3 Blockchain Stocks to Sell If You’re Bearish on Crypto
The largest cryptocurrency, Bitcoin, topped the $20,000 barrier Friday on upbeat market sentiments about a possible drop in inflation numbers. The second largest crypto, Ether, also rose on Friday.
However, further interest rate hikes are likely to constrain the economy, which is expected to put pressure on the relatively riskier crypto market. Experts believe cryptocurrencies will continue a downward trend amid the volatile economic backdrop.
Also, digital currencies may face increased regulations in the future. Gary Gensler, the current SEC chairman, stated that the Commodity Futures Trading Commission (CFTC) need greater authority to monitor and regulate crypto non-security tokens and related intermediaries.
Also, with the much anticipated Ether merger expected to happen soon, the crypto market may experience more volatility. Hence blockchain shares Block, Inc. (SQ), Coinbase Global, Inc. (COIN), and Riot Blockchain, Inc. (RIOT) is best avoided now.
Block, Inc. (SQ)
SQ is committed to creating tools that enable merchants to accept card payments and provide next-day reporting and analytics and settlement. The company also supplies hardware products.
On July 13, SQ subsidiary Afterpay and beauty retailer Sephora announced their partnership to enable customers to pay for American beauty brands and products in four installments. However, the benefits from this partnership can be extended over a long period of time.
For the fiscal second quarter ended June 30, SQ’s total net income fell 5.9% year over year to $4.40 billion. Adjusted net income fell 56.8% from the prior quarter to $110.74 million. Adjusted net income per share fell 63.3% from the same period last year to $0.18.
The consensus revenue estimate of $17.60 billion for fiscal 2022 indicates a year-over-year decline of 0.3%.
The stock has fallen 70% in the past year and 54% so far this year to close its last trade at $74.29.
SQs POWR Ratings reflects this bleak outlook. The share has an overall D rating, which corresponds to a sell in our proprietary rating system. The POWR ratings are calculated by considering 118 different factors, with each factor weighted optimally.
SQ has a stability and quality rating of D. I 107 stock Financial services (business) industry, SQ is ranked #91. The industry is rated F.
click here to see the additional POWR ratings for SQ (growth, value, momentum and sentiment).
Coinbase Global, Inc. (COIN)
COIN provides financial infrastructure and technology for the global crypto economy. The company’s offerings include the primary financial account for traders in the crypto space.
On September 8, Enthusiast Gaming Holdings Inc. (EGLX) announced its partnership with COIN to introduce the company as its preferred infrastructure provider to power its Web3-enabled gaming portfolio. However, there may still be some time left before significant gains can be realized from this venture.
COIN’s total revenue fell 63.7% year-over-year to $808.33 million in its fiscal second quarter ended June 30. Net income and net income per share attributable to common shareholders fell 168.1% and 177.6% from the prior year to a negative $1.09 billion and a negative $4.98, respectively.
Street EPS estimate for the fiscal quarter ending December 2022 of a negative $2.06 indicates a 162% year-over-year decline. Likewise, the Street revenue estimate for the same quarter of $752.68 million reflects a 69.9% year-over-year decline.
Over the past year, the stock has fallen 67.4% to end its last trade at $80.87. It has fallen 68% so far this year.
It’s no surprise that COIN has an overall F rating, which means strong sales in our POWR ranking system.
COIN has an F grade for growth, value, stability and sentiment and a D for quality. It is ranked #153 of the 154 stocks in the Software – Application industry. The industry is rated F.
To see the additional POWR ratings for Momentum for COIN, click here.
Riot Blockchain, Inc. (RIOT)
RIOT, with its subsidiaries, is engaged in cryptocurrency mining in North America. The company focuses primarily on Bitcoin mining with a large fleet of publicly traded miners.
For the fiscal second quarter ended June 30, RIOT’s total revenue increased 112.4% year over year to $72.95 million. However, net income and net income per share came in at negative $366.33 million and negative $2.81, down 1,994.5% and 1,377.3% from the same period last year.
The consensus FY2022 EPS estimate of a negative $2.47 indicates a year-over-year decline of 2,987.5%.
The stock has fallen 72.1% in the past year and 63% so far this year to end its last trade at $8.26.
RIOT’s gloomy outlook is reflected in the POWR ratings. The share has an overall F rating, which corresponds to a strong sell in our proprietary rating system.
RIOT has an F grade for stability, sentiment and quality and a D for value. In the 81 warehouse Technology – Services industry, it is ranked #79. The industry is rated D.
In addition to the POWR ratings we have provided above, one can see RIOT ratings for growth and momentum here.
SQ shares were trading at $74.60 a share Monday morning, up $0.31 (+0.42%). So far this year, SQ has fallen -53.81%, against an increase of -13.05% in the benchmark S&P 500 over the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More…
