3 crypto stocks that have been crushed this year

Crypto stocks have been crushed this year due to the general risk-off environment. Additionally, with governments trying to regulate the crypto market, we believe fundamentally weak crypto stocks Riot Blockchain (RIOT), Coinbase Global (COIN), and Silvergate Capital (SI) are best avoided for now. Read on….

Cryptocurrency stocks have been hit hard since the beginning of the year due to the general risk-off environment. The top two cryptocurrencies, Bitcoin and Ethereum, are down about 50% so far this year.

The stock market has had a difficult first half of the year due to decades of high inflation, the Fed’s aggressive rate hikes and geopolitical tensions. During the cryptocurrency bull run last year, many crypto advocates argued that it is a good store of value due to its scarcity. However, amid the global macroeconomic uncertainty, crypto stocks have been crushed this year.

The US consumer price index came in lower than analysts’ expectations after rising 8.5% year-on-year in July. This led to an increase in the prices of Bitcoin and Ethereum, with hopes that the Federal Reserve would ease the tightening of monetary policy.

However, crypto stocks may remain under pressure in the near term, as minutes from the Federal Reserve’s recent policy meeting revealed that more interest rate increases may be in store. The politicians are obliged to raise prices as high as necessary to bring prices down.

Given this backdrop, fundamentally weak crypto-stock Riot Blockchain, Inc. (RIOT), Coinbase Global, Inc. (COIN), and Silvergate Capital Corporation (SAY) is best avoided now.

Riot Blockchain, Inc. (RIOT)

RIOT is involved in cryptocurrency mining and the overall blockchain system through various investments. The company has deployed approximately 8,000 application-specific integrated circuit miners at its cryptocurrency mining facility in Oklahoma. In addition, subsidiary Tess Inc. seeks to develop a blockchain-based escrow service for wholesale telecom operators.

RIOT’s adjusted EBITDA loss came in at $65.17 million for the second year ended June 30, 2022, compared to a adjusted EBITDA of 2.38 million dollars. The company’s adjusted loss per share came in at $0.50, compared to adjusted EPS of $0.03. Also, RIOT’s selling, general and administrative expenses increased 205.7% year-over-year to $10.70 million.

Analysts expect RIOT’s EPS for the quarter ending September 30, 2022 to remain negative. It failed to beat Street EPS estimates in three of the trailing four quarters. The stock has fallen 62.6% year-to-date to finish last trading at $8.35.

RIOT’s dim outlook is reflected in its POWR Ratings. It has an overall F rating, which equates to strong sales in our proprietary rating system. The POWR ratings are calculated by considering 118 different factors, with each factor weighted optimally.

It has an F grade for stability, sentiment and quality and a D for value. It is ranked #80 of 81 stocks in the Technology – Services industry. click here to see the other reviews of RIOT for Growth and Momentum.

Coinbase Global, Inc. (COIN)

COIN offers merchants the primary financial account in the crypto-economy, a marketplace with a pool of liquidity for institutional crypto-asset transactions, and technology and services that enable ecosystem partners to build crypto-based applications and securely accept crypto-asset payments.

On July 21, 2022, the SEC the first ever cryptocurrency insider trading case after accusing a former COIN operative of tipping off his brother and friend with confidential information.

The SEC also claims that nine of the 25 cryptocurrencies involved in the insider trading case met safety criteria. Yet COIN did not register them as securities even though they had all the hallmarks of a definition of a security.

COIN’s net revenue for the fiscal second quarter ended June 30, 2022, fell 63.7% year-over-year to $808.32 million. Total operating expenses increased 36.9% year over year to $1.85 billion. The company’s net loss came in at $1.09 billion, compared to net income of $1.61 billion in the same period last year. In addition, the loss per share came in at $4.98, compared to EPS of $6.42 a year ago.

For the quarter ending September 30, 2022, COIN’s EPS is expected to decline 231.5% year-over-year to $2.13. Revenue for the quarter ending December 31, 2022 is expected to fall 69.6% year-over-year to $759.09 million. The stock has lost 66.1% year-to-date to close last trade at $85.44.

COIN’s POWR ratings reflect this bleak outlook. The share has an overall F rating, which corresponds to a strong sell in our proprietary rating system.

It has an F rating for growth, value, stability and sentiment. It is ranked last out of 155 shares in F-rated Software – Application industry. click here to access COIN’s assessments for Momentum and Quality.

Silvergate Capital Corporation (SAY)

SI is a bank holding company for Silvergate Bank, which is a leading bank for innovative businesses in fintech and cryptocurrency.

SI’s total non-interest income fell 23.6% year-over-year to $9.21 million for the second quarter ended June 30, 2022. The company’s total non-interest expenses increased 42% year-over-year to 30, 55 million dollars. Also, its total liabilities rose 26.3% year-on-year to $14.42 billion.

Analysts expect SI’s EPS and revenue to grow 54.5% and 94% year-over-year to $1.36 million and $100.31 million, respectively. The stock has lost 33.9% year-to-date to close last trade at $97.94.

SI’s weak outlook is reflected in the POWR ratings. The share has an overall rating of D, which corresponds to a sell in our proprietary rating system.

It has an F grade for value and stability and a D for quality. It is ranked #41 out of 42 D-rated stocks Pacific regional banks industry. click here to see the other SI ratings for Growth, Momentum and Sentiment.

RIOT stock was trading at $8.42 per share Thursday morning, up $0.07 (+0.84%). So far this year, RIOT has fallen -62.29%, against an increase of -9.60% in the benchmark S&P 500 over the same period.

About the Author: Dipanjan Banchur

Since he was in primary school, Dipanjan was interested in the stock market. This led to him taking a master’s degree in finance and accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing new trends in the financial markets.

More…

The mail 3 crypto stocks that have been crushed this year appeared first StockNews.com