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.
5. Bitfarms Ltd. (NASDAQ:BITF)
Average Upside Potential: 68.78%
Bitfarms Ltd. (NASDAQ:BITF) is a global Bitcoin self-mining company which was founded in 2017. The company runs vertically integrated mining operations with onsite technical repair, proprietary data analytics, and company-owned electrical engineering and installation services. The Bitcoin miner has a diversified production platform composed of 8 industrial-scale facilities in Canada, 2 in the US, 1 in Argentina, and 3 in Paraguay. The firm’s data centers are powered by more than 75% renewable power.
Currently, Bitfarms serves as the only publicly traded crypto mining company audited by a Big Four accounting firm. The firm manages one of the largest internationally diversified portfolios of energy contracts in the Bitcoin data center business and has shown ample progress in growing its business. It recently added 220 MW of capacity in Paraguay and Pennsylvania while it energized its 70 MW site in Paso Pe, the company’s largest site to date. Simultaneously, it stepped into the most attractive energy market in the US through its new site in Sharon while unlocking new opportunities beyond Bitcoin mining, such as HPC/AI. For the second quarter, Bitfarms had a hashrate of 11.1 exahashes per second, up from 6.5 exahashes per second in the first quarter. This implies that Bitfarms is implementing a robust growth strategy with a focus on US expansion and diversification from Bitcoin mining.
Based on the aforementioned plans, the firm is well set to reach over 35 exahashes per second in 2025 which will be a 67% growth from 21 exahashes per second, the year-end target for 2024. With the appointment of Ben Gagnon as the Chief Executive Officer who used to be the Chief Mining Officer and has a 9-year past full-time experience in the bitcoin mining industry, Bitfarms is positioned for accelerated growth through 2024. The firm’s impressive energy portfolio and strategic approach to growth rank it among some of the best Bitcoin stocks to buy. As of August 26, the average upside potential for the stock stands at 68.78%.
4. CleanSpark, Inc. (NASDAQ:CLSK)
Average Upside Potential: 86.39%
CleanSpark, Inc. (NASDAQ:CLSK) is a Bitcoin miner that owns and operates multiple data centers that primarily run on low-carbon power. The company uses a sustainable energy mix comprising nuclear, hydroelectric, solar, and wind to mine Bitcoin. Therefore, CleanSpark engages in developing infrastructure for Bitcoin in a responsible manner.
CleanSpark has one of the highest current hashrates of 22.3 exahashes per second among other Bitcoin mining companies. The Bitcoin miner has a proven track record of strategic growth as evidenced by its 129% year-over-year revenue growth and 204% year-over-year hashrate growth from 2023’s third quarter to 2024’s third quarter. It closed the fiscal third quarter of 2024 with a 24% increase in hashrate during the quarter. While the firm is expanding into new states including Tennessee and Wyoming, it is committed to replacing a substantial portion of its fleet before the miners approach the end of their originally expected life cycle thereby positioning itself as the most efficient large-scale publicly traded Bitcoin miner. This prominent industry position in the words of the firm’s CFO Gary Vecchiarelli is evident from an excerpt from the firm’s recent investor presentation:
“By running at max operating power when electricity costs are lowest, and optimizing when electricity costs are higher, we have been able to achieve some of the best margins in the industry, all while maintaining one of the highest realized hashrates in North America.”
Currently, CleanSpark is trading at 23 times its forward earnings, a discount of 3.28% to the sector which deems the stock a cheap investment. As a key player in Bitcoin mining with a clean energy base, the firm has an impressive growth and efficiency record and an average upside potential of 86.39%.
3. Cipher Mining Inc. (NASDAQ:CIFR)
Average Upside Potential: 93.30%
Cipher Mining Inc. (NASDAQ:CIFR) is an industrial-scale Bitcoin mining company that remains dedicated to expanding and strengthening the Bitcoin network’s critical infrastructure in the United States. Cipher focuses on the development and operation of Bitcoin mining data centers in the country. The US-based Bitcoin mining company was incorporated in 2020 and aims to be the market leader in Bitcoin mining growth and innovation.
Cipher Mining Inc. (NASDAQ:CIFR) is uniquely positioned to maximize opportunities in both Bitcoin mining and HPC infrastructure. Recently, the firm strategically expanded into the High-Performance Computing (HPC) business and holds the potential to become a market-leading HPC infrastructure provider since it has secured 4 new North American sites with up to 1.7 GW of capacity and all these sites have adequate access to consistent power, land, and fiber necessary to accommodate HPC. With a team of industry experts with experience at Google, Vantage, and Meta on board and significant early interest from many potential investors and financiers, Cipher is poised to expand.
As indicated by the CEO of Cipher Mining Inc. (NASDAQ:CIFR), the firm currently operates at 8.7 exahashes per second of self-mining hashrate and is on target to achieve 13.5 exahashes per second by the year’s end and 35.0 exahashes per second by 2025’s end, almost 4 times than the current scenario. Cipher has a strong buy rating and an average upside potential of 93.30% amidst ambitious plans for expansion and consistent growth in Bitcoin mining capacity. Thus, Cipher ranks third among the best bitcoin and blockchain stocks to buy according to analysts.
2. Iris Energy Limited (NASDAQ:IREN)
Average Upside Potential: 98.76%
Iris Energy Limited (NASDAQ:IREN) owns, builds, and operates data centers and electrical infrastructure to mine Bitcoin. The company’s business model has been built on sustainably-mined Bitcoin. The founders Dan and Will saw a chance to capitalize on excess renewable energy and support energy networks while having an early conviction on Bitcoin. As a sustainable Bitcoin miner, the company’s sites are powered by 100% renewable energy.
Iris Energy Limited holds a distinctive position in an emerging market by using low-cost excess renewable energy to keep costs low, support communities, and solve the energy market challenges. It has a solid portfolio comprising 260MW of operating data centers while it has plans to expand to 510MW in 2024. Recently in July, the company secured an additional 150MW of immediately available power capacity at its Childress site which increased its total secured grid-connected power capacity to 2,310MW.
Among its peers, Iris qualifies as a large-scale miner with its Bitcoin mining hashrate currently at 10 exahashes per second which was a milestone achieved ahead of schedule and is on track to reach 30 exahashes per second by the last quarter of 2024 which demonstrates the future growth potential. While Bitcoin mining provides the firm a foundation for continued growth, it has diversified its revenue base through AI Cloud Services.
As a leading next-generation data center business powering the future of Bitcoin and AI with a strong market position and the potential for continuous growth, Iris Energy Limited (NASDAQ:IREN) is one of the best publicly listed Bitcoin miners and an attractive stock to buy according to analysts. As of August 26, the average upside potential for the stock is 98.76%.
1. Riot Platforms, Inc. (NASDAQ:RIOT)
Average Upside Potential: 115.83%
Riot Platforms, Inc. (NASDAQ:RIOT) is a vertically integrated Bitcoin mining and digital infrastructure company. The company’s Bitcoin mining data center operations are based in central Texas and Kentucky while Denver and Colorado host the electrical switchgear engineering and fabrication operations. Riot company operates through two primary business segments including Bitcoin Mining and Engineering after the recent termination of the Data Center Hosting business.
Riot Platforms, Inc. (NASDAQ:RIOT) serves as an industry leader in vertically integrated Bitcoin mining. The firm ended the fiscal second quarter of 2024 with the self-mining hashrate deployed up 106% year-over-year. The firm’s core Bitcoin mining segment remained robust after recording strong gross margins despite the Bitcoin halving. Simultaneously, the Engineering segment returned to gross profit in the quarter and accounted for 14% of the total revenue. Riot also acquired the Kentucky Bitcoin miner Block Mining Inc. which has 60 MW of power capacity across two facilities.
The growth prospects for the Bitcoin miner remain bright. By the end of 2024, Riot expects to achieve a total self-mining hashrate capacity of 36 exahashes per second. The firm looks in a good position to accomplish this rate of growth after announcing the successful energization of the Corsicana Facility substation which will have a total capacity of 1 GW once it is fully developed. Such developed capacity will simply deem this facility the largest known Bitcoin mining facility in the world. At the same time, Riot Platforms, Inc. (NASDAQ:RIOT) has increased its 2024 deployed hashrate from 31 exahashes per second to 36 exahashes per second following the aforementioned acquisition of Block Mining.
For investors looking for a cheap investment, Riot is a good option as the stock is currently trading at 22 times its forward earnings, with a discount of 7.26% to the sector. With the company’s ongoing investment to raise its hashrate, scale up its Bitcoin mining business, a solid growth trajectory well set up, and a consensus buy rating, Riot ranks among the best Bitcoin and blockchain stocks to buy according to analysts.
While we acknowledge the potential of RIOT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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