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 11 Best Cryptocurrency Stocks To Buy According To Hedge Funds. 

5. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 100

In November 2022, JPMorgan Chase & Co. (NYSE:JPM), 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. (NYSE:JPM) 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. (NYSE:JPM) to Overweight from Equal Weight with a price target of $155, up from $148. The analyst believes that JPMorgan Chase & Co. (NYSE:JPM) 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. (NYSE:JPM) 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. (NYSE:JPM), 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. (NYSE:JPM) 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 (NASDAQ:NVDA) 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 (NASDAQ:NVDA) 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 (NASDAQ:NVDA)’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 (NASDAQ:NVDA)’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 (NASDAQ:NVDA), 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 (NASDAQ:NVDA) 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 (NASDAQ:NVDA), 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. (NASDAQ:PYPL) 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. (NASDAQ:PYPL), 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. (NASDAQ:PYPL), 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. (NASDAQ:PYPL) 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. (NASDAQ:PYPL) 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 (NYSE:MA) 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 (NYSE:MA) is launching a new program that allows financial institutions to offer cryptocurrency trading services to their clients. On February 14, Mastercard Incorporated (NYSE:MA) 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 (NYSE:MA) 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 (NYSE:MA), 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 (NYSE:MA) in its Q4 2022 investor letter:

“Shares of global payment network Mastercard Incorporated (NYSE:MA) 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. (NYSE:V) 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. (NYSE:V) 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. (NYSE:V) 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. (NYSE:V)’s shares and set a $260 price target on March 3. 

In the fourth quarter of 2022, Visa Inc. (NYSE:V) 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. (NYSE:V) in its Q4 2022 investor letter:

“Shares of global payment network Visa Inc. (NYSE:V) 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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