In this article, we discuss 11 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 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 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 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 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, comapred to 28 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the biggest stakeholder of the company.
Like Mastercard Incorporated, NVIDIA Corporation, and Visa Inc., Coinbase Global Inc 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. 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. 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., 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. in its Q3 2022 investor letter:
“The most notable new position this year has been our investment in Interactive Brokers Group, Inc.. 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. 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. to $218 from $200 and maintained a Buy rating on the shares. The analyst noted that CME Group Inc.’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. 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., 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. in its Q4 2022 investor letter:
“CME Group Inc. 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 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 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 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, 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 in its Q4 2022 investor letter:
“A third approach to return generation is purchasing idiosyncratic businesses that largely control their own destiny. Intel Corporation, 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. 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. 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. 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. shares. A recent report alleged that Block, Inc.’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., 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. was one of them. Here is what the fund said:
“Block, Inc. 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 network, would transact in US dollars and provide cryptocurrency rewards on purchases made in any category. Smart investors consider American Express Company to be one of the top stocks to invest in within the cryptocurrency market.
On March 9, American Express Company 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 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, 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 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 was one of them. Here is what the fund said:
“In financials, American Express Company 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.”
5. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 100
In November 2022, JPMorgan Chase & Co., which is one of the largest banks in the United States, registered a trademark for cryptocurrency wallets. The bank is placing its focus on providing cryptocurrency payment services, which may include crypto payment processing, virtual checking accounts, and other similar services. It is one of the best crypto stocks to monitor. On March 22, JPMorgan Chase & Co. declared a $1.00 per share quarterly dividend, in line with previous. The dividend is payable on April 30, to shareholders of record on April 6.
On March 13, Wells Fargo upgraded JPMorgan Chase & Co. to Overweight from Equal Weight with a price target of $155, up from $148. The analyst believes that JPMorgan Chase & Co. embodies the firm’s banking theme of “Goliath is Winning” and will benefit from market share gains and a more diversified business in uncertain times. The analyst also noted that JPMorgan Chase & Co. has a strong balance sheet and has weathered past economic downturns, making it well-prepared for future challenges. Despite ongoing investments, Wells Fargo expects JPMorgan’s revenue to grow faster than expenses.
According to Insider Monkey’s Q4 data, 100 hedge funds were bullish on JPMorgan Chase & Co., compared to 110 funds in the earlier quarter. Edgar Wachenheim’s Greenhaven Associates is a prominent stakeholder of the company, with 4.8 million shares worth $643 million.
Here is what Vltava Fund has to say about JPMorgan Chase & Co. in its Q3 2022 investor letter:
“We regard JPM to be the strongest and best- managed bank in the world. It is a leader in investment banking, commercial banking, credit cards, and asset management. Its size (the largest bank in the USA, with nearly USD 4,000 billion in assets) and diversification give it a strong competitive advantage that is compounded by its cost advantages and the high costs to clients associated with switching banks. JPM’s management prides itself on running the only large bank to avoid major instability over the long term.
JP Morgan’s quality and strength first became fully evident in 2008 under the leadership of its CEO Jamie Dimon. Not only did JP Morgan help to stabilize the market by taking over the failing Bear Stearns in the spring of that year, but throughout the Great Financial Crisis it was the only big US bank that did not require government assistance and it was highly profitable even in the difficult year of 2008.
A well-functioning and efficient bank can be a very good long-term investment, because the interest compounding effect works well here. JPM’s return on equity (ROE) is well into the double digits and this puts it in a good position to continue producing better long-term returns than does the market. JPM has been very profitable even during years when interest rates were close to zero. The current – and perhaps not temporary – return to somewhat more normal, higher interest rates should have a significantly positive impact on the bank’s interest income and overall profitability.”
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 106
NVIDIA Corporation provides graphics, compute, and networking solutions in the United States, Taiwan, China, and internationally. It is also responsible for providing cryptocurrency mining processors, making it one of the top stocks in the crypto space. NVIDIA Corporation is set to pay a $0.04 per share quarterly dividend on March 29, to shareholders of the company as of March 8.
On March 23, Needham raised its price target on NVIDIA Corporation’s stock from $270 to $300 and maintained a Buy rating. The firm predicts that the stock’s valuation will increase in the near future due to several factors, including the strength of NVIDIA Corporation’s data center business, reduced headwinds in the gaming sector, and increased traction in the inference and software markets. The firm also noted that Nvidia’s most significant growth engine, the end-market, is experiencing a recovery as hyperscaler sales have increased in recent quarters, providing greater visibility.
According to Insider Monkey’s Q4 data, 106 hedge funds were long NVIDIA Corporation, compared to 89 funds in the prior quarter. Matrix Capital Management is a prominent position holder in the company.
ClearBridge Large Cap Growth Strategy made the following comment about NVIDIA Corporation in its Q4 2022 investor letter:
“Promoting diversification and managing risk continue to guide our transaction activity, with a focus on the earnings trajectory of existing and potential holdings leading to our most recent moves. We are directing our research efforts to identifying names that are closer to the bottom than the top in terms of earnings and valuations, adding to our positions in ASML, the leading supplier of high-end production equipment to chip makers, and NVIDIA Corporation, whose valuation has washed out due to weakness in gaming and crypto mining as well as slowing enterprise spending.”
3. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 115
PayPal Holdings, Inc. (NASDAQ:PYPL) is a technology company that provides digital payment solutions through a variety of brands, including PayPal, Venmo, and Xoom. In August 2022, the company revealed that its users can now transfer cryptocurrency from PayPal to external crypto addresses without incurring any network fees. PayPal Holdings, Inc. and Galaxy Digital partnered together to lead a seed funding round worth $20 million for Chaos Labs on February 21. Chaos Labs is a startup that offers an automated economic security system for cryptocurrency protocols. The funding will be used by Chaos Labs to expand its offerings and develop its suite of risk and security products focused on decentralized finance.
On February 13, BMO Capital’s James Fotheringham maintained an Outperform rating on PayPal Holdings, Inc., but lowered the price target from $117 to $108. Despite the Q4 earnings beat driven by lower costs, the firm expects lower organic revenue growth potential and has adjusted its price target based on this. While BMO raised its FY23 EPS outlook to $4.87, revenue growth remains the key factor affecting the stock’s valuation rather than margins, as per the analyst’s research note.
According to Insider Monkey’s fourth quarter database, 115 hedge funds were long PayPal Holdings, Inc., compared to 126 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is a significant position holder in the company, with 6.75 million shares worth $481 million.
Horos Asset Management made the following comment about PayPal Holdings, Inc. in its Q4 2022 investor letter:
“As I mentioned at the beginning of this quarterly letter, we took advantage of the meltdown in technology platforms to initiate new positions in companies in which we had already been shareholders in the past and whose valuation did not, until now, provide a sufficiently high margin of safety. Such is the case of PayPal Holdings, Inc. and Baidu.
PayPal is one of the world’s largest online payment companies and the leader (ex-China) among digital wallets. The company operates on both sides of a transaction, offering services that facilitate buying for its users and selling for merchants, acting as a payment gateway. In recent years, PayPal has expanded its ecosystem, organically and inorganically, into other financial services (business and consumer lending, remittances, fraud prevention, dataphones, card payments, etc.) and marketing (discounts, targeted campaigns, etc.). Its most successful current products are probably Venmo (an app with services like PayPal, but with a social network component, which successfully attracts a younger audience), Braintree (payment gateway) and its interest-free consumer finance service (Buy Now, Pay Later).
This rich ecosystem has allowed PayPal to continue its high growth in recent years, reaching 432 million active accounts (of which some 35 million correspond to merchants) by the end of the third quarter of 2022, as well as increasing the attractiveness for its customers, as evidenced by the record number of transactions per account recorded in the latest earnings release. In addition to this, PayPal has achieved a historic milestone, reaching an agreement with Amazon that will allow its customers to buy products with Venmo’s payment service. However, not all has been good news for PayPal in recent years. The reality is that this growth has not been accompanied by the operating leverage that was expected, which contributed to the negative sentiment towards the company in 2022, already elevated due to the burst in the tech sector valuations and the recessionary environment in many economies where PayPal operates. However, the management team has taken action and is starting a series of initiatives to expand margins significantly over the next few years. This turnaround, coupled with a (now) very attractive valuation, led us to reinvest in the company.”
2. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 139
Mastercard Incorporated is a leading fintech company that offers an excellent investment opportunity in the cryptocurrency market. It provides a Crypto Card Program that enables customers to use digital currency for their everyday transactions in a straightforward and timely manner. Additionally, Mastercard Incorporated is launching a new program that allows financial institutions to offer cryptocurrency trading services to their clients. On February 14, Mastercard Incorporated declared a $0.57 per share quarterly dividend, in line with previous. The dividend is distributable on May 9, to shareholders of record on April 7.
On January 30, Mizuho analyst Dan Dolev raised the firm’s price target on Mastercard Incorporated to $405 from $380 and maintained a Buy rating on the shares following the “solid” Q4 results.
According to Insider Monkey’s fourth quarter database, 139 hedge funds were long Mastercard Incorporated, compared to 146 funds in the last quarter. Charles Akre’s Akre Capital Management is the biggest stakeholder of the company, with 5.86 million shares worth over $2 billion.
Baron FinTech Fund made the following comment about Mastercard Incorporated in its Q4 2022 investor letter:
“Shares of global payment network Mastercard Incorporated increased after reporting strong quarterly results, with 15% revenue growth and 13% EPS growth despite significant headwinds from currency movements and the suspension of operations in Russia. Payment volume grew 21% in local currency (excluding Russia) as consumer spending remained resilient and the international travel recovery continued as border restrictions were lifted. We continue to own the stock due to Mastercard’s long runway for growth and significant competitive advantages.”
1. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 177
As of the top companies in payments technology, Visa Inc. provides a cryptocurrency consulting service to its customers and has invested in various crypto platforms to promote the widespread acceptance of digital currencies. Visa Inc. is a recommended stock to keep an eye on for those interested in cryptocurrency. On January 26, the company reported a FQ1 non-GAAP EPS of $2.18 and a revenue of $7.9 billion, outperforming Wall Street estimates by $0.17 and $200 million, respectively.
According to a research note by Jefferies analyst Trevor Williams, Visa Inc. recently released an update on its performance indicators for February, which was viewed as largely positive. The company reported that payment volumes in the United States were similar to those in January over a four-year period, indicating continued consumer strength in the US, while cross-border volumes increased. Based on trends observed so far in the quarter, the analyst predicts that there will be a minimum of 3% improvement in Street estimates for both international transaction fees and data processing. Jefferies maintained a Buy rating on Visa Inc.’s shares and set a $260 price target on March 3.
In the fourth quarter of 2022, Visa Inc. was part of 177 hedge fund portfolios, compared to 165 in the prior quarter. Andreas Halvorsen’s Viking Global is one of the biggest stakeholders of the company, with 5.7 million shares worth $1.20 billion.
Baron FinTech Fund made the following comment about Visa Inc. in its Q4 2022 investor letter:
“Shares of global payment network Visa Inc. increased after reporting strong quarterly results, with 19% growth in revenue and EPS despite currency headwinds and the suspension of operations in Russia. Payment volume grew 16% in local currency (excluding Russia and China) with notable strength in cross-border volumes driven by rebounding international travel. Management also provided encouraging guidance for the next fiscal year. We continue to own the stock due to Visa’s long runway for growth and significant competitive advantages.”
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This article is originally published at Insider Monkey.
