Crypto stocks are one way to gain exposure to the world of cryptocurrency. Organizations that mine Bitcoin and Ethereum are listed on the stock exchange.
Many investors are unfamiliar with blockchain and the potential strategies to participate in its development. Furthermore, decentralized finance is expected to grow in importance in the next few years. Firms that deal in cryptocurrency are expected to branch out from mining.
As a result, with expansion at a tipping point, including some cryptocurrency stocks in your portfolio is a smart option.
What Is Stock?
A stock is a financial instrument that reflects ownership in a firm or organization and an equal claim on its assets (what it owns) and earnings (what it earns).
Stock ownership entails owning a piece of the company equal to the number of shares held as a percentage of the total number of share capital.
Difference Between Crypto Stock And Market Cap
Identifying a company’s market valuation in the stock market attributes it to one of the different investment categories: small capitalization, middle capitalization, or large capitalization.
Understanding market valuation is crucial because an investor may choose to divide their investment into various groups for different reasons. A company’s market capitalization refers to how much it is worth, and this value might be reflected in how risky it is to invest in it.
Understanding the market capitalization of a cryptocurrency is useful if you want to understand the possibility of a particular coin. Still, it shouldn’t play as significant a role in your investment decisions as it does in the stock market.
Though market valuation has limited use in crypto trading, there is one way it may be able to assist you with your cryptocurrencies investments.
Crypto Stocks To Buy Presently
Financial analysts, investment firms, and technology officers of major organizations are all enthusiastic about the potential of crypto in general and Bitcoin specifically.
Ethereum, the second most popular cryptocurrency, is anticipated as the next major breakaway start. Several cryptocurrencies, like Ripple, Bitcoin Cash, and Cardano, have also achieved success.
The foundation of this digital revolution is often promoted as retail investment opportunities, influencing market structure in this aspect.
Take a look at crypto stocks that appear to be worth investing in for medium to long-term investments.
Coinbase
Coinbase is one of the world’s major cryptocurrency exchange and trading platforms. It is a fintech company that offers end-to-end financial services. Its main goal is to create a crypto-economy based on crypto and digital assets created with blockchain technology.
The price of COIN has risen by 16 percent in the last month. It is not surprising since many cryptocurrencies are now gaining wide acceptance.
When it comes to increased popularity, global cryptocurrency users surpassed 100 million earlier this year. The volume of cryptocurrencies users more than doubled in four months, reaching 221 million. Undoubtedly, this is a huge win for Coinbase.
From a business viewpoint, the company’s reported Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.2 billion for Q2 2021 is also impressive. This would yield a $4.8 billion yearly EBITDA.
For the first half of 2021, the company recorded an operating cash flow of $2.2 billion without custodial money due to customers. As a result, Coinbase appears to be well-positioned to generate strong free cash flow soon.
It appears to be a good time to buy COIN stock presently. As crypto investors keep growing fast, the company’s asset-light operation is set to be a cash flow generator.
Marathon Digital (MARA)
MARA stock rose by 194% in 2021 and appears to have room to rise even higher. As it actively adds miners, the Bitcoin mining company is poised for tremendous revenue growth soon.
According to the company, revenue increased by 10,147 percent year over year (YOY) to $29.3 million in the second quarter of 2021. With 19,395 active miners, the company mined a maximum of 654 Bitcoins throughout the quarter.
The important thing to remember is that Marathon aims to hire 103,120 miners by Q1 2022. This amounts to 6.4 percent of the total Bitcoin hash rate. As a result, the company is poised for long-term growth as the number of miners grows.
Pegging the price of Bitcoin at $55,000, the business expects to earn $94.4 million per month after all miners are deployed. This would suggest a revenue of more than $1 billion every year.
In addition, cash and Bitcoin assets exceeded $366.5 million. This provides the organization with the financial flexibility to seek expansion beyond its existing plans.
Therefore, MARA stocks are some of the most appealing crypto stocks — and at current levels, a new investment might be considered.
Robinhood (HOOD)
Following its Initial Public Offering (IPO), the stock of HOOD has seen a lot of volatility. Nevertheless, the stock appears to be a smart long-term investment with the company on a slightly elevated path.
Presently, Robinhood allows users to trade and invest in stocks, mutual funds, gold, and cryptocurrencies. Therefore, you are open to different selections as an investor.
According to the company’s report, Robinhood had 17.7 million monthly active users and $81 billion in assets under custody. It’s also worth mentioning that the Average Revenue Per User (ARPU) for the company in 2017 was $37.
Meanwhile, the ARPU has climbed to $108.9 for 2020. In the next few years, continued ARPU increase indicates a robust EBITDA ratio and cash flow.
As of March 2020, Robinhood had $481 million in assets under custody for cryptocurrency. As of March 2021, the total cryptocurrency assets under custody had risen to $11.6 billion. The growth has been fantastic, and with the current rate of cryptocurrency acceptance, AUC will likely increase rapidly.
Riot Blockchain
Riot Blockchain is a cryptocurrency mining company that aims to get exposure to the crypto space through its operation. Riot’s prime focus aims to make it one of North America’s largest and lowest-cost Bitcoin producers.
Riot Blockchain is a company that focuses on producing products and exploring strategies to improve the efficiency of Bitcoin mining projects. Riot has also mined Bitcoin Cash and Litecoin in the past.
Riot Blockchain also aims to help the Bitcoin ecosystem by constantly studying Proof of Work Mining solutions to safeguard the Bitcoin world’s health. Riot Blockchain is using these efforts to increase the production and efficiency of Bitcoin mining projects.
According to the company’s July production and operations updates, they generated 444 Bitcoin in July 2021. This is an increase of 771 percent year over year (YOY).
Presently, the company has produced 1610 Bitcoin this year, an increase of 188% over the same period in 2020.
Riot Blockchain maintains a fleet of bitcoin mining projects, with the earnings going to fund startup companies, particularly DeFi startups. There is a high possibility that the company will have a sharp increase in its revenue soon. However, it is a stock you can consider buying.
CME Group Inc
CME Group Inc. is a financial derivatives exchange that specializes in cryptocurrency trading.
The company affirmed on May 11 that the volume of Micro Bitcoin futures had surpassed 100,000 contracts in less than a week of trading, highlighting the cryptocurrency’s attractiveness among investors.
As one of the world’s leading crypto exchange platforms, CME Group Inc. is a highly fair guess for revenue investors. Insider Monkey’s database showed 60 hedge funds with $2.3 billion in positions in CME Group Inc. at the end of the first quarter of 2021, up from 58 hedge funds with $2.2 billion at the end of the previous quarter.
What Are Blockchain Exchange Traded Funds?
Blockchain exchange-traded funds (ETFs) invest in stocks of firms that use blockchain technology in their operations or gain from it in some way.
Owing to the technology’s relationship with the fragile crypto market, many investors may be hesitant to risk investing in blockchain.
On the other hand, Blockchain is not the same as cryptocurrencies, and blockchain ETFs only invest in equities of regulated companies, many of which are large blue-chip technology companies, rather than outright in cryptocurrency.
Is Crypto Stocks Investment the Future?
Although Bitcoin and other cryptocurrencies gained much traction in the investment and financial sectors in late 2017 and early 2018, they have since become a niche topic for cryptocurrency lovers.
On the other hand, Blockchain technology continues to be a rapidly developing area of growth for businesses in several industries.
Blockchain technology may likely be viewed as the most significant invention to emerge from the Bitcoin rush. Cryptocurrency will transform the world forever by democratizing money and making it available to everyone.
A new class of billionaires will emerge as a result of cryptocurrency and buying stocks. You should count yourself fortunate to be able to board the crypto train and participate in this game-changing technology.
Risks Of Investing In Crypto Stocks
Cryptocurrencies are much more challenging to hold safely than equities or bonds. However, cryptocurrency exchanges like Coinbase make it relatively simple to buy and sell crypto assets like Bitcoin and Ethereum.
However, many investors choose not to retain their digital assets on exchanges due to the risk of hackers and theft. Keeping your coins safely in a good wallet is one of the most important things.
Additionally, there is no assurance that a cryptocurrency project you invest in will succeed.
Thousands of blockchain ventures compete for attention, and the crypto stock market is littered with ventures that are nothing but scams. Only a few cryptocurrency stock market investments will succeed eventually.
Governments may potentially target the overall crypto business, particularly if countries regard cryptocurrency as a danger instead of cutting-edge technology.
The fact that cryptocurrencies are based on cutting-edge technology raises the stakes for investors buying stock. Much of the technology is still under development and hasn’t been thoroughly tested in real-world circumstances.
Conclusion
Every one of those investments has advantages and disadvantages and distinct risk levels.
Before deciding to buy any crypto stock, consult with an investment advisor to establish a clear picture of your investments goals and risk level. To have a session with our crypto consultant before investing, kindly click on this link now.
