11 Most Undervalued Blockchain Stocks to Buy According to Hedge Funds
In this article, we’ll take a look at the 11 most undervalued blockchain stocks to buy according to hedge funds. To see more such companies, go directly to 5 Most Undervalued Blockchain Stocks to Buy According to Hedge Funds.
Cryptocurrencies and crypto stocks started 2023 on a positive note. While many analysts claim that we are now seeing the end of the crypto winter, some say that this is a bear market rally and that the crypto bear market is far from over. Bear market or not, one thing everyone agrees on is that blockchain and decentralized finance will have a key role to play in financial transactions in the future. While many cryptocurrencies can be speculative in nature, blockchain is free from all such speculative impurities as it is a technology that powers cryptocurrencies, networks and much more.
As a report by Seba Bank noted, the collapse of the crypto markets in 2022 was due to economic reasons, not technological ones.
“Although 2022 is a crisis year for the cryptoverse, the root of the crisis is financial, not technological. This is a financial crisis because poorly designed cryptocurrencies collapsed and poorly managed CeFi went under. This is not a technological crisis as blockchains continue to function smoothly. In the case of bitcoin, a block is added on average every 600 seconds, regardless of price level and market stress. This crypto winter is the third since the invention of Bitcoin. The technology is battle tested and is solid. There is no reason to believe that this time is different and that bitcoin & co will not strengthen again.”
But the decentralized finance area was also hit in 2022 when investors cut back on spending in the sector and funding dried up. According to a research report published by The Block Research, the total value locked in DeFi in 2022 fell to $42.1 billion from $166 billion in 2021. This shows a decrease of around 75%. The report said that decentralized exchanges and lending platforms were the hottest sub-segments of DeFi in 2022. The biggest slowdown in the industry was felt when the Terra ecosystem collapsed.
As you will see in this article, major banks, including Bank of America and JPMorgan, are investing heavily in blockchain technologies to allow users to solve important problems in the financial space.
blockchain
SEC’s crackdown on crypto?
As for the latest developments, cryptocurrencies are diving after regulators in the US appear to be preparing for a crackdown on several digital coin companies. Earlier this month, crypto firm Paxos said it will stop issuing new Binance USD, or BUSD, stablecoins under the direction of the New York state financial regulator.
The SEC also settled with crypto exchange Kraken over allegations of unregistered offers and sales.
Some analysts believe that the latest breakdown effects may also spill over into the DeFi industry. According to a Bloomberg report, Binance-sponsored BNB Chain, which has the most BUSD usage in DeFi, may be affected amid the latest developments. The report quoted Andrew Thurman, a researcher at Nansen, a blockchain analytics platform, who said the following:
“The entire ecosystem will likely have to pivot to another stablecoin as its primary source of liquidity.”
Nevertheless, there are several blockchain companies that have long-term growth potential and could rebound strongly as the market gains more clarity about crypto and related technologies.
Our methodology
For this article, we first scanned Insider Monkey’s database of 920 hedge fund holdings and picked at least 30 stocks that were either pure blockchain stocks or had direct or indirect investments in the blockchain or crypto space. After that, we selected 11 of those stocks that had a PE ratio below 20 or a price/book ratio of less than 1, as of 8 February.
Most undervalued blockchain stocks to buy according to hedge funds
11. HIVE Blockchain Technologies Ltd. (NASDAQ:HIVE)
Number of hedge fund owners: 1
P/E ratio (TTM): 4.42
Canada-based HIVE Blockchain Technologies Ltd. (NASDAQ:HIVE) claims to be the first publicly traded blockchain infrastructure company. HIVE Blockchain Technologies Ltd. (NASDAQ:HIVE) has a PE Ratio (TTM) of 4.42 as of February, 8, according to Yahoo Finance. It ranks 11th on our list of the most undervalued blockchain stocks to buy now.
Earlier this month, HIVE Blockchain Technologies Ltd. (NASDAQ:HIVE) that they produced 260 Bitcoin in January, in addition to $180,000 in net balancing revenue, and a current BTC HODL balance of around 2,430 Bitcoin mined with green energy. HIVE Blockchain Technologies Ltd. (NASDAQ:HIVE) said monthly production in January was almost flat compared to a year earlier.
In December 2022, HIVE Blockchain Technologies Ltd. produced (NASDAQ:HIVE) 213.8 Bitcoins from ASIC and GPU mining in December 2022, compared to 264 produced in November 2022.
10. Bitfarms Ltd. (NASDAQ:BITF)
Number of hedge fund owners: 3
P/E ratio (TTM): 8.21
Toronto-based Bitfarms Ltd. (NASDAQ:BITF) is another crypto stock that is gaining a lot of value in 2023 amid the broader positive sentiment in the crypto market. Bitfarms Ltd. (NASDAQ:BITF) has gained a whopping 148% this year through 2023. Earlier this month, Bitfarms Ltd. jumped. (NASDAQ:BITF) after the company said it produced 486 BTC in January. The figure shows a growth of 61%. However, production was down 2% compared to December 2022. Bitfarms Ltd. (NASDAQ:BITF) said it mines an average of 15.7 BTC per day, equivalent to $362,700 per day.
At the end of the third quarter, 3 hedge funds had holdings in Bitfarms Ltd. (NASDAQ:BITF). In late September, Ken Griffin’s Citadel Investment Group reported owning $529,000 stake in Bitfarms Ltd. (NASDAQ:BITF).
9. Bit Digital, Inc. (NASDAQ:BTBT)
Number of hedge fund owners: 3
P/B ratio (MRQ): 0.93
Bit Digital, Inc. (NASDAQ:BTBT) is a penny stock currently trading at $1.36, as of February 8th. Bit Digital, Inc. (NASDAQ:BTBT) is up around 109% year to date in 223. Bit Digital, Inc. (NASDAQ:BTBT) is a Bitcoin mining company. In December, Bit Digital, Inc. (NASDAQ:BTBT) posted third quarter results. In the September quarter, revenues came in at 9.1 million dollars, while the gross profit was 2.6 million dollars. Earlier in February, Bit Digital, Inc. (NASDAQ:BTBT) revealed that it produced 134.3 BTC in January, which showed a 3% growth compared to the previous month. The growth was driven by higher average active hash rate. However, some of the potential growth was offset by increased network difficulties.
As of the end of January, Bit Digital, Inc. (NASDAQ:BTBT)’s own holdings stand at 970.6 BTC and 10,200 Ether.
A total of 3 hedge funds tracked by Insider Monkey reported owning stakes in Bit Digital, Inc. (NASDAQ:BTBT) at the end of 2022Q3.
8. Canaan Inc. (NASDAQ:CAN)
Number of hedge fund owners: 9
P/E ratio: 1.65
Canaan Inc. (NASDAQ:CAN) ranks 8th in our list of the most undervalued blockchain stocks to buy according to hedge funds. The Chinese company is known for its blockchain servers and ASIC microprocessors used in Bitcoin mining. Canaan Inc. (NASDAQ:CAN) makes high-performance hardware products that have huge applications in crypto-mining, blockchain and artificial intelligence. Canaan Inc. (NASDAQ:CAN) can profit from the upcoming growth catalysts in these areas. The PE ratio is 1.65 as of 8 February. In 2023 so far, Canaan Inc. (NASDAQ:CAN) is up about 68%.
As of Q3 2022, 9 hedge funds tracked by Insider Monkey reported owning stakes in Canaan Inc. (NASDAQ:CAN). The net worth of these shares was about $8.3 million. The largest stakeholder in Canaan Inc. (NASDAQ:CAN) at the end of the September quarter was Douglas Harold Hart Polunin’s Polunin Capital which had a $4.6 million stake in the company.
7. Riot Platforms, Inc. (NASDAQ:RIOT)
Number of hedge fund owners: 11
P/B ratio (MRQ): 0.96
Formerly called Riot Blockchain, Riot Platforms, Inc. (NASDAQ:RIOT) is one of the most notable names in the Bitcoin mining and blockchain world. On an annual basis, Riot Platforms, Inc. (NASDAQ:RIOT) has gained a whopping 96%. Earlier this month, Riot Platforms, Inc. (NASDAQ:RIOT) announced that it produced 740 bitcoins (BTC-USD) in January, up approx. 12.3% from the previous month and 62% compared to the period the previous year. In December, Riot Platforms, Inc.’s (NASDAQ:RIOT) production was 26% more than November’s production
At the end of Q3 2022, 11 hedge funds reported owning stakes in Riot Platforms, Inc. (NASDAQ:RIOT). The net value of these bets was $29 million. The largest shareholder of Riot Platforms, Inc. (NASDAQ:RIOT) during this period was Dmitry Balyasny’s Balyasny Asset Management which owns an $8.8 million stake in the company.
6. Coinbase Global, Inc. (NASDAQ:COIN)
Number of hedge fund owners: 28
P/E ratio (TTM): 7.33
Crypto exchange platform Coinbase Global, Inc. (NASDAQ:COIN) remains one of the most notable names in the cryptocurrency and blockchain space. Coinbase Global, Inc. (NASDAQ:COIN) has gained a whopping 107% year to date. Last month, Coinbase Global, Inc. (NASDAQ:COIN) shares rose after Jefferies analyst Trevor Williams began covering the stock with a Hold rating. The analyst said Coinbase Global, Inc. (NASDAQ:COIN) will be able to weather the industry-wide downturn following the FTX debacle. The analyst said Coinbase Global, Inc. (NASDAQ:COIN) has a solid balance sheet with over $5 billion in cash. He noted Coinbase Global, Inc.’s (NASDAQ:COIN) proactive approach to regulatory compliance and limited exposure to FTX as positives. The analyst said in his note that while Coinbase Global, Inc. (NASDAQ:COIN) has short-term headwinds, the company could restore its status as the “de-facto on-ramp to crypto” in the event of another bull market in crypto.
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Disclosure: None. 11 Most Undervalued Blockchain Stocks to Buy According to Hedge Funds is originally published on Insider Monkey.
