The cryptocurrency market is enjoying another bullish trend, particularly for Bitcoin (BTC-USD), buoyed by regulatory shifts in the U.S. In this article, we look at crypto-related stocks to buy as these businesses continue to benefit from higher Bitcoin prices.
In addition, the U.K.’s Financial Conduct Authority (FCA), mirroring the U.S. Securities and Exchange Commission (SEC), has expressed openness to trading Bitcoin and Ethereum-based exchange-traded notes within the country.
The ongoing rally in Bitcoin has been fueled mainly by the SEC’s recent approval of 11 spot Bitcoin ETFs, which has unlocked a new avenue for institutional investment in Bitcoin, allowing trading at its current spot price instead of the previously available futures-based ETFs.
This move has significantly catalyzed Bitcoin’s price, with BlackRock’s iShares Bitcoin ETF (NASDAQ:IBIT) purchasing over $778 million worth of BTC on March 6, illustrating the potent impact of institutional involvement on the cryptocurrency’s value and supply dynamics.
“Risk appetite has also soared in recent weeks with tech stocks fuelling the sense of FOMO [fear of missing out] in markets and I think bitcoin is being swept along in all of this,” said James Knightley, the chief international economist at the banking group ING.
Let’s look at three promising crypto-related stocks to buy in 2024.
MicroStrategy (MSTR)
MicroStrategy (NASDAQ:MSTR) has made a significant bet on Bitcoin, positioning itself as a major corporate investor in the cryptocurrency. By acquiring billions of dollars worth of Bitcoin as part of its treasury assets, MSTR aims to leverage the digital currency’s potential for long-term value appreciation, boldly stating Bitcoin’s viability as an investment asset.
Most recently, MicroStrategy has further solidified its position as a prominent Bitcoin investor by raising $782 million through a debt sale to acquire more cryptocurrency. Michael Saylor, the company’s founder and the key player behind this Bitcoin bet, announced that the company’s Bitcoin holdings have reached 214,245, valued at over $15 billion amid the cryptocurrency’s record-breaking surge.
The recent purchase of 12,000 bitcoins for approximately $822 million was funded through convertible notes and excess cash. This strategic investment has significantly impacted MicroStrategy stock, which saw a notable increase following the announcement, highlighting the company’s close association with Bitcoin’s market performance.
As Bitcoin climbed to over $73,400, MicroStrategy stock also experienced a major uptick, marking a 68% increase since the announcement of the debt sale and a 180% rise this year, building on a 346% surge in 2023. The MSTR stock is up nearly 150% in 2024 alone, making MicroStrategy one of the top crypto-related stocks to buy in case Bitcoin prices pull back from record highs.
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) is a leading cryptocurrency mining company focused on building, supporting and operating blockchain technologies. With a primary emphasis on Bitcoin mining, Riot is working to generate strong shareholder returns through mining operations and infrastructure investments.
The company’s stock recently surged after major investment firm JPMorgan (NYSE:JPM) raised its rating to Overweight, signaling the potential for RIOT to outperform the market over the next 12 months. The price target of 15% implies a nearly 40% upside from the most recent closing price.
JPMorgan moved amid expectations for the company to significantly boost its hash rate, a crucial cryptocurrency mining performance metric. Riot Platforms plans to increase its hash rate by 9 EH/s soon, with an additional 10 EH/s expected in the latter half of 2024, aiming for a total of 31.5 EH/s by year’s end.
Riot has a strong financial position with about $600 million in cash alongside $470 million in Bitcoin holdings. With ongoing expansions, including the activation of nearly 20 EH/s at the new Corsicana facility, Riot is poised for improved mining efficiency and economics, distinguishing it from competitors.
Marathon Digital (MARA)
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.
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.
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.
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.
