In this article, we discuss 11 best cryptocurrency stocks to buy according to hedge funds. If you want to see more stocks in this selection, check out 5 Best Cryptocurrency Stocks To Buy According To Hedge Funds.
The world of cryptocurrency is familiar with unpredictability. Previously, we reported that in May 2021, the value of Bitcoin dropped by 50% but eventually bounced back and reached record highs of around $69,000 later that year. According to predictions, Bitcoin was expected to end 2022 at roughly $16,800, which is a decline from its peak of $19,500 during the FTX crisis. If FTX’s bankruptcy led to more controversies, Bitcoin’s value was set to decrease even further. Even Cathie Wood, a well-known Bitcoin expert from ARK Invest, acknowledged that financial institutions may reassess their cryptocurrency strategies in the short term due to the FTX situation.
The crypto industry’s instability and uncertainty have not stopped it from challenging some significant financial norms, gradually pushing the world towards a contemporary economy. While recent global incidents, such as the FTX crisis and Bitcoin’s drop, have affected the crypto industry, some retail traders worldwide think that purchasing cryptocurrency products during the dip could contribute to the sector’s revival.
Bitcoin has surged by approximately 70% this year, and experts in the industry who spoke with CNBC are optimistic, with one suggesting that the most significant cryptocurrency in the world could achieve new peaks. In November 2021, Bitcoin reached its highest ever value of $68,990.90, but it has since dropped by roughly 60%. According to Marshall Beard, the Chief Strategy Officer at Gemini, a US-based cryptocurrency exchange, there is a chance that Bitcoin could reach $100,000. Beard explained that if Bitcoin were to return to its previous all-time high of approximately $69,000, it would not require much additional growth to reach the $100,000 mark. Similarly, Paolo Ardoino, who serves as the Chief Technology Officer at Tether, a stablecoin provider, expressed his belief that Bitcoin may “retest” its previous peak value of around $69,000.
The cryptocurrency industry’s current optimistic outlook on Bitcoin is partly due to how the asset has fared during the banking chaos that resulted from the downfall of Silicon Valley Bank and the insolvency of two cryptocurrency-friendly banks, Silvergate Capital and Signature Bank. Amid this positive sector outlook, some of the best cryptocurrency stocks to buy include Mastercard Incorporated (NYSE:MA), NVIDIA Corporation (NASDAQ:NVDA), and Visa Inc. (NYSE:V).
Our Methodology
These are the most popular crypto stocks among the 943 hedge funds tracked by Insider Monkey as of the end of the fourth quarter of 2022. These companies have deep links to the crypto universe. We have arranged the list according to the hedge fund sentiment around the securities.
Photo by André François McKenzie on Unsplash
Best Cryptocurrency Stocks To Buy According To Hedge Funds
11. Coinbase Global Inc (NASDAQ:COIN)
Number of Hedge Fund Holders: 27
Coinbase Global Inc (NASDAQ:COIN) is a cryptocurrency exchange headquartered in San Francisco, California. The company was founded in 2012 by Brian Armstrong and Fred Ehrsam and has grown to become one of the largest cryptocurrency exchanges in the world. On February 21, Coinbase Global Inc (NASDAQ:COIN) reported a Q4 GAAP loss per share of $2.46 and a revenue of $629.1 million, topping Wall Street estimates by $0.05 and $41.73 million, respectively.
Coinbase Global Inc (NASDAQ:COIN) has revealed that it has received a Wells notice from the SEC in regards to some parts of its spot market, Coinbase Earn staking service, Coinbase Prime institutional investor platform, and Coinbase Wallet. According to Compass Point analyst Chase White, this announcement is likely to be viewed as a significant risk by investors. He anticipates that Coinbase Global Inc (NASDAQ:COIN) will contest any enforcement action in court, a process that could take years, including potential appeals. Despite the ongoing legal challenge, the analyst believes that the SEC’s actions are not expected to pose an existential threat to Coinbase, and that the company will likely emerge victorious in court. The worst-case scenario, in his view, would be a substantial fine in the hundreds of millions of dollars. While acknowledging the potential negative impact of the ongoing legal battle, the firm continues to recommend a Buy rating on Coinbase Global Inc (NASDAQ:COIN) shares, with a target price of $100 as of March 24.
According to Insider Monkey’s Q4 data, 27 hedge funds were bullish on Coinbase Global Inc (NASDAQ:COIN), comapred to 28 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the biggest stakeholder of the company.
Like Mastercard Incorporated (NYSE:MA), NVIDIA Corporation (NASDAQ:NVDA), and Visa Inc. (NYSE:V), Coinbase Global Inc (NASDAQ:COIN) is one of the best cryptocurrency stocks to invest in.
10. Interactive Brokers Group, Inc. (NASDAQ:IBKR)
Number of Hedge Fund Holders: 42
Interactive Brokers Group, Inc. (NASDAQ:IBKR) is a global electronic broker that automates the process of executing trades in various financial instruments such as stocks, options, futures, forex, bonds, mutual funds, ETFs, metals, and cryptocurrencies. The company is focused on routing, executing, and processing these trades for its clients. It is one of the best crypto stocks to invest in. On January 17, Interactive Brokers Group, Inc. (NASDAQ:IBKR) reported Q4 Non-GAAP EPS of $1.30 and a revenue of $958 million, beating market consensus by $0.13 and $26 million, respectively.
On March 22, Barclays raised the firm’s price target on Interactive Brokers Group, Inc. (NASDAQ:IBKR) to $102 from $96 and kept an Overweight rating on the shares. This update comes as part of the bank’s review of price targets in the brokers, asset managers, and exchanges group following recent events, including the collapse of SVB Financial. Barclays predicts that cash borrowing in the near-term will have a negative impact on the sector’s earnings and balance sheet growth in fiscal years 2023 and 2024.
According to Insider Monkey’s Q4 database, 42 hedge funds were long Interactive Brokers Group, Inc. (NASDAQ:IBKR), compared to 35 funds in the earlier quarter. William B. Gray’s Orbis Investment Management is the largest position holder in the company.
LVS Advisory made the following comment about Interactive Brokers Group, Inc. (NASDAQ:IBKR) in its Q3 2022 investor letter:
“The most notable new position this year has been our investment in Interactive Brokers Group, Inc. (NASDAQ:IBKR). I published a detailed write-up (link here) and also appeared on the ‘Yet Another Value Podcast’ (link here) to discuss our IBKR thesis. To boil it down, IBKR benefits from higher interest rates, and the stock was available at an exceptionally cheap price. I believe IBKR represents a particularly good risk/reward bet and have made it our largest position.”
9. CME Group Inc. (NASDAQ:CME)
Number of Hedge Fund Holders: 58
CME Group Inc. (NASDAQ:CME) runs global markets where futures and options contracts are traded. They provide various futures and options products related to interest rates, equity indexes, foreign exchange, agricultural commodities, energy, cryptocurrencies, and metals. In addition, the company offers fixed income and foreign currency trading services as well. On March 2, CME Group Inc. (NASDAQ:CME) announced that the average daily volume for February 2023 was 28.2 million contracts, which was higher than January 2023’s 21.7 million contracts. The company also recorded a new high in average daily open interest, reaching 2,549 contracts. This figure represents a 711% increase year-over-year and is expected to remain in effect until December 2024.
On February 9, Deutsche Bank analyst Brian Bedell raised the firm’s price target on CME Group Inc. (NASDAQ:CME) to $218 from $200 and maintained a Buy rating on the shares. The analyst noted that CME Group Inc. (NASDAQ:CME)’s Q4 results were impressive, with a slight beat on revenue and interest income, as well as a significant beat on adjusted expenses. The company has also demonstrated pricing power by increasing futures/options RPC this year, leading to a 4%-5% revenue increase. With the combination of organic growth initiatives and expected low-mid-single digit pace trading volumes, Deutsche Bank believes that CME Group Inc. (NASDAQ:CME) can achieve EPS growth of about 10% this year, compared to the previously predicted 3%.
According to Insider Monkey’s fourth quarter database, 58 hedge funds were long CME Group Inc. (NASDAQ:CME), compared to 60 funds in the prior quarter. GuardCap Asset Management is the largest stakeholder of the company, with 4 million shares worth $684.7 million.
Carillon Eagle Growth & Income Fund made the following comment about CME Group Inc. (NASDAQ:CME) in its Q4 2022 investor letter:
“CME Group Inc. (NASDAQ:CME) shares underperformed due to a decline in interest rates during the latter half of the quarter. Recall that a significant portion of CME’s business benefits from higher interest rates and therefore the market’s increased expectation for federal funds rate cuts in 2023 has weighed on the stock.”
8. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 62
Intel Corporation (NASDAQ:INTC) released a new technology called Intel Blockscale in April 2022, which is designed to provide energy-efficient blockchain hashing. Several companies, including Argo Blockchain plc (NASDAQ:ARBK), Block, Inc. (NYSE:SQ), HIVE Blockchain Technologies Ltd. (NASDAQ:HIVE), and GRIID Infrastructure, were to be among the first customers to use the Intel Blockscale ASIC. The ASIC has a maximum power capacity of 580 GH/s hash rate. Intel Corporation (NASDAQ:INTC) is one of the best cryptocurrency stocks to invest in.
On March 20, Raymond James analyst Srini Pajjuri raised the firm’s price target on Intel Corporation (NASDAQ:INTC) to $33 from $30 and maintained an Outperform rating on the shares. The analyst noted that the expectations for the PC segment in the near-term are not very high, but there are signs of recovery in the Commercial segment where Intel Corporation (NASDAQ:INTC) holds a strong position. This development has encouraged Raymond James to be positive about Intel’s future prospects.
According to Insider Monkey’s fourth quarter database, 62 hedge funds were bullish on Intel Corporation (NASDAQ:INTC), compared to 69 funds in the prior quarter. D E Shaw is the largest stakeholder of the company, with 13.3 million shares worth $353.7 million.
ClearBridge Large Cap Growth Strategy made the following comment about Intel Corporation (NASDAQ:INTC) in its Q4 2022 investor letter:
“A third approach to return generation is purchasing idiosyncratic businesses that largely control their own destiny. Intel Corporation (NASDAQ:INTC), which we purchased in the first quarter on the premise that it would develop a leading domestic foundry business, has struggled with execution missteps and product delays. We are maintaining the position to provide ongoing exposure to semiconductors.”
7. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 70
Block, Inc. (NYSE:SQ) develops tools that allow vendors to accept credit card payments and provides them with reporting and analytical features, as well as next-day settlement services. Block, Inc. (NYSE:SQ) also creates software for blockchain technology and crypto assets. The company’s future plans will mainly center around CEO Jack Dorsey’s enduring belief in the cryptocurrency bitcoin. The renaming of Square to Block, Inc. (NYSE:SQ) was partly intended to convey the expansion of the company’s vision and broader plans regarding blockchain and cryptocurrency. It is one of the premier cryptocurrency stocks to watch.
On March 23, RBC Capital analyst Daniel Perlin maintained an Outperform rating and a $95 price target on Block, Inc. (NYSE:SQ) shares. A recent report alleged that Block, Inc. (NYSE:SQ)’s “underbanked” user base consisted of unethical actors who artificially inflated the company’s user metrics, and that its acquisition of Afterpay led to predatory pricing. RBC Capital believes that the negative impact of the report could persist for a while, but the firm’s overall view of the stock has not changed.
According to Insider Monkey’s fourth quarter database, 70 hedge funds were bullish on Block, Inc. (NYSE:SQ), compared to 75 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the biggest stakeholder of the company.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Block, Inc. (NYSE:SQ) was one of them. Here is what the fund said:
“Block, Inc. (NYSE:SQ) provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. Shares fell due to mixed quarterly results with more modest growth in the Seller business offsetting strength in Cash App. While integration of recently acquired Afterpay is progressing well and credit metrics remain healthy, the buy-now-pay-later business slowed due to greater competitive intensity. We continue to own the stock due to Block’s long runway for growth, sustainable competitive advantages, and unique corporate culture.”
Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund include Wells Fargo.”
6. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 71
American Express Company (NYSE:AXP) is a multinational company that focuses on payment card services. In June 2022, the company announced that the Abra Crypto Card, which operates on the American Express Company (NYSE:AXP) network, would transact in US dollars and provide cryptocurrency rewards on purchases made in any category. Smart investors consider American Express Company (NYSE:AXP) to be one of the top stocks to invest in within the cryptocurrency market.
On March 9, American Express Company (NYSE:AXP) declared a $0.60 per share quarterly dividend, a 15.4% increase from its prior dividend of $0.52. The dividend is payable on May 10, to shareholders of record on April 7. The board of directors of American Express Company (NYSE:AXP) approved the repurchase of up to 120 million common shares.
According to Insider Monkey’s fourth quarter database, 71 hedge funds were bullish on American Express Company (NYSE:AXP), compared to 68 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the biggest stakeholder of the company, with 151.6 million shares worth $22.40 billion.
In addition to Mastercard Incorporated (NYSE:MA), NVIDIA Corporation (NASDAQ:NVDA), and Visa Inc. (NYSE:V), American Express Company (NYSE:AXP) is one of the top crypto stocks to buy.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and American Express Company (NYSE:AXP) was one of them. Here is what the fund said:
“In financials, American Express Company (NYSE:AXP) has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.”
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Disclosure: None. 11 Best Cryptocurrency Stocks To Buy According To Hedge Funds is originally published on Insider Monkey.