In this article, we will look at the 12 Crypto Stocks with the Biggest Upside Potential.
Bitcoin Continues Its All-Time Highs
On December 16, Bitcoin reached another all-time high, soaring above $107,000 as investors anticipate an interest rate cut by the Federal Reserve later in the week. The two-day policy meeting will conclude on December 18, and investors are anticipating the Fed to lower interest rates. According to the CME FedWatch Tool forecast, there is a 96% chance of a 25-basis-point cut. This is expected to materialize as a positive trend for Bitcoin. Since Bitcoin often trades like a tech stock, it has the ground to seek benefit from lower interest rates.
In addition, lower interest rates imply a growing money supply and a weakening dollar. Both of these happenings have exhibited long-term correlations with Bitcoin. According to CNBC, Bitcoin has rallied 52% since the US presidential election and 149% for 2024. Trump’s upcoming administration is expected to have a friendly regulatory environment and potentially establish a national strategic Bitcoin reserve. This has been a powerful catalyst for Bitcoin and cryptocurrencies at large.
Bitcoin ETFs Surpass Satoshi Nakamoto’s Holdings
One of the biggest volume drivers among institutions this year has been the Bitcoin ETFs that launched in January 2024, closing out the year with a collective market cap of more than $100 billion. On December 17, Todd Ruoff of Autonomys appeared on CNBC to discuss the performance of these Bitcoin ETFs in 2024 and their potential outlook in 2025. Ruoff was of the view that the adoption trends the industry saw on the institutional level were remarkable. These trends were amplified by the supply side being reduced with Bitcoin’s halving. This, by far, exceeded expectations. Analogies are being made to gold, which it has by far surpassed. The expectation is that the acceleration is expected to continue into 2025.
The collective Bitcoin holdings for ETF issuers in the States recently surpassed Satoshi Nakamoto’s supposed holdings. US spot Bitcoin ETFs are now collectively the largest holders of Bitcoin, reflecting the idea that institutions are taking over Bitcoin. According to CNBC, the 12 spot Bitcoin ETFs in existence drove one of the most successful ETF launches in history after their January launch, collectively passing $100 billion in assets under management. These funds now hold slightly more than 1.1 million Bitcoin, which translates to nearly 5% of all the Bitcoin in existence. This number exceeds the supposed holdings of the legendary pseudonymous founder Satoshi Nakamoto, who is believed to hold as much as 1.1 million Bitcoin.
Ruoff said that Satoshi Nakamoto’s wallets have always been considered the Fort Knox of the Bitcoin industry. To see the ETFs collectively surpassing this level has been an astounding trend in the industry. Ruoff was of the view that the industry has so far benefitted from some big-name recognition, with key industry players bringing trust and credibility to the crypto world. However, with the anticipated seat change in the SEC and the expected regulatory softening, Ruoff does not believe that the regulators are ready to lay down and let anything happen in crypto. There is still considerable work that needs to be undertaken in the industry.
What is 2025 Going to Look Like for Crypto?
Looking at the 2025 outlook, Ruoff said that the large players in the crypto industry bring a great reputation to the space, giving people a perception of legitimacy and competent management for investors. In his opinion, this is going to attract the majority of investment. Smaller players are going to have difficulty competing due to various factors, such as not being able to compete with the inflows. As the market becomes overcrowded and saturated, the circumstances could lead to a consolidation. Some of the smaller underperforming ETFs will likely continue struggling to gain market share, eventually being left with no other option but to merge with another institution.
Ruoff also believed that Bitcoin had nothing to worry about in 2025. He said that while regulation might be the biggest roadblock to crypto as a currency in 2025, the industry is on the way to overcoming it with a crypto-friendly administration coming in.
With these trends in view, let’s look at the 12 crypto stocks with the biggest upside potential.
Photo by bitcoin executium on Unsplash
Our Methodology
We first utilized stock screeners, ETFs, and online rankings to make an extended list of 30 crypto companies. We then shortlisted the top 12 stocks from our list with the highest analyst upside potential, as of December 17. The 12 crypto stocks with the biggest upside potential are arranged in ascending order of their upside potential.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Crypto Stocks with the Biggest Upside Potential
12. Robinhood Markets, Inc. (NASDAQ:HOOD)
Analyst Upside: 13.43%
Robinhood Markets, Inc. (NASDAQ:HOOD) offers an inclusive financial services platform for everyone. Its platform allows users to invest in and trade stocks, ETFs, options, and cryptocurrencies among other financial instruments. Its Robinhood Crypto, LLC segment allows commission-free cryptocurrency trading. Customers can automatically buy commission-free cryptocurrency through the platform on a schedule of their choosing. It provides crypto recurring investments, and also keeps custody of cryptocurrencies on behalf on its customers in two types of wallets: cold wallets and hot wallets. Hot wallets are managed online, whereas cold wallets operate entirely offline.
The company has three primary areas of focus: winning the active trader market, expanding internationally, and increasing wallet share with its customers. It made substantial progress in all of these areas of focus in fiscal Q3 2024. Robinhood Markets, Inc. (NASDAQ:HOOD) has strong financials in place. Fiscal Q3 2024 proved to be another profitable quarter for the company, marking its second highest revenues ever. Total revenue grew by 36% year-over-year, and adjusted EBITDA increased substantially by 96% from a year ago.
Robinhood Markets, Inc. (NASDAQ:HOOD) is continuing to increase its wallet share. Its net deposits for fiscal Q3 2024 were $10 billion or more for the third consecutive quarter. This brings the company to $34 billion year-to-date, going above its record of $31 billion in 2020. Its customer assets under custody also grew to a record high of $152 billion, reflecting its increasing market growth. The company ranks 12th on our list of the 12 crypto stocks with the biggest upside potential.
11. Core Scientific, Inc. (NASDAQ:CORZ)
Analyst Upside: 14.73%
Core Scientific, Inc. (NASDAQ:CORZ) operates digital infrastructure for Bitcoin mining and high-performance computing. It operates specialized, purpose-built facilities for digital asset mining. The company leverages its own fleet of computers, called miners, to earn Bitcoin for its own account, and also provides hosting services for Bitcoin mining and high-performance computing customers at eight US-based operational data centers.
Core Scientific, Inc. (NASDAQ:CORZ) is strengthening its Bitcoin mining business by completing a 100-megawatt expansion at its Pecos, Texas Bitcoin mining data center to house its miners. It also made significant miner migrations, and started the partial demolition of two of its data centers tapped for HPC hosting during fiscal Q3 2024. The company earned 1,115 Bitcoin in fiscal Q3 2024, and generated a total revenue of $95 million. Its diversification into HPC hosting is segment is also running smoothly and bringing positive momentum for the company. The HPC segment yielded $10.3 million in revenue in fiscal Q3 2024.
The company allocated an additional 100 megawatts of its infrastructure previously designated for Bitcoin mining to HPC. This increased its total capacity for HPC hosting to around 570 megawatts of critical IT load. Core Scientific, Inc. (NASDAQ:CORZ) is also acquiring new sites. It leased with an option to buy an existing data center in Alabama with a critical IT load of 11 megawatts. This deal holds the potential to support an additional 55 megawatts of critical IT load for the company.