5 Best Cryptocurrency Stocks to Buy According to Hedge Funds

In this article, we discuss 5 best cryptocurrency stocks to buy according to hedge funds. If you want to see more stocks in this selection, check out 10 Best Cryptocurrency Stocks to Buy According to Hedge Funds. 

5. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 140

Apple Inc. (NASDAQ:AAPL) users can trade in crypto using Apple Pay and the company has announced that it is now supporting the Ripple Interledger Protocol. Apple Inc. (NASDAQ:AAPL) might even leap into the cryptocurrency space by providing Apple users a way to mine coins through their IOS/OS devices. Apple Inc. (NASDAQ:AAPL) is one of the favorite cryptocurrency stocks of smart investors. 

On December 1, Piper Sandler analyst Harsh Kumar trimmed forecasts for Apple Inc. (NASDAQ:AAPL) primarily due to iPhone supply constraints from shutdowns in Zhengzhou, China. He slashed his revenue forecast for the December quarter to $119 billion from $127.3 billion and assumed a reduction of 9 million handset units primarily for the new models manufactured in November. However, the analyst observed that COVID restrictions have since been relaxed. He believes Apple Inc. (NASDAQ:AAPL) “remains a formidable brand” and reiterated an Overweight rating on the shares with a $195 price target despite this “temporary reduction from unforeseen events.”

Among the hedge funds tracked by Insider Monkey, 140 funds reported owning stakes in Apple Inc. (NASDAQ:AAPL) at the end of September, compared to 128 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the biggest stakeholder of the company, with a position worth $123.6 billion. 

Here is what Wedgewood Partners specifically said about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:

“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”

4. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 146

Mastercard Incorporated (NYSE:MA), an American multinational fintech firm, is one of the premier cryptocurrency stocks to invest in. The company provides a Crypto Card Program, which helps customers with simple and real-time use of digital currency for daily transactions. Mastercard Incorporated (NYSE:MA) is also initiating a program to let financial institutions provide cryptocurrency trading to their clients.

On November 29, Redburn analyst Fahed Kunwar initiated coverage of Mastercard Incorporated (NYSE:MA) with a Neutral rating. The brand power of debit is dwindling as digital wallets become mainstream, contended the analyst, who believes the market underestimates the cyclical and structural concerns that are weighing down card stocks.

According to Insider Monkey’s Q3 data, 136 hedge funds were bullish on Mastercard Incorporated (NYSE:MA), with collective stakes worth $13.8 billion, compared to 137 funds in the prior quarter worth $15 billion. Charles Akre’s Akre Capital Management is the largest stakeholder of the company, with 5.8 million shares valued at $1.6 billion. 

Here is what L1 Capital International specifically said about Mastercard Incorporated (NYSE:MA) in its Q2 2022 investor letter:

“Growth in electronic payments, the continued shift away from cash and cheques, and the provision of additional services such as fraud identification and prevention continue to power Mastercard Incorporated (NYSE:MA)’s growth (Figure 14). In person cross-border transactions are recovering alongside normalization of travel.

Mastercard and Visa (we have invested in both) continue to dominate the electronic payments industry outside of China, utilizing their own multi-faceted networks as well as Government and third-party payments infrastructure to facilitate transactions. Another perfect example of a ‘Noah’s Ark’ industry structure.

Regulation, technological disruption and disintermediation, and geopolitical constraints are perennial issues for consideration, but Mastercard (and Visa) management have repeatedly demonstrated their ability to manage these issues…” (Click here to read the full text)

3. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 156

Alphabet Inc. (NASDAQ:GOOG) invested nearly $1.5 billion in the blockchain sector between September 2021 and June 2022, and the CEO announced in the beginning of 2022 that Alphabet Inc. (NASDAQ:GOOG) is looking into crypto and blockchain potential. In October 2022, the company announced that users can pay for Google Cloud services using cryptocurrencies through Coinbase’s crypto payment platform, Coinbase commerce. It is one of the premier cryptocurrency stocks to buy according to hedge funds. 

On November 30, Societe Generale analyst Christophe Cherblanc maintained a Buy rating on Alphabet Inc. (NASDAQ:GOOG) but lowered the price target on the shares to $132 from $147. The analyst said cost management has become a top priority for technology investors. For Alphabet Inc. (NASDAQ:GOOG), the issue is less about near-term cyclical pressures than delivering the scale benefits expected from a company with revenues of $280 billion in a “progressively maturing online ecosystem,” the analyst told investors in a research note. He said Alphabet Inc. (NASDAQ:GOOG) remains his preferred online stock despite his trimmed estimates.

Among the hedge funds tracked by Insider Monkey, Chris Hohn’s TCI Fund Management is the leading stakeholder of Alphabet Inc. (NASDAQ:GOOG), with 52.4 million shares worth $5 billion. Overall, 156 hedge funds were bullish on the stock at the end of Q3 2022, compared to 153 funds in the prior quarter. 

Here is what Mayar Capital had to say about Alphabet Inc. (NASDAQ:GOOG) in its third-quarter 2022 investor letter:

“In early January this year – which admittedly feels like eons ago – US President Joe Biden was pushing Americans to take up the government’s offer of free COVID tests to help tackle the surging omicron variant. How did Biden respond when citizens asked about the availability of these tests?

“Google it!”

This advice, undoubtedly well-meant, was roundly scoffed at by the press, however. It seemed too obvious to be very helpful.

Anyway, the anecdote serves to introduce you to one of our largest holdings, Alphabet; the parent company of Google. Note that first, Alphabet’s original and core product – its search engine – has entered our common vocabulary as a verb. ‘Googling’ something has the same meaning as ‘researching’ or ‘finding an answer to’ something. Second, the reason Biden’s advice was met with such opprobrium was because Googling something has become almost second nature to us now.

These two observations reveal a lot about Google’s strength in the search engine market, in which it has a share of over 90 percent. Because internet search is almost the prototypical network, Google has benefitted from – and we think is also protected by – the huge competitive advantage its scale brings – both to those asking the questions and those providing the answers. The Google search platform becomes increasingly useful to anyone seeking information as a greater volume of stuff becomes available. This starts a virtuous cycle that results in a colossal market share for Google itself. In the language of business strategists, Google benefits from vast network effects.

Because Google’s search results are viewed by billions of eyeballs every day, its search page ‘real estate’ is understandably very valuable to those with goods and services to sell. Advertising revenues from this ‘real estate’ as well as that from its other properties such as Mail, Maps, and so on, totaled almost USD 150b in 2021; amounting to almost 58% of the company’s revenues. Ad sales on YouTube, also owned by Alphabet, brought in another USD 28b. With the secular shift of the advertising spend to digital channels – over which Alphabet has a tight grip – we estimate the company has a share of around 40% of the digital advertising market and is probably the most valuable advertising property in the world…” (Click here to see the full text)

2. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 165

Visa Inc. (NYSE:V), an American payments technology company, offers a crypto consulting service to its clients and has made multiple investments in crypto platforms as a way to mainstream the adoption of digital currencies. On October 7, Visa disclosed that it is partnering with global crypto exchange FTX to provide debit cards in 40 countries in Latin America, Asia, and Europe. This has resulted in more than 70 crypto partnerships. Visa Inc. (NYSE:V) is one of the best cryptocurrency stocks to monitor. 

On November 28, Baird analyst David Koning said Visa Inc. (NYSE:V) offered updated operating metrics through November 21 which demonstrated that quarter-to-date trends are higher than his Q1 estimates. He said he likes it a lot given numerous benefits amid macro uncertainty including inflation, rising rates on big cash balances, recovery in the Asia Pacific, and easy comps on Russia in the second half of 2023. The analyst reaffirmed his Outperform rating and a $250 price target on Visa Inc. (NYSE:V) shares.

Among the hedge funds tracked by Insider Monkey, Visa Inc. (NYSE:V) was part of 165 public stock portfolios at the end of September 2022, up from 166 in the prior quarter. Ken Fisher’s Fisher Asset Management is a prominent stakeholder of the company, with a position worth $1.5 billion. 

Baron Funds made the following comment about Visa Inc. (NYSE:V) in its Q3 2022 investor letter:

“Shares of global payment network Visa Inc. (NYSE:V) fell despite reporting financial results that beat Street forecasts and sustained volume growth in recent months. Revenue grew 19% and EPS grew 33% in the most recent quarter, and double-digit payment volume growth persisted through August. Share price weakness represented a reversal of outperformance earlier this year and may be due to foreign exchange headwinds and concerns about a potential weakening of consumer spending. We continue to own the stock due to Visa’s long runway for growth and significant competitive advantages.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 269

Microsoft Corporation (NASDAQ:MSFT) was one of the first technology firms to back the crypto industry. In 2014, the company partnered with Bitpay, allowing users to use Bitcoin as a payment method to purchase  apps and games for Windows Phone, Xbox, and Windows operating systems. At the end of September 2022, M12, Microsoft Corporation (NASDAQ:MSFT)’s venture capital arm, led a $20 million funding round for Web3 startup Space and Time as the company focuses on decentralization of data.

On November 29, Morgan Stanley analyst Keith Weiss said that investors are concerned that Microsoft Corporation (NASDAQ:MSFT)’s estimates have not been derisked and contended that short-term investor concerns primarily fall into two categories, margins and revenue growth. However, he sees a solid and durable demand in the commercial businesses that should result in accelerating revenue and EPS growth in the second half of 2023, said the analyst, arguing that Microsoft Corporation (NASDAQ:MSFT)’s “unique positioning as a consolidator” should drive demand that holds up better than investors fear. He has an Overweight rating and a $307 price target on Microsoft Corporation (NASDAQ:MSFT) shares.

According to Insider Monkey’s Q3 data, 269 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 258 funds in the earlier quarter. Bill & Melinda Gates Foundation Trust is the largest position holder in the company, with 39.2 million shares valued at $9.14 billion. 

Diamond Hill made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2022 investor letter:

“Also among our bottom contributors were media and technology giant Alphabet, software and IT services provider Microsoft Corporation (NASDAQ:MSFT) and insurance company American International Group (AIG). Microsoft shares declined in Q3, along with other tech companies, as rising interest rates impacted the near-term outlook. We expect the business to continue to generate strong revenue growth and benefit from operating leverage. Microsoft’s cloud computing services business, Azure, is generating robust growth, confirming its competitive positioning.”

You can also take a look at 11 Safe Healthcare Stocks for Retirement and 12 Best Defensive Stocks To Buy Now.