As the financial markets pivot and twist, the focus has now shifted to crypto stocks, drawing investors like moths to a flame. In a landscape where AI and tech stocks have already had their moment in the sun, all eyes are now on Bitcoin (BTC-USD) and its historic rise.
For investors seeking to ride this crypto wave, diving into crypto stocks presents unique advantages, from regulatory compliance to potential upside from business expansion beyond the realm of crypto prices. Holding these stocks in tax-advantaged accounts only sweetens the pot, making the allure all the more tantalizing.
Think of holding crypto stocks as akin to wielding synthetic leverage – a double-edged sword that can amplify both profits and losses. The revenues and profits of many crypto companies are intricately linked to crypto prices and trading volumes, creating a rollercoaster ride of volatility for those invested.
While the book value of these stocks may ebb and flow with the wider market, the diversification of earnings from other sources could potentially lead to more robust returns than merely holding cryptocurrencies.
And so, let us explore three crypto stocks that stand out as shining opportunities for investors seeking to seize the moment.
Riot Platforms (RIOT)
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Riot Platforms (NASDAQ:RIOT), a dominant U.S.-based Bitcoin mining entity, is set to ramp up mining capabilities significantly this year, making it a prime choice for investors looking to dip their toes into the thriving waters of crypto stocks.
On the technological front, RIOT has inked multiple purchase agreements for Bitcoin miners. The company’s ambitious expansion plans include deploying 33,280 immersion miners for the Corsicana Facility, followed by subsequent orders for a massive 66,560 miners and an additional 31,500 air-cooled miners for the Rockdale Facility. Once fully operational, RIOT eyes achieving a self-mining hash rate capacity of 41 EH/s.
Boasting a robust financial foundation with a hefty $908 million in cash and equivalents, including Bitcoin holdings, and a clean slate with no debt, RIOT stands as a stalwart amidst the crypto storm.
Despite the looming threat of the Bitcoin halving event casting a shadow over Riot’s profits, the fervor surrounding the coin is expected to catapult RIOT’s valuation to lofty heights, positioning it as a must-watch player in the realm of crypto stocks.
Interactive Brokers Group (IBKR)
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Interactive Brokers Group (NASDAQ:IBKR) serves as a gateway for trading across an array of asset classes, including crypto, setting it apart as a hidden gem among crypto stocks.
IBKR’s financial prowess shone through with a reported net interest income of $730 million for the previous quarter and a record-breaking $2.8 billion for 2023. By the year’s end, the company’s total assets surged to a staggering $128 billion, signaling a remarkable 12% uptick from the preceding year.
Garnishing positive sentiments from analysts, IBKR received an encouraging nod from 9 Wall Street research analysts endorsing a Buy or Strong Buy rating for the stock. With a modest uptick predicted, the stage is set for IBKR to report substantial earnings amidst the throes of the crypto uptrend.
Positioning itself as an online juggernaut catering primarily to affluent traders and investors, IBKR’s competitive fee structure, with commissions ranging from 0.12% to 0.18% of trade value, puts it head and shoulders above its peers, making it a compelling contender in the world of crypto stocks.
Coinbase Global (COIN)
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Coinbase Global (NASDAQ:COIN) emerges as a linchpin in the crypto market, riding on a dazzling 48% surge year-to-date fueled by the Bitcoin ETF green light in Q1, hinting at further glory in the pipeline for savvy investors.
Looking back, an analyst on Seeking Alpha highlighted COIN’s tendency to shadow Bitcoin, showcasing a “beta” to Bitcoin of around 1.2x in 2023. This correlation indicates that a 1% shift in Bitcoin’s value could translate to a 1.2% alteration in COIN’s stock price.
If this historical alignment continues to hold true, the trajectory for COIN appears luminous. Projections paint a bullish panorama for Bitcoin, with prices expected to scale to nearly $80,000 by April.
Should Bitcoin embark on the anticipated historic rally, COIN stands tall as a primary beneficiary, with swelling earnings from trading fees, propelling it to prime position among the array of enticing crypto stocks.
On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
