The cryptocurrency market is witnessing another uptrend, especially for Bitcoin (BTC USD), spurred by regulatory changes in the US. In this article, we look at crypto-related stocks to buy as these companies continue to benefit from higher Bitcoin prices.
In addition, the British Financial Conduct Authority (FCA), a reflection of the U.S. Securities and Exchange Commission (SEC), has expressed openness to trading Bitcoin and Ethereum-based exchange-traded notes within the country.
Bitcoin’s ongoing rally has been largely fueled by the SEC’s recent approval of 11 spot Bitcoin ETFs, which has opened a new avenue for institutional investment in Bitcoin, allowing trading at the current spot price instead of the futures-based ETFs previously available .
This move significantly accelerated the price of Bitcoin and BlackRock iShares Bitcoin ETF (NASDAQ:I BIT) purchased over $778 million worth of BTC on March 6, illustrating the strong influence of institutional participation on the cryptocurrency’s value and supply dynamics.
“Risk appetite has also risen sharply in recent weeks, with tech stocks adding to feelings of FOMO [fear of missing out] in the markets and I think Bitcoin is getting caught up in all of this.” said James Knightley, chief international economist at banking group ING.
Let’s look at three promising crypto-related stocks to buy in 2024.
MicroStrategy (MSTR)
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Microstrategy (NASDAQ:MSTR) has bet heavily on Bitcoin and positioned itself as a major corporate investor in the cryptocurrency. By acquiring billions of dollars worth of Bitcoin as part of its national assets, MSTR aims to leverage the digital currency’s potential for long-term value appreciation, thereby clearly emphasizing the viability of Bitcoin as an investment asset.
Most recently, MicroStrategy has further consolidated its position as a prominent Bitcoin investor Raised $782 million through a debt sale to acquire more cryptocurrency. Michael Saylor, the company’s founder and key player in this Bitcoin bet, revealed that the company’s Bitcoin holdings have reached 214,245. worth over $15 billion amid the cryptocurrency’s record-breaking surge.
The recent purchase of 12,000 Bitcoins for approximately $822 million was funded by convertible notes and excess cash. This strategic investment had a significant impact on MicroStrategy shares, which saw a significant increase following the announcement, underscoring the company’s close connection to Bitcoin’s market performance.
As Bitcoin climbed above $73,400, MicroStrategy shares also experienced a significant uptick, up 68% since the debt sale announcement and up 180% this year, building on a 346% rise in the month Year 2023. MSTR stock is up almost 150% in value in 2024 alone, making MicroStrategy one of the top crypto stocks to buy if Bitcoin prices pull back from record highs.
Riot Platforms (RIOT)
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Riot Platforms (NASDAQ:REVOLT) is a leading cryptocurrency mining company focused on building, supporting and operating blockchain technologies. Riot is primarily focused on Bitcoin mining and works to generate high returns for shareholders through mining operations and infrastructure investments.
The company’s shares recently rose sharply after a major investment firm JP Morgan (NYSE:JPM) raised its rating to Overweight, signaling the potential for RIOT to outperform the market over the next 12 months. The 15% price target implies an increase of almost 40% from the last closing price.
JP Morgan touched amid expectations that the company will significantly increase its hash rate, a key performance metric for cryptocurrency mining. Riot Platforms plans to increase its hash rate by 9 EH/s soon, with another 10 EH/s expected in the second half of 2024, reaching a total of 31.5 EH/s by the end of the year.
Riot has a strong financial position with around $600 million in cash and $470 million in Bitcoin holdings. With continued expansions, including enabling nearly 20 EH/s at the new Corsicana facility, Riot is poised to improve mining efficiency and economics and differentiate itself from the competition.
Marathon Digital (MARA)
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Marathon Digital (NASDAQ:MARA), similar to Riot Platforms, is a leading cryptocurrency mining company focused on the blockchain ecosystem and digital asset generation. The Company operates one of the largest Bitcoin mining operations in North America with the goal of leveraging the potential of blockchain technology to produce digital currencies and secure blockchain transactions.
Marathon Digital shares have also risen sharply in recent months, driven by the rising price of Bitcoin. The company’s most recent earnings report showed profit fluctuation in the most recent quarter.
MARA reported a net income of $151.8 million, a significant turnaround from a net loss of $391.6 million the previous year, largely due to impairments. Quarterly revenue reached $156.8 million, beating analysts’ expectations.
For 2023, Marathon Digital stated that it managed to significantly expand its Bitcoin mining activities, achieving a 253% growth in hash rate to 24.7 exahash, resulting in a record production of 12,852 Bitcoins. The company produced 4,242 Bitcoin in the fourth quarter, surpassing its total production from the previous year.
At the time of publication, Shane Neagle did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication policies.