Blockchain technology still represents one of the most influential and disruptive trends to emerge from the tech sector. That said, many investors may view the scene as less investable than some of the more exciting themes that have popped up in recent years. Undoubtedly, AI (artificial intelligence) is the hot tech of the times. And though “blockchain and crypto” tech may be “so 2021,” I’d argue that the field could face a resurgence, even if the magnitude of hype continues trailing AI.
Bitcoin (USD-BTC) prices have been steadily creeping higher in recent quarters, now up more than 84% over the past year alone. The top cryptocurrency’s newfound momentum may not experience a slow pace in 2024, either.
Even as Bitcoin heats up again, some of the many publicly traded tech firms with skin in the crypto game still seem underrated and misunderstood. This piece will look at three such companies that may be worth watching closely this year.
Coinbase (COIN)
Coinbase (NASDAQ:COIN) is kicking off 2024 with a nasty plunge of over 20% YTD. Undoubtedly, the $29.85 billion company’s fortunes seem to have turned the moment the clock struck midnight on the first of January.
I wouldn’t make too much of the recent dip, though. After all, the stock did go parabolic in the last quarter of 2023. A pullback, cool-off period, or consolidation only seems natural at this juncture, even if Bitcoin prices continue to flex their muscles into the new year.
As Coinbase and the SEC take matters to court, COIN stock is sure to be a volatile stock that only a near-term trader can enjoy. Even if recent negative momentum in COIN stock mounts and spot Bitcoin ETF approval hype winds down, Coinbase’s value proposition makes sense from a long-term perspective.
Bitcoin and its like may have been plagued with negative headlines in recent years. But as Coinbase rides out what remains of the storm, some analysts on Wall Street think the stock can keep the gains going through 2024. Additionally, Coinbase also stands to gain handsomely if Bitcoin can breach new highs in this new year.
For now, analyst sentiment seems quite mixed, with a relatively even mix of overweight and underweight ratings. Perhaps it’s more shrewd to play COIN cautiously by waiting for recent negative momentum to subside before punching your ticket to the top crypto play.
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) continues to be one of the most intriguing high-risk/high-reward plays on the Street these days. It’s an exciting play, but only if you have full confidence in leading cryptocurrencies like Bitcoin. Despite the disastrous start to 2024, which saw RIOT stock fall 33% year to date, the stock is still up around 66% over the past year.
Indeed, Bitcoin’s recent correction off its highs has appeared to work its way into the stock in a big way. As a crypto mining play that can really fly or sink based on movements in the crypto markets, only the bravest of investors should wander into the firm amid recent turbulence.
Though any firm can raise capital to mine Bitcoin, there aren’t as many that can do it as efficiently as Riot. That’s the economy of scale at work, folks! And with a market cap north of $2 billion, Riot’s size is an obvious advantage.
As the pullback continues, crypto enthusiasts may wish to add RIOT to their watchlists as the firm looks to gain a share in the wild world of crypto mining. In my opinion, it’s a high-risk buy only suitable for those willing to ride the Bitcoin rollercoaster.
PayPal (PYPL)
Remember when PayPal (NASDAQ:PYPL) was a must-have tech stock to own, with gains that rivaled that of the Magnificent Seven stocks?
Neither do I.
It’s been a long two-and-a-half years that PYPL stock has been in free-fall mode. Though a bottom may be closer than the top, it’s quite jarring to see shares stay in the gutter while other technology names blast off again.
Love it or hate it, PayPal stock really wants to return to its former glory. And it’s willing to take risks by reaching into the crypto scene to gain the love of investors back. CEO Alex Chriss recently appeared on CNBC, going as far as to say his firm will “shock the world” as it moves forward with its turnaround efforts.
Could it be that analysts are missing the market when it comes to PYPL stock amid the recent wave of downgrades?
It’s impossible to say. However, I do like the stock’s chances at 18.5 times trailing price-to-earnings. Though catalysts may be limited, there just has to be a way to claw share back from competing payments plays. Indeed, crypto represents a wild card that could give investors the positive “shock” to get them buying again.
On the date of publication, Joey Frenette 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.
