In this article, we will be covering the 7 best bitcoin and blockchain stocks to buy according to analysts while navigating through the broader crypto industry.
What Has Been Happening in the Crypto Industry?
While the digital medium of exchange, cryptocurrency, is created and stored electronically on the blockchain, the most recognized form of it is Bitcoin. Bitcoin has undergone a major historical event in the first quarter of this year. This was when the block reward for bitcoin miners was decreased from 6.25 BTC per mined block to 3.125 BTC per mined block on April 19, also known as the halving event. This halving event is pre-planned and takes place once every four years to slow the pace at which new coins are created. Through this reduced supply of the coin, the concept of Bitcoin as digital gold remains maintained. Previously, Bitcoin halved in 2012, 2016, and 2020.
The impact of this event was most profound for Bitcoin miners who saw their profitability drop due to a reduction in block rewards. Miners who had access to reliable and inexpensive power sources were believed to better deal with the challenges after the Bitcoin halving event. The hashrate is important to be studied in this regard since it is the speed at which a computer can perform hashing computations. Thus, a higher hash rate means higher chances of successfully mining a block and receiving the block reward, a certain amount of BTC received as a reward after validating a new block of transactions. In the latter part of this article, we will be talking about how some of the most efficient miners stayed resilient after this reward halving. To read more about the Bitcoin companies and their response to the macro environment in 2024, you can go through our recent piece on the 15 Biggest Publicly Traded Bitcoin Companies.
The Ongoing US Politics: An Opportunity for the Crypto Industry?
Under the current political dynamics in the US, the crypto industry sees an opportunity with ongoing talks about how Vice President Kamala Harris now running for President, could probably be in support of emerging tech such as the crypto industry. However, the critics oppose the view. In an interview with CNBC, Dennis Kelleher, CEO of Better Markets, emphasized that Harris should not accept pressure from the crypto industry. He mentions the foremost reason behind this as crypto not being among the top concerns of Americans. Among the 88% of Americans who have heard of crypto, a majority 75% of them have hostile views of it. Furthermore, between 61% and 75% of the voters in six of the key swing states view crypto negatively.
Secondly, crypto lacks any legitimate and socially acceptable use with its least harmful use being speculation and gambling. Thirdly, Vice President Harris has been an advocate of investor and consumer protection so she should support the core elements of the financial system, in the views of Kelleher. Lastly, crypto has been discriminating against people of color as they tend to lose money relative to the traditional financial system. While Kelleher believes that innovation and investing in technology are fundamental to the US economy, he states that all financial products need to be federally regulated while the crypto industry seeks special treatment regarding this form of regulation.
Simultaneously, crypto is being embraced through a boost of innovation and forward-thinking as evident from the state of Wyoming which looks forward to launching the country’s first US government-issued stablecoin. The state governor Mark Gordon sees a bright future for digital assets and thinks that the entrepreneurial state could make a difference. Another development in the market was Bitcoin moving 1.84% higher and surpassing the $61,000 mark after Fed Chairman Powell signaled an adjustment to the US monetary policy after months of soaring interest rates. With the most anticipated interest rate cuts on the horizon, the crypto industry will have to wait and watch how the circumstances unfold.
With that being said, let’s move to the 7 best bitcoin and blockchain stocks to buy according to analysts.
Our Methodology:
In order to compile a list of the 7 best bitcoin and blockchain stocks to buy according to analysts, we first sifted through ETFs and online rankings to gather a preliminary list of 25 relevant stocks. We then selected the top 7 stocks that had the highest upside potential. The 7 best bitcoin and blockchain stocks to buy according to analysts are arranged in ascending order of their average upside potential, as of August 26.
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).
7 Best Bitcoin and Blockchain Stocks To Buy According to Analysts
7. TeraWulf Inc. (NASDAQ:WULF)
Average Upside Potential: 55.75%
TeraWulf Inc. (NASDAQ:WULF) is an infrastructure-focused Bitcoin mining company that generates domestically produced Bitcoin powered primarily by nuclear and hydro energy. The company develops, owns, and operates fully integrated Bitcoin mining facilities across the United States. As of now, TeraWulf operates two bitcoin mining facilities including the Nautilus Cryptomine Facility in Pennsylvania which is directly powered by nuclear energy, and the Lake Mariner Facility in New York which utilizes more than 91% zero-carbon energy sourced from the grid.
TeraWulf’s extensive 600 megawatts of owned and scalable infrastructure serves as its competitive edge. The firm qualifies as one of the efficient public Bitcoin miners and digital infrastructure owners with a fleet efficiency of 23.7 joules per terrahash. TeraWulf has solidified its existing market position by utilizing its successful bitcoin mining as the foundation for strategically moving into alternative compute hosting. Financed by an industry-leading OEM, the Bitcoin miner committed to purchasing a 128 GPU cluster from NVIDIA in the recent quarter.
For the second quarter of 2024, TeraWulf recorded a 130.2% year-over-year revenue growth regardless of the Bitcoin reward halving in April and successfully mined 699 bitcoins across its facilities. The increase in revenue was facilitated by the higher average bitcoin price growth relative to 2023 and growth in operating self-mining hashrate. Additionally, the completion of Building 4 at the wholly-owned facility Lake Mariner has increased the firm’s bitcoin mining infrastructure capacity to 245 MW while the ongoing construction on Building 5 will contribute an additional 50 MW of infrastructure capacity by 2025’s first quarter.
The above strategic positioning and large-scale facilities have equipped TeraWulf to become a leading name in the crypto industry. The firm’s focus on scalable zero-carbon energy infrastructure as a differentiating factor coupled with its average upside potential of 55.75% ranks it among the 7 best bitcoin and blockchain stocks to buy according to analysts.
6. Bit Digital, Inc. (NASDAQ:BTBT)
Average Upside Potential: 56.25%
Bit Digital, Inc. (NASDAQ:BTBT) is a large-scale publicly-listed Bitcoin miner and AI Infrastructure provider. The firm operates as a sustainable platform for digital assets and artificial intelligence infrastructure. It has two revenue streams including bitcoin mining and high-performance computing (HPC) services. Bit Digital’s bitcoin mining operations are situated in the United States, Canada, and Iceland. The firm operates Bit Digital AI as an established business line that provides infrastructure services for artificial intelligence applications. Bit Digital strives to achieve its mission of building the premier digital asset mining and HPC services platform while being highly sustainable.
Bit Digital’s diversified revenue streams reduce its exposure to digital asset price volatility. With a fleet of over 50,000 specialized computers, the firm has an institutional-scale Bitcoin mining business. During the second quarter, the firm’s total revenue increased 220% year-over-year to $29 million while the active hashrate climbed 44% to 2.6 exahashes per second. The revenue rise was driven by a higher realized bitcoin price and the commencement of the firm’s high-performance computing services business.
Revenue from bitcoin mining was $16.1 million, an 80% increase year-over-year while the HPC business recorded $12.5 million of revenue. The company has also signed a binding term sheet with Boosteroid Inc., the third-largest cloud gaming provider globally following Microsoft and Nvidia, something that is expected to generate approximately $13 million in revenue for Bit Digital over the five-year term.
Analysts hold a consensus Buy rating on the stock and their 1-year median price target points to a 56.25% upside from the current stock price. With revenue more than doubling from the prior year, gross margins expanding by over 1,000 basis points through business diversification, and network hashrate being resilient despite a reduction in block rewards, Bit Digital is in a good place to benefit from its HPC segment amidst the challenging mining economics.
