Markets
Profit from the Bitcoin Bull Market with These 3 Crypto Stocks – May 21, 2024
Bitcoin is the best-performing asset of the last decade, and its performance has shown no signs of slowing down – and some of the top crypto stocks are also losing steam.
Since the start of the year, the world’s first and largest cryptocurrency is up nearly 60%, a gain of nearly 150% over the past twelve months. Despite regulatory hurdles, cryptocurrency exchange shutdowns, and a brutal bear market, Bitcoin has scaled the proverbial “fear wall” and is just a few thousand dollars away from its all-time high of $73,798.
Looking ahead to the second half of 2024, Bitcoin and Bitcoin proxies are expected to benefit from two major bullish catalysts, including:
Bitcoin Halving Fuels Record Gains
The Bitcoin “Halving” event occurs every four years and halves the number of newly “created” Bitcoins. Bitcoin’s unique monetary policy sets it apart from currencies issued by central banks and makes it an attractive investment for a large number of people. While central banks have no limits on how much they can inflate their currencies, Bitcoin’s supply is limited. Historical price movements best illustrate the benefits of halving. The first three halves produced gains of 9,133%, 281% and 562% a year later!
Institutional adoption grows with Bitcoin ETFs
A 13F is a disclosure required by the United States Securities and Exchange Commission (SEC) that companies with assets under management in excess of $100 million must submit. This quarter, more than 600 institutions have disclosed positions in spot Bitcoin ETFs, including a who’s who of top firms like J.P. Morgan (JPM), Wells Fargo (W.F.C.), and Millenium (disclosed a $2 billion position), to name a few.
3 Crypto-Related Stocks to Buy Now
Coinbase (PIECE OF MONEY)
Coinbase is the largest crypto exchange in the United States, achieving a high possible Zacks Rank #1 (Strong Buy).
Milking cow
Seth Klarman is a legendary value investor, billionaire and one of the highest-paid money managers in the world. In an interview last year, Klarman said he avoided crypto but saw value in Coinbase, saying: “Coinbase has $5 billion in liquidity, has less debt than that, and is doing smart things.” Well, that number has now grown to over 7 billion. I bring this to your attention because few people trading stocks like COIN probably understand how fundamentally sound the company is.
Coinbase Exceeds Street Expectations
On May 3, the leading cryptocurrency exchange reported EPS of $4.4, beating the Street estimate of $1.07. Here is an excerpt from the EPS transcription that stood out to me:“Our first quarter financial performance reflects our focused execution on product expansion, continued operational discipline and strong crypto market conditions. We generated $1.6 billion in total revenue and $1.2 billion in net profit*. Adjusted EBITDA was $1.0 billion, more than we generated in all of 2023.” Finally, we continue to promote crypto regulatory clarity through grassroots advocacy, pressure for legislation, and continued efforts to seek clarity from the courts.
COIN has exceeded expectations for five straight quarters, and they’re not only beating them, they’re crushing them. Over the past five quarters, the average EPS surprise is 364.63%!
Robinhood Markets (HOOD)
Zacks Rank #2 Stock (Buy) Robin Hood (HOOD – Free report) is one of the most popular brokerages in the United States. Robinhood was the first major broker to “democratize” trading by offering a commission-free investing app. The app rose to prominence during the meme stock craze that was spurred by retail investing groups on the social media platform. Reddit (RDDT) and included meteoric moves in stocks like Stoppage of play (GME).
Bullish Catalyst: Crypto
HOOD recently added crypto-enabled trading. Although HOOD is late to the crypto game, the company has the perfect customer base to take advantage of a Bitcoin bull market.
Consistent positive EPS surprises
HOOD reported first-quarter earnings that beat the Zacks Consensus Estimate by 260%. Over the past four quarters, positive profits have become the norm, with an average EPS of 230%!
Record net deposits
Net deposits are one of the most important metrics for brokers to monitor. HOOD’s net deposits reached a record high of $11.2 billion in the first quarter, translating to an annualized growth rate of 44% and contributing to a 30% growth rate over the trailing twelve months . Meanwhile, CEO Vlad Tenev announced on May 14 that Robinhood had reached $5 billion in stock trading volume.
Robinhood Gold is growing
Robinhood recently announced a new “Gold” credit card. HOOD has already gained 260,000 new subscribers.
MicroStrategy (MSTR)
MicroStrategy has been around for years and is a leading provider of business intelligence software.
Adopt the Bitcoin standard
Former CEO and billionaire Michael Saylor made waves on Wall Street a few years ago when he obtained MSTR on the “Bitcoin Standard”. Instead of sitting on inflationary assets like the US dollar, Saylor realized that MSTR would be better off on a “Bitcoin sail”. Essentially, MSTR is a leveraged Bitcoin bet. The results speak for themselves: over the last five years, MicroStrategy has grown by over 1,000%!
Conversely, a good option for investors who don’t want a leveraged bet but want to exploit Bitcoin’s upside potential is iShares Bitcoin Trust (IBIT) ETF. IBIT has some of the lowest fees and the most liquidity of all Bitcoin ETFs.
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