Here are three cryptocurrency companies that could be the best way to profit from crypto rallies in the future
Because of Bitcoin (BTC-USD) Due to its popularity and dominance, when people hear the word “blockchain,” they automatically think of Bitcoin. However, other cryptocurrencies exist, including blockchain stocks, which have diverse applications beyond digital currencies.
Some are leveraging blockchain and cryptocurrencies, while others are applying them to their business models. With tech stocks continuing to remain popular and blockchain technology being one of the main areas of innovation that many investors are focusing on, it makes sense to combine the two for powerful growth. With that in mind, here are three blockchain stocks to consider. These are companies that could certainly surge if a wave of interest once again sweeps the blockchain space and cryptocurrency valuations trend upwards over the long term.
Coinbase (COIN)
Source: Sergei Elagin / Shutterstock.com
The cryptocurrency market remains risky, but Coinbase (NASDAQ:COIN) has continued to provide a more stable offering to traditional investors. While market fluctuations are still commonplace, Coinbase has been posting solid financial results. The company’s earnings have become more stable, recently beating expectations. And while Coinbase’s valuation of 35 times earnings may seem steep to many, it’s also true that any meaningful and sustained earnings growth could push this stock into value territory in the near term.
Wall Street analysts seem to agree. The company’s impressive second-quarter earnings report came despite lower-than-expected trading volumes. JP Morgan kept a neutral rating on COIN stock, while Oppenheimer’s Owen Lau praised Coinbase’s profitability and leadership despite earnings volatility.
The San Francisco-based company reported revenue of $1.45 billion, beating estimates. Transaction fee revenue fell 27% on lower volume. Coinbase shares fell more than 3% amid a broader market decline. The company remains optimistic about other revenue sources, such as derivatives and Coinbase Wallet, though Barclays maintains an underweight rating on the stock.
Digital Marathon (MARA)
Source: rafapress / Shutterstock.com
Digital Marathon (NASDAQ:MARA) The company’s Q2 2024 report was equally strong, driven by higher average Bitcoin prices during the quarter. The company’s report highlighted a 78% increase in hash rate to 31.5 EH/s, but a 30% drop in Bitcoin production to 2,058 BTC. Revenue jumped 78% to $145.1 million, below the $157.9 million forecast. The stock fell after the report as investors continue to digest what the halving (and the production drop) could mean for the stock going forward, especially if Bitcoin prices decline further from here.
Marathon Digital sold more than half of its mined BTC in the last quarter to manage rising costs after the Bitcoin halving. Despite the Bitcoin price rally, daily BTC production dropped by 9.3 BTC due to operational difficulties.
Marathon Digital, a candidate for reelection, could benefit from Donald Trump’s favorable view of Bitcoin and the Supreme Court decision. With the SEC’s new interpretations and Trump’s pro-Bitcoin stance, MARA could attract investor interest. Marathon’s Mara Pool mining pool also allows it to capture a larger share of transaction fees, further strengthening its competitive advantage. Analysts consider MARA to be undervalued, given its price-to-earnings ratio below estimated fair value.
MicroStrategy (MSTR)
Source: DCStockPhotography / Shutterstock.com
Despite the fall in technology stocks, MicroStrategies (NASDAQ:MSTR) has seen a 17% increase in one month while the Nasdaq The stock fell 4%. A 10-for-1 split announced in mid-July has sent the company’s stock up 266% over the past year, even as Bitcoin prices have plummeted. MicroStrategy remains the largest holder of Bitcoin, with shares set to trade adjusted starting August 8.
On August 1, Michael Saylor revealed that MicroStrategy purchased 169 BTC in July, bringing its total to 226,500 BTC. Although the company suffered some losses, it remains focused on expanding its BTC holdings. Revenue for the second quarter reached $111.4 million, while gross profit reached $80.5 million.
Additionally, MicroStrategy’s BTC holdings will be valued at $5.68 billion, down from their original cost of $8.33 billion. The average price per BTC was $36,798. CEO Phong Le noted that the holdings were valued 70% above cost basis and focused on a new key performance indicator, “BTC yield,” which would target 4-8% annually for the next three years. The 2024 BTC yield is 12.2%, with targets set for 2025-2027.
As of the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.
As of the date of publication, the responsible publisher had not (directly or (indirectly) all positions on the securities mentioned in this article.
