Attractively valued companies with potential to accelerate growth as the crypto bull market rages
Bitcoin (BTC USD) is in a consolidation zone after a big rally over the last 12 months. I expect further consolidation between $60,000 and $70,000 before another rally occurs. Therefore, it’s a good time to look at some of the best crypto stocks to buy.
It’s worth noting that the Fed is likely to cut interest rates several times over the next 12 to 18 months. An expansionary policy would mean easy money and that is the first trigger for an uptrend in Bitcoin. Since supply is limited, blue-chip crypto will naturally see an upward trend as digital assets become more widely accepted.
Furthermore, the current cryptocurrency bull market is far from over. Peter Brandt is a well-known technical analyst and believes that Bitcoin The ongoing bull market will peak at $200,000. This will likely lead to huge returns for some of the best crypto stocks.
So let’s discuss three crypto stocks to buy that can rise 100% in the next 12 months.
Coinbase Global (COIN)
Source: Primakov / Shutterstock.com
The trend in Coinbase (NASDAQ:COIN) The stock for the current year is similar to that of Bitcoin. The crypto trading platform’s stock has remained sideways in the recent past amid Bitcoin’s consolidation. I think this is a good opportunity for accumulation and a forward price-to-earnings (P/E) ratio of 31x is attractive.
In the last bull market, the peak of euphoria was associated with a surge in trading and speculative activity. This is still to come and will benefit Coinbase, one of the largest centralized exchanges in the world.
A key difference between the last bull market and today is the company’s geographic footprint. Previously, Coinbase was solely focused on the US markets. However, with aggressive international expansion, the crypto exchange is increasing is represented in 38 countries. Therefore, the sales potential is significantly higher, combined with a good outlook for free cash flow.
I must add here that Coinbase Prime, the company’s institutional trading platform, reached all-time highs in trading volume and number of active customers in the first quarter of 2024. This is another segment that is likely to drive growth as the bull market rages on in the coming quarters.
Riot Platforms (RIOT)
Source: rafapress / Shutterstock.com
Among Bitcoin mining stocks Riot Platforms (NASDAQ:REVOLT) seems to be massively undervalued. After a 25% correction in the last 12 months, RIOT stock trades at a forward P/E ratio of 13.4x. Given the growth prospects, the valuation gap is significant.
The first point to highlight is that Riot has strong fundamentals. The Bitcoin miner has a balance sheet with no debt. Additionally, the company reported a cash buffer (including Bitcoin holdings) of $1.3 billion in the first quarter of 2024. This enables Riot to pursue aggressive expansion.
A major expansion is already underway. Riot reported a hash rate capacity of 12.5EH/s for the first quarter of 2024 with the aim of increasing capacity to 31.5EH/s by the end of the year. Since we are a low-cost Bitcoin miner, this expansion will likely translate into robust revenue and EBITDA growth.
Additionally, Riot plans to increase capacity to 100EH/s by 2027. If execution is good, RIOT stock is likely to deliver multi-bagger returns from current levels. For now, I expect a strong recovery as new capacity boosts growth.
Block (SQ)
Source: Sergei Elagin / Shutterstock.com
Among the fintech stocks to buy are block (NYSE:square) looks attractive. After a major correction, SQ stock has remained sideways over the past 12 months. I believe that a breakout to the upside is imminent after this period of consolidation. My view is reinforced by the fact that SQ stock trades at an attractive price-to-earnings ratio of 19x.
One reason investors ignore Block is the perception that the company is heavily focused on Bitcoin and crypto. In the most recent letter to shareholders, Block made it clear that only “3% of company resources are dedicated to Bitcoin-related projects.” As Bitcoin adoption increases and blockchain technology is used across industries, it is likely that Block will increase its investments in crypto projects.
It’s also worth noting that Block did this Invest 10% of gross profit every month from Bitcoin products to purchase the cryptocurrency. As the value of Bitcoin increases, Block will benefit in the form of greater financial flexibility.
The company’s Cash App was a success, with over 21 million active users buying, selling or holding Bitcoin. As crypto becomes increasingly accepted as a payment method, Cash App usage for Bitcoin transactions will increase and add value.
At the time of publication, Faisal Humayun 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, subject to those of InvestorPlace.com Publishing Guidelines.
At the time of publication, the responsible editor had neither direct nor…
indirectly) all positions in the securities mentioned in this article.
