In this article, we discuss the 10 high risk, high reward cryptocurrencies to buy according to Reddit. If you want to skip our detailed analysis of these currencies, go directly to the 5 High Risk, High Reward Cryptocurrencies to Buy According to Reddit.
The skepticism around cryptocurrencies in particular and blockchain technology in general is largely fueled by the volatility often associated with trades of digital assets. The case of Bitcoin, the most popular cryptocurrency that touched an all-time high of $68,950 earlier this month before falling 10% in the following hours, illustrates this quite well. Even though experts believe that there might be a correlation in the prices of cryptocurrencies and the performance of the benchmark S&P 500, solid evidence for this still seems to be lacking.
Crypto enthusiasts claim the coin rallied on the back of inflation concerns in the United States following the release of the latest Consumer Price Index scores which show a 6.2% year-over-year increase in prices. Several investors see Bitcoin as a hedge against inflation, placing it above gold in monetary value. Billionaire Ray Dalio, one of the most successful hedge fund managers of 2020, has compared the coin to “digital gold” and revealed earlier this year that he owns some Bitcoin as well.
Cryptocurrencies are gaining legitimacy around the world, with countries like El Salvador even adopting the coin as legal tender. There is little doubt that the sector is a high risk, high reward one within the finance world, largely fitting the investing philosophy of retail traders, a dominant marketforce. Some of the top stocks to consider for the crypto economy include NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), among others discussed in detail below.
Our Methodology
These were picked from a careful assessment of comments published on different Reddit forums over the past few weeks. 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.
High Risk, High Reward Cryptocurrencies to Buy According to Reddit
10. Kadena
Kadena is a cryptocurrency that uses a proof-of-work blockchain network. The network is energy consuming and partly the reason why people are hesitant about investing in Bitcoin, which also uses the same system. However, Kadena uses a mechanism known as “braided chains” to improve the efficiency of the platform. Using this method, Kadena can process 480,000 transactions per second. The coin has a market cap of $3.6 billion.
The mainstreaming of coins like Kadena has been made possible in large part by crypto initiatives from firms like Visa Inc. (NYSE:V), the California-based payments company.
At the end of the second quarter of 2021, 162 hedge funds in the database of Insider Monkey held stakes worth $27 billion in Visa Inc. (NYSE:V), down from 164 in the preceding quarter worth $26 billion.
Just like NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V) is one of the stocks that hedge funds are buying.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:
“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa.”
9. Polkadex
Polkadex is a cryptocurrency that operates on a decentralized, peer-peer DeFi ecosystem. It has a market cap of $67 million and is presently trading at around $21 per coin. It is also the currency of the Polkadex exchange, which offers features such as high frequency trading, NFTs, new token generation, and forkless updates. The exchange has the capability to process 500,000 transactions per second.
As cryptocurrencies explode in popularity, one of the largest cheerleaders of the new technology has been Square, Inc. (NYSE:SQ), the digital payments company.
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. Aurory
Aurory is the cryptocurrency of a gaming platform which uses a play-to-earn system. The game allows players to collect NFTs and tokens and use them to battle with other players. The game will soon be available on the Solana blockchain network, a fast-growing ecosystem in the crypto world. Aurory has a market cap of $161 million. The currency was founded by Yann Penno and Paul Vadillo. The coin will soon be available for trading on Serum, a crypto exchange platform.
Coins like Aurory are becoming integrated into the digital payments ecosystem by firms like PayPal Holdings, Inc. (NASDAQ:PYPL), the California-based financial technology platform.
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.
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.”
7. Aldrin
Aldrin is a cryptocurrency built on the DeFi ecosystem. It has a market cap of $35 million. The currency aims to make crypto more accessible for businesses. It was founded by Hisham Khan. MEXC Global is one of the most active crypto exchanges with regards to the trading of the Aldrin coin. It is presently trading at around $5 per coin. One of the ways the currency aims to make the technology more accessible is by building crypto apps that scale.
6. Netvrk
Netvrk is a cryptocurrency that can be used to buy and sell assets within different virtual reality worlds. It is trading at around $5.1 per coin and has a market cap of $157 million. KuCoin, Hotbit, and CoinBene are some of the exchanges where the coin can be traded. The currency is aimed at creators, making it easier to create, share and monetize digital content.
Another possible investment in the crypto market as digital currencies become popular is Facebook, Inc. (NASDAQ:FB), the technology company that owns some of the largest social media platforms in the world.
At the end of the second quarter of 2021, 266 hedge funds in the database of Insider Monkey held stakes worth $42 billion in Facebook, Inc. (NASDAQ:FB), up from 257 in the preceding quarter worth $40 billion.
Alongside NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), Facebook, Inc. (NASDAQ:FB) is one of the stocks attracting the attention of elite investors.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Facebook, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
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Disclose. None. 10 High Risk, High Reward Cryptocurrencies to Buy According to Reddit is originally published on Insider Monkey.
