In this article, we discuss the 11 best cryptocurrency stocks to buy according to hedge funds. You can skip our detailed analysis of cryptocurrencies, and go directly to read the 5 Best Cryptocurrency Stocks To Buy According To Hedge Funds.
Over the past few years, hedge funds have been increasing their exposure to cryptocurrency. FTX, a cryptocurrency exchange platform, has an average of $10 billion of daily trading volume as of July 2021. Moreover, the exchange raised a record $900 million in Series B funding at an $18 billion valuation. Hedge Fund managers Paul Tudor Jones, Alan Howard, and Izzy Englander were among the participants in the funding. According to a report published by PWC, the total assets under management of global crypto hedge funds increased to $3.8 billion in 2020, up from $2 billion in 2019.
As Financial Times reported, with the decline in prices in the digital currency this June, the crypto funds lost 10%. However, the fluctuation in prices did not stop hedge funds to place bets on digital currencies. In August, cryptocurrency hedge funds gained 24% as the funds investing in digital assets delivered a solid 145% return to shareholders in 2021. Some of the notable cryptocurrency stocks hedge funds are investing in include Mastercard Incorporated (NYSE:MA), PayPal Holdings, Inc. (NASDAQ:PYPL), Square, Inc. (NYSE:SQ), NVIDIA Corporation (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Tesla, Inc. (NASDAQ:TSLA).
Our Methodology:
Let’s analyze our list of the best cryptocurrency stocks to buy according to hedge funds. The companies mentioned below are involved in the crypto space through mining, crypto projects, development and investing in digital assets.
These are the most popular crypto stocks among the 873 elite funds tracked by Insider Monkey.
Why pay attention to hedge fund sentiment while choosing stocks?
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 S&P 500 ETF (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.
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11 Best Cryptocurrency Stocks To Buy According To Hedge Funds
11. Hut 8 Mining Corp. (NASDAQ:HUT)
Number of Hedge Fund Holders: 4
Hut 8 Mining Corp. (NASDAQ:HUT) is a Canadian digital asset miner with a special focus on Ethereum and Bitcoin mining. In September, the company reported 264 mined bitcoins, with an average production rate of 9.11 bitcoin per day. Hut 8 Mining Corp. (NASDAQ:HUT) stands eleventh on our list of the best cryptocurrency stocks to buy according to hedge funds.
In October, DA Davidson named Hut 8 Mining Corp. (NASDAQ:HUT) as its top pick in mining space, expecting rapid production in the coming years. The firm initiated its coverage of Hut 8 Mining Corp. (NASDAQ:HUT) with a Buy rating and a $20 price target. In Q2 2021, the company reported revenue of $33.5 million, showcasing a 264.4% year-over-year growth. At the end of the quarter, Hut 8 Mining Corp. (NASDAQ:HUT) had 3,824 bitcoins, valued at $166 million. The stock gained 1,351% in the past year.
As of Q2 2021, 4 hedge funds tracked by Insider Monkey reported having stakes in Hut 8 Mining Corp. (NASDAQ:HUT), worth over $2 million. There were no hedge fund positions in the company in the previous quarter.
10. Riot Blockchain, Inc. (NASDAQ:RIOT)
Number of Hedge Fund Holders: 17
An American bitcoin mining company, Riot Blockchain, Inc. (NASDAQ:RIOT) increased its bitcoin production by 346% in September 2021 at 406 BTC, compared with the last year. The company also reported solid results in Q2, with GAAP EPS beating the market estimates by $0.19, at $0.22. Riot Blockchain, Inc. (NASDAQ:RIOT) ranks tenth on our list of the best cryptocurrency stocks to buy according to hedge funds.
Ken Griffin’s Citadel Investment Group is the largest shareholder of Riot Blockchain, Inc. (NASDAQ:RIOT) with over 2.7 million shares. Overall, 17 hedge funds tracked by Insider Monkey were bullish on the company in Q2, up from 12 in the previous quarter. These stakes are valued at $100.7 million.
In October, Compass Point upgraded Riot Blockchain, Inc. (NASDAQ:RIOT) to Buy with a $45 price target. The stock has delivered a stunning 803.3% return to shareholders in the past year.
Like Mastercard Incorporated (NYSE:MA), PayPal Holdings, Inc. (NASDAQ:PYPL), Square, Inc. (NYSE:SQ), NVIDIA Corporation (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Tesla, Inc. (NASDAQ:TSLA), Riot Blockchain, Inc. (NASDAQ:RIOT) is also favored by investors in 2021.
9. Marathon Digital Holdings, Inc. (NASDAQ:MARA)
Number of Hedge Fund Holders: 19
Marathon Digital Holdings, Inc. (NASDAQ:MARA) has been gaining hedge funds’ attention as the number of hedge funds tracked by Insider Monkey having stakes in the company stood at 19 in Q2, valued at $108.8 million. In the previous quarter, 10 hedge funds had positions in the company. Marathon Digital Holdings, Inc. (NASDAQ:MARA) stands ninth on our list of the best cryptocurrency stocks to buy according to hedge funds.
A bitcoin miner, Marathon Digital Holdings, Inc. (NASDAQ:MARA) reported a 91% quarter-over-quarter growth in mined bitcoins at 1,252, valued at $336.3 million, in Q2. In October, DA Davidson initiated its coverage on Marathon Digital Holdings, Inc. (NASDAQ:MARA) with a Buy rating and a $65 price target, highlighting the company’s unique position in crypto mining. Marathon Digital Holdings, Inc. (NASDAQ:MARA) delivered a 2,098% return to shareholders in the past year.
8. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 49
Coinbase Global, Inc. (NASDAQ:COIN), a cryptocurrency exchange platform, went public in April 2021, valued at $85.8 billion. The stock gained 24.02% in the past month.
Recently, Coinbase Global, Inc. (NASDAQ:COIN) has announced its move into the non-fungible token (NFT) space to make the mining purchase easier. In October, JMP Securities lifted its price target on Coinbase Global, Inc. (NASDAQ:COIN) to $330, while keeping an Outperform rating on the shares.
At the end of Q2, ARK Investment Management is the leading shareholder of Coinbase Global, Inc. (NASDAQ:COIN), with shares worth $1.4 billion. Overall, 49 hedge funds tracked by Insider Monkey reported having stakes in the company, valued at over $2.9 billion. There were no hedge fund positions in the company in previous quarters.
Miller Value Partners mentioned Coinbase Global, Inc. (NASDAQ:COIN) in its Q2 2021 investor letter. Here is what the firm has to say:
“Coinbase (COIN) became a public company in mid-April following their direct listing at a reference price of $250. Coinbase is a cryptocurrency exchange that allows consumers, financial institutions and businesses to transact between fiat and cryptocurrencies and securely store and use cryptocurrencies. We believe over the long term the company has the potential to be the leading technology platform in the growing cryptocurrency space.
COIN’s 2021 revenues are expected to be 4.5x its 2020 revenues as crypto prices and volumes have exploded. It trades at 30x this year’s earnings, which is quite a steal for a quickly growing company in this market. That’s because the market believes this is peak cycle revenues and earnings, and retail margins will be pressured. That all very well may be true, but we see significant potential for the business over the long term as the nascent industry continues to grow and COIN cements it’s position as the leading platform.”
7. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:TSLA), an electric vehicle manufacturer, has always been a staunch supporter of digital currencies and started accepting them as payments in February 2021, when the company purchased $1.5 billion worth of bitcoin. However, due to environmental concerns surrounding mining, the company suspended bitcoins as a form of payment but has recently insinuated to resume the practice. Tesla, Inc. (NASDAQ:TSLA) ranks seventh on our list of the best cryptocurrency stocks to buy according to hedge funds.
At the end of Q2, ARK Investment Management is one of the leading shareholders of Tesla, Inc. (NASDAQ:TSLA), with shares worth $3.6 billion. In addition to this, 60 hedge funds tracked by Insider Monkey have positions in the company, compared with 62 in the previous quarter. These stakes are valued at over $9.2 billion.
Recently, Wedbush raised its price target on Tesla, Inc. (NASDAQ:TSLA) to $1,000, with an Outperform rating on the shares. The firm’s analyst Daniel Ives expects another solid quarter from the company as it managed to deliver over 241,000 units in September. Tesla, Inc. (NASDAQ:TSLA) gained 101.9% in the past year.
Like Mastercard Incorporated (NYSE:MA), PayPal Holdings, Inc. (NASDAQ:PYPL), Square, Inc. (NYSE:SQ), NVIDIA Corporation (NASDAQ:NVDA), and Advanced Micro Devices, Inc. (NASDAQ:AMD), Tesla, Inc. (NASDAQ:TSLA) is also one favored by investors in 2021.
Worm Capital LLC mentioned Tesla, Inc. (NASDAQ:TSLA) in its Q3 2021 investor letter. Here is what the firm has to say:
“Our core portfolio as of this writing—TSLA, SPOT, SHOP, ABNB, and AMZN—are all premier examples of companies that use the concept of aggregation of marginal gains to continuously improve their value proposition for customers. After all, what is innovation if not just a continuous search for fractional advantages in business?
The way we see it, Tesla is perhaps the generational example of the marginal gain aggregation theory. It’s also been our largest position for several years now. There are many ways to characterize and value this business (see previous letters for longform write-ups), but perhaps the best way to think about the company is that it is a highly vertically-integrated software and hardware firm that’s devoted entirely to aggregating marginal gains across its organization. The goal? Lower costs, improve thruputs, and dramatically enhance the value proposition—at scale—for consumers…”
6. CME Group Inc. (NASDAQ:CME)
Number of Hedge Fund Holders: 62
CME Group Inc. (NASDAQ:CME) is a financial derivatives exchange that offers trades in cryptocurrencies as well. In Q3 2021, the company reported a 14% year-over-year increase in its average daily volume (ADV) at 17.8 million contracts. CME Group Inc. (NASDAQ:CME) stands sixth on our list of the best cryptocurrency stocks to buy according to hedge funds.
In October, Piper Sandler lifted its price target on CME Group Inc. (NASDAQ:CME) to $230, with an Overweight rating on the shares. Since the beginning of the year, CME Group Inc. (NASDAQ:CME) delivered a 19.13% return to shareholders, while the stock gained 30.9% in the past year.
Of the 873 elite funds tracked by Insider Monkey, 62 hedge funds reported having stakes in CME Group Inc. (NASDAQ:CME) in Q2, up from 60 in the previous quarter. The total value of these stakes is over $2.64 billion.
Cooper Investors mentioned CME Group Inc. (NASDAQ:CME) in its Q1 2021 investor letter. Here is what the firm has to say:
“CME has been owned by the portfolio for five years. CME’s strategic positioning as a monopolistic global financial exchange operator will continue to afford the business a highly attractive margin profile. CME is well managed however we can no longer identify clear value latency opportunities for the management team to execute against and so decided to exit our position.”
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Disclosure. None. 11 Best Cryptocurrency Stocks To Buy According To Hedge Funds is originally published on Insider Monkey.
