Crypto stocks to buy with strong fundamentals and potential for growth acceleration in the coming quarters
After a big rally in the first two months of the year Bitcoin (BTC USD) seems to be consolidating. Amid the volatility, the cryptocurrency traded between $60,000 and $70,000. However, with the Bitcoin halving complete, I expect another rally relatively soon. Therefore, the current consolidation phase is a good time to think about buying some crypto stocks to earn quick returns.
In addition to Bitcoin’s halving factor, there is another reason to be bullish on cryptocurrencies. It is likely that there will be several rate cuts over the next 12 to 18 months. An expansionary monetary policy has a positive effect on risky asset classes. I expect trading and speculative activity to increase, which will benefit major crypto exchanges.
In addition, there are some fundamentally strong Bitcoin miners. These companies have ambitious capacity expansion plans for the next 18 months
Let’s talk about which crypto stocks you should buy before they skyrocket.
Coinbase (COIN)
Source: Sergei Elagin / Shutterstock.com
Coinbase (NASDAQ:COIN) The stock saw a massive rise of almost 300% in the last 12 months. However, the upside came from heavily oversold levels and COIN stock remains attractive. My view is reinforced by the fact that the growth stock trades at a price-to-earnings ratio of 31.
An important point is that the Bitcoin rally is likely to be followed by large price movements in altcoins. The bull market is far from reaching the euphoria phase, and as altcoins recover, I expect an increase in trading and speculative activity. This will likely benefit Coinbase in the coming quarters and translate into healthy revenue and cash flow upside.
Additionally, Coinbase used 2023 for aggressive international expansion. The company expanded from one country (the United States) to one Presence in 38 countries until the end of the year. The impact of this expansion will be reflected in excellent growth in the coming quarters.
With a strong liquidity buffer, international expansion, and continued growth among institutional customers, Coinbase is positioned to be a value creator.
Marathon Digital (MARA)
Source: rafapress / Shutterstock.com
Marathon Digital (NASDAQ:MARA) The stock is up 123% in the last six months. This happened in line with the rally in Bitcoin. However, MARA stock remains undervalued and has ambitious growth plans. I expect another 100% return from current levels over the next 12 months.
It is worth noting that Marathon began 2024 with a provided hash rate of 24.7EH/s. The company is with the aim of increasing capacity to 50EH/s by the end of the year. This should lead to healthy sales and EBITDA growth.
From a financial perspective, Marathon reported cash and equivalents of $425.6 million in February. For the same period, the Value of the company’s Bitcoin holdings was $1 billion. I must add that Marathon reduced its debt by 58% year-over-year in the fourth quarter of 2023. Therefore, there is sufficient flexibility to pursue aggressive growth beyond the current year.
Riot Platforms (RIOT)
Source: rafapress / Shutterstock.com
Riot Platforms (NASDAQ:REVOLT) is another massively undervalued Bitcoin miner poised for a major rally. The stock trades at a forward price-to-earnings ratio of 16.2 and has moved sideways over the past 12 months. I expect RIOT stock to return 100% within a quarter or two.
The first point to note about Riot is its strong fundamentals. The company has a liquidity buffer (including digital assets) of $1.3 billion. Furthermore, with a debt-free balance sheet, there is sufficient scope for aggressive capacity expansion.
It is worth noting that Riot reported a cost of mining one Bitcoin of $23,034 for the first quarter of 2024. Higher network difficulties and higher fixed costs were taken into account. With Bitcoin trading above $60,000, EBITDA margins should remain robust in the coming quarters.
At the same time, Riot expects to increase hash rate capacity from 12.4EH/s in the first quarter of 2024 to 100EH/s in 2027. With continued capacity growth, an increase in sales and cash flow can be seen. RIOT stock is therefore a potential multibagger.
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.