As the cryptocurrency market experiences another bullish wave, spearheaded by the soaring trajectory of Bitcoin (BTC-USD), companies intertwined with the crypto realm stand to benefit from the surge, driven by evolutions in U.S. regulations. The United Kingdom’s Financial Conduct Authority (FCA), echoing the U.S. Securities and Exchange Commission (SEC), has raised the prospect of trading Bitcoin and Ethereum-based exchange-traded notes within the nation, adding another layer of intrigue to the unfolding crypto narrative.
The recent rally in Bitcoin can be largely attributed to the SEC’s greenlighting of 11 spot Bitcoin ETFs, creating a fresh avenue for institutional investment in the flagship cryptocurrency, enabling trading at its prevailing spot price in contrast to the previously prevalent futures-based ETFs. This regulatory milestone has significantly catalyzed Bitcoin’s value, as evidenced by BlackRock’s iShares Bitcoin ETF (NASDAQ:IBIT) purchasing an impressive $778 million worth of BTC on March 6, underscoring the profound impact of institutional players on Bitcoin’s market dynamics.
“Risk appetite has also surged in recent weeks due to tech stocks fueling a sense of FOMO [fear of missing out] in markets, and I believe Bitcoin is caught in this wave,” remarked James Knightley, the chief international economist at the banking giant ING.
Now, let’s delve into the realm of three compelling crypto-related stocks that investors should keep a keen eye on for the rest of 2024.
MicroStrategy (MSTR)
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MicroStrategy (NASDAQ:MSTR) has emerged as a major proponent of Bitcoin, positioning itself as a significant corporate investor in the crypto sphere. By acquiring billions of dollars in Bitcoin as part of its treasury holdings, MSTR is leveraging the digital currency’s potential for long-term appreciation, boldly championing Bitcoin as a viable investment asset.
In its latest move, MicroStrategy further cemented its standing as a prominent Bitcoin investor by raising a considerable $782 million through a debt offering to acquire more cryptocurrency. Michael Saylor, the company’s founder and Bitcoin aficionado, disclosed that MicroStrategy’s Bitcoin reserves have surged to 214,245 bitcoins, valued at over $15 billion during Bitcoin’s meteoric rise.
The recent acquisition of 12,000 bitcoins for approximately $822 million, funded via convertible notes and surplus cash, has made a momentous impact on MicroStrategy’s stock, witnessing a substantial uptick post the announcement. This development underscores the symbiotic relationship between MicroStrategy’s stock performance and Bitcoin’s market trajectory.
As Bitcoin surpasses the $73,400 mark, MicroStrategy’s stock has mirrored this upward momentum, marking a remarkable 68% surge since the debt offering revelation and an astounding 180% increase this year. This builds on a staggering 346% surge in 2023, with MicroStrategy’s stock soaring nearly 150% in 2024 alone, positioning the company as a prime contender among crypto-related stocks poised for growth even in the face of potential Bitcoin price retracements from all-time highs.
Riot Platforms (RIOT)
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Riot Platforms (NASDAQ:RIOT) stands out as a premier player in the cryptocurrency mining sector, dedicated to constructing, maintaining, and operating blockchain technologies. Focused primarily on Bitcoin mining, Riot Platforms is committed to delivering solid returns for its shareholders through robust mining operations and infrastructure investments.
The company witnessed a stock surge following the bullish rating upgrade by the esteemed investment behemoth JPMorgan (NYSE:JPM), elevating Riot Platforms to Overweight status, signaling the potential for outperformance against the market backdrop in the next 12 months. With a price target indicating a near 40% upside from the latest closing price, expectations are high for Riot’s growth trajectory.
Riot Platforms is on track to bolster its hash rate significantly, a critical metric in cryptocurrency mining performance, aiming to ramp up to 9 EH/s imminently, with an additional 10 EH/s set for the latter half of 2024, eyeing a cumulative 31.5 EH/s by year-end.
With a robust financial position boasting approximately $600 million in cash alongside $470 million in Bitcoin holdings, Riot Platforms is strategically expanding, including activating nearly 20 EH/s at the cutting-edge Corsicana facility. These expansions are set to enhance mining efficiency and economics, setting Riot apart from its competitors in the fast-evolving crypto landscape.
Marathon Digital (MARA)
Marathon Digital Holdings Inc. Shines Bright in the Cryptocurrency Mining Sector
Leading the Way in Crypto Mining
Marathon Digital (NASDAQ:MARA), similar to Riot Platforms, is a leading cryptocurrency mining company focused on the blockchain ecosystem and the generation of digital assets. It operates one of the largest Bitcoin mining operations in North America, aiming to leverage the potential of blockchain technology to produce digital currency and secure blockchain transactions.
Prolific Rise in Stock Value
Marathon Digital stock has also risen sharply over the last few months, propelled by the rising prices of Bitcoin. The company’s most recent earnings report showed a swing in profit in the latest quarter.
Financial Turnaround and Growth
MARA reported a net income of $151.8 million, a stark turnaround from a net loss of $391.6 million the previous year, attributed largely to impairments. Quarterly revenue reached $156.8 million, surpassing analyst expectations.
Record-Breaking Performance in 2023
For 2023, Marathon Digital said it managed to significantly expand its Bitcoin mining operations, achieving a 253% growth in hash rate to 24.7 exahash, leading to a record production of 12,852 Bitcoin. The company produced 4,242 Bitcoin in the fourth quarter, eclipsing its total output from the previous year.
On the date of publication, Shane Neagle 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 writer, subject to the InvestorPlace.com Publishing Guidelines.
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