the popularity of these stocks among elite funds.
10 Most Profitable Cryptocurrency Stocks
10. Coinbase Global Inc (NASDAQ:COIN)
Trailing twelve month net income: -$2.6 billion
Number of hedge fund owners: 27
Coinbase Global Inc (NASDAQ:COIN) is a financial and computer company based in Wilmington, Delaware. The company provides financial infrastructure and technology for the US and international crypto-economy.
Oppenheimer’s Owen Lau has an Outperform rating and a $84 price target on Coinbase Global Inc (NASDAQ:COIN) shares as of February 22.
As one of the largest pure-play crypto companies today, Coinbase Global Inc (NASDAQ:COIN) has about $153 million in Bitcoin as of March, according to CoinGecko. The company suffered significantly during the last crypto winter, but it remains one of Wall Street’s favorite crypto stocks today. Average analyst price target on Coinbase Global Inc (NASDAQ:COIN) shares as of March 4 is $59.10, with a high forecast of $100. This shows the potential of the company as the crypto economy continues to improve.
Coinbase Global Inc (NASDAQ:COIN) was found among the 13F holdings of 27 hedge funds in the fourth quarter. Their total stake was $575 million. ARK Investment Management was the largest shareholder in the company, with 9.2 million shares.
Coinbase Global Inc (NASDAQ:COIN), like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL) is a company set to revolutionize the digital currency sector.
9. MicroStrategy Incorporated (NASDAQ:MSTR)
Trailing twelve month net income: -$1.5 billion
Number of hedge fund owners: 18
MicroStrategy Incorporated (NASDAQ:MSTR) is an application software company based in Tysons Corner, Virginia. It owns the largest amount of Bitcoin on its balance sheet, with a value of up to $2.2 billion in March.
Canaccord’s Joseph Vafi has a Buy rating on MicroStrategy Incorporated (NASDAQ:MSTR) shares as of February 3. The analyst also raised his price target on the stock from $372 to $400.
MicroStrategy Incorporated (NASDAQ:MSTR) co-founder Michael Saylor is among the most bullish Bitcoin investors today. As a result, the company has added to its Bitcoin stake through 2022, ensuring that when the cryptocurrency soars again, MicroStrategy Incorporated (NASDAQ:MSTR) will be among the biggest benefactors of the upswing. Analysts have an average price target of $255 on the stock, and expect a 3.28% upside on the company’s stock.
Our hedge fund data for the fourth quarter shows 18 funds long MicroStrategy Incorporated (NASDAQ:MSTR), with a total holding of $49.6 million.
Investment management firm Bireme Capital mentioned MicroStrategy Incorporated (NASDAQ:MSTR) in its Q2 2022 investor letter. Here’s what the firm said:
“We also remain short MicroStrategy, a mid-sized business analytics software company that made a giant bet on Bitcoin at the height of the hype cycle — losing over a billion dollars in the process. Now the company will need all of its cash flow from the business just to pay off the interest payments on the huge debt load, leaving no earnings for shareholders. Despite shares down over 60% for the year, the company continues to trade at a significant premium to the value of its assets. For more details on our thesis, please see our blog post here, as well as the Forbes and Fortune write-ups showing our short position.”
8. Block, Inc. (NYSE:SQ)
Trailing twelve month net income: -$540.7 million
Number of hedge fund owners: 70
Block, Inc. (NYSE:SQ) is a data processing and outsourced services company based in San Francisco, California. It is heavily involved in the crypto sector, operating an online digital and mobile payment platform for consumers and merchants.
Baird analyst Daving Koning reiterated an outperform rating and $92 price target on Block, Inc. (NYSE:SQ) shares on March 1.
In the third quarter, Block, Inc. (NYSE:SQ) had approximately $1.76 billion in Bitcoin revenue in its Cash App unit. The company itself is also heavily invested in this cryptocurrency, holding around $136 million in Bitcoin as of March. Analysts are very bullish on the stock’s potential as the crypto winter thaws, keeping an average price target on Block, Inc. (NYSE:SQ) at $97.35. Wall Street expects a 20.36 % upside potential on the company’s stock as of March 4.
There were 70 hedge funds long Block, Inc. (NYSE:SQ) in the fourth quarter. Their total stake was $4.3 billion. ARK Investment Management was also the largest shareholder in this company, with over 9 million shares.
7. Riot Platforms, Inc. (NASDAQ:RIOT)
Trailing twelve month net income: -$373.2 million
Number of hedge fund owners: 12
Riot Platforms, Inc. (NASDAQ:RIOT) is an application software company based in Castle Rock, Colorado. The company is engaged in bitcoin mining in North America.
On February 21, Needham’s John Todaro initiated coverage of Riot Platforms, Inc. (NASDAQ:RIOT) shares with a Buy rating.
Wall Street analysts see upside potential of 51.42 % on Riot Platforms, Inc. (NASDAQ:RIOT) shares as of March 4. The average price target on the stock is $9.6, with a high forecast of $12. The company stands to profit immensely from the mining of Bitcoin, as it has about 6,897 BTC holdings as of January, which equates to about $117 million in liquidity at the time. Analysts thus see Riot Platforms, Inc. (NASDAQ:RIOT) outperforming due to its heavy investment in Bitcoin.
Of the 943 hedge funds tracked by Insider Monkey in the fourth quarter, 12 hedge funds were long Riot Platforms, Inc. (NASDAQ:RIOT), with a combined holding of $9.7 million.
6. Marathon Digital Holdings, Inc. (NASDAQ:MARA)
Trailing twelve month net income: -$268.5 million
Number of hedge fund owners: 14
Marathon Digital Holdings, Inc. (NASDAQ:MARA) is a digital assets company based in Las Vegas, Nevada. The company focuses on the blockchain ecosystem and the generation of digital assets in the United States.
A Buy rating was reiterated on Marathon Digital Holdings, Inc. (NASDAQ:MARA) shares on January 12 by analyst Christopher Brendler at DA Davidson.
As of the third quarter, Marathon Digital Holdings, Inc. (NASDAQ:MARA) had about 69,000 active Bitcoin miners. It has about 10,054 Bitcoins in March, worth $171 million. The company has reported that mining a single Bitcoin costs about $6,200, which represents the potential profitability of Marathon Digital Holdings, Inc.’s (NASDAQ:MARA) business.
Marathon Digital Holdings, Inc. (NASDAQ:MARA) had 14 hedge fund long shares in the fourth quarter. Their total stake was $7.4 million.
Horizon Kinetics LLC, an independently owned and operated investment advisor, mentioned Marathon Digital Holdings, Inc. (NASDAQ:MARA) in its Q1 2022 investor letter. Here’s what the firm said:
“Investors also tend not to give sufficient credit to management’s power to improve or create additional value with such an asset. Commercializing land requires significant management skills. This particular transaction involves two other parties who will build and operate up to 60 megawatts of bitcoin -mining, which was stated could accommodate up to 2.0 Exahash of operational capacity. That’s quite significant. As a point of reference, Marathon Digital Holdings (NASDAQ:MARA), which has a market capitalization of $1.0 billion, even after a 70% year-to-date decline, had capacity of about 3.6 EH/s at the end of 2021, though it expects to reach 13.3 EH/ say during this calendar year. The TPL venture is expected to start operations in the fourth quarter of this year.”
Marathon Digital Holdings, Inc. (NASDAQ:MARA), like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL) are trying to tap into the potential of cryptocurrency.
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Dissemination: No. 10 Most Profitable Cryptocurrency Stocks is originally published on Insider Monkey.
