In this article, we discuss the 10 best cryptocurrencies Redditors are buying. If you want to skip our detailed analysis of these currencies, go directly to the 5 Best Cryptocurrencies Redditors are Buying.
Interest in cryptocurrencies has skyrocketed this year as institutional buying and celebrity buzz legitimates the new technology. However, despite talks of regulating the industry that is still very much evolving, the year has so far thrown up more questions than answers with regards to the complete digitization of money. Bitcoin, the most popular cryptocurrency, has hit multiple all-time highs but price volatility, even for the “biggest” coin, remains an issue of extreme concern for investors. In a major breakthrough, the first Bitcoin ETF has started trading on the stock market.
According to a report by the IMARC Group, a market research firm, the global cryptocurrency market was valued at more than $364 billion in 2020. This figure is expected to grow at a compound annual growth rate of a scary 60% in the next five years. The facts on the ground support this huge estimate. A March survey by the CNBC CFO Council found that mainstreaming of coins has reached new heights, even within large businesses, as 65% of US-based CFOs believe that the currency is “for real”.
Some of the top crypto stocks to buy right now according to Redditors include Tesla, Inc. (NASDAQ:TSLA), NVIDIA Corporation (NASDAQ:NVDA), and Alphabet Inc. (NASDAQ:GOOG), among others discussed below. Experts still caution that due to the volatility associated with crypto prices, investors should keep their crypto holdings small but diversified and should not rely on them to save for retirement or pay off debt. Crypto enthusiasts, on the other hand, some of whom have become millionaires through crypto, would disagree.
Photo by Adam Nowakowski on Unsplash
Our Methodology
These were picked from a careful assessment of comments published on different Reddit forums over the past 24 hours. The details of each cryptocurrency are mentioned alongside a discussion around top companies working in the sector to provide readers with some context for their investment decisions.
The hedge fund sentiment around the stocks was calculated using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best Cryptocurrencies Redditors are Buying
10. Solana
Solana was launched as a cryptocurrency only in 2020 but has quickly gained more than 15,000% in value just this year to become the sixth-largest coin in the world with a market capitalization of $69 billion. In January, one coin of the currency was worth around $1.51. Presently, it is trading at around $229. One of the reasons for the popularity of the coin is that it is a competitor to Ethereum, the second-largest coin by market cap, and hailed as the future of blockchain. It is also one of the fastest coins, with speeds of 50,000 transactions per second.
The mainstreaming of coins like Solana has been facilitated by companies like PayPal Holdings, Inc. (NASDAQ:PYPL), a digital payments firm based in California.
At the end of the second quarter of 2021, 143 hedge funds in the database of Insider Monkey held stakes worth $16.3 billion in PayPal Holdings, Inc. (NASDAQ:PYPL), the same as in the preceding quarter worth $14.7 billion.
Just like Tesla, Inc. (NASDAQ:TSLA), NVIDIA Corporation (NASDAQ:NVDA), and Alphabet Inc. (NASDAQ:GOOG), PayPal Holdings, Inc. (NASDAQ:PYPL) is one of the stocks attracting the attention of retail investors.
In its Q4 2020 investor letter, Polen Capital Management, an asset management firm, highlighted a few stocks and PayPal Holdings, Inc. (NASDAQ:PYPL) was one of them. Here is what the fund said:
“For the full year 2020, one of the top performers was PayPal, which we purchased in 2019, the company continues to take market share in digital payments and has seen an acceleration in user adoption and engagement, especially within their “silver tech” or older user demographic. We expect many more years of ongoing double-digit growth from their various business segments and new initiatives.”
9. Shiba
Shiba is a cryptocurrency created in August 2020 that has crossed $28 billion in market capitalization. The coin has rapidly gained popularity, entering the list of the top 10 coins in the world by market cap earlier this month. It is a spinoff from Dogecoin, a currency created as a meme in 2013, that has transformed into a usable coin presently traded for food, shopping, and other tasks. There is still a lot of volatility in the price of Shiba, but due to sustained interest from Redditors, as well as talks of presence on big crypto exchanges, the coin seems to be taking off.
Shiba has gained recognition in the wider finance world through the crypto initiatives of reputable brands such as Square, Inc. (NYSE:SQ), a payments firm headquartered in California.
At the end of the second quarter of 2021, 94 hedge funds in the database of Insider Monkey held stakes worth $10 billion in Square, Inc. (NYSE:SQ), up from 92 the preceding quarter worth $9 billion.
In its Q1 2021 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and Square, Inc. (NYSE:SQ) was one of them. Here is what the fund said:
“We established a position in leading Financial Technology provider Square during the quarter. Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).
The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown
from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.
We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of Square’s future value will be from its Cash App business.”
8. Algo
Algo is a cryptocurrency for the Algorand platform with close to $14 billion in market capitalization. The coin supports smart contract functionality based on a proof-of-stake system. The coin is one of the fastest-growing coins in the crypto world, with expert projections that it will double or triple in value within the next three years. The coin was founded by Silvio Micali, a professor at MIT. The proof-of-stake platform makes the coin more sustainable than other alternatives, a factor that is becoming increasingly important in the ESG business world.
Investors who want exposure to cryptocurrencies like Algo should also check out the work of Fiserv, Inc. (NASDAQ:FISV), a financial services technology firm, in the domain.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in Fiserv, Inc. (NASDAQ:FISV) with 12 million shares worth more than $1.2 billion.
In its Q1 2021 investor letter, Madison Funds, an asset management firm, highlighted a few stocks and Fiserv, Inc. (NASDAQ:FISV) was one of them. Here is what the fund said:
“This quarter we researched several new stock ideas, but because of high prices, acted on only one. Thus, a new portfolio name is Fiserv, with corporate headquarters in Brookfield, WI, just down I-94 from us. Fiserv is a technology company serving financial institutions (“FIs”) and retail merchants. It has two main business lines. In the first, it’s a market leader in outsourced IT solutions for banks and credit unions, online and mobile banking technology, digital money movement solutions, and card issuing services. Fiserv’s second core business is merchant acquiring and processing, where it’s a leader in providing a variety of solutions to help all types of merchants accept digital payments. They entered this business through the acquisition of First Data in 2019.
Within the first business, Fiserv’s software is critical to the daily operations of FI clients. Their solutions not only provide the vital central processing systems, but also enable services such as electronic bill pay and digital money transfers at both large institutions and local banks and credit unions alike. As such, it is an incredibly sticky business that is resilient through economic cycles. On the merchant acquiring side of Fiserv, they process trillions of dollars annually for millions of merchant clients. Their solutions cater to all types of merchants and optimize for seamless acceptance and high authorization rates while also limiting fraud. Similar to the IT outsourcing business, Fiserv’s merchant solutions are critical to their customers’ daily operations. Furthermore, we are especially encouraged by their investments in new solutions, particularly Clover and Carat. Clover is a small and midsize business merchant acquiring platform and Carat is an e-commerce acquiring platform. Both these products hit the bullseye in terms of the way people are interacting with the retail industry, and both are growing at above market rates, which we believe will sustain into the future.
In addition to Fiserv’s favorable business characteristics and competitive positioning, the management team, led by CEO Frank Bisignano, has a track record of successfully investing for growth, improving profitability, and intelligently allocating excess capital. We believe these value-creating activities will continue going forward.
Financial institutions are increasingly making investments to digitize…” [read entire letter here]
7. Cartesi
Cartesi is a cryptocurrency that markets itself as a solution to scalability issues and high fees on other blockchains. The coin has taken off in the past few days, touching a high of $1.60 on November 11 before taking a breather. It is now trading at around $1.2 Year-to-date, the coin has gained over 3,000% in value. The currency is available for trading on big crypto exchange platforms, although the price is still very volatile.
Cryptocurrencies like Cartesi have thrived at the market due in part to the ease with which they can be traded through platforms like Coinbase Global, Inc. (NASDAQ:COIN), a crypto exchange that debuted on the market earlier this year.
Among the hedge funds being tracked by Insider Monkey, New York-based firm ARK Investment Management is a leading shareholder in Coinbase Global, Inc. (NASDAQ:COIN) with 5.6 million shares worth more than $1.4 billion.
6. Loopring
Loopring is an Ethereum-based cryptocurrency that has exploded in value in the past few weeks. Presently, the coin is being traded at around $2.98 and has a market capitalization of close to $4 billion. The two main drivers in this frenzy — the coin has jumped in value by 700% in the space of four weeks — are rumors related to the utility of the coin in the “metaverse” concept and that GameStop is using Loopring to build an NFT marketplace. None of these rumors have so far been corroborated.
Loopring enthusiasts should also consider investing in Mastercard Incorporated (NYSE:MA), a payments and transaction processing firm.
Among the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Mastercard Incorporated (NYSE:MA) with 5.8 million shares worth more than $2.1 billion.
In addition to Tesla, Inc. (NASDAQ:TSLA), NVIDIA Corporation (NASDAQ:NVDA), and Alphabet Inc. (NASDAQ:GOOG), Mastercard Incorporated (NYSE:MA) is one of the stocks on the radar of elite investors.
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE:MA) was one of them. Here is what the fund said:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
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Disclosure. None. 10 Best Cryptocurrencies Redditors are Buying is originally published on Insider Monkey.
