We recently compiled a list of the 20 Best Cryptocurrency Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Bitfarms Ltd. (NASDAQ:BITF) stands against the other cryptocurrency stocks.
A Review of the Crypto World: Latest Updates
Crypto has emerged as a major political issue in the US with the campaigns for election going on. Head of Firmwide research Galaxy Digital Alex Thorn called August a rough and seasonally bad week for Bitcoin. He mentioned how eight out of the eleven prior Augusts witnessed the major coin trading down. However, political events have also played a role in the crypto landscape.
In Thorn’s opinion, most people view Trump’s victory as bullish for the crypto market. Trump who is now running for President brought the hopes of the crypto world higher by promising to deliver a plan to make the United States the ‘crypto capital of the planet’. Crypto became an even hotter topic as Kamala Haris simultaneously supported policies for the expansion of the industry. In the opinion of Thorn, most people view Trump’s victory as bullish for the crypto market. He predicts crypto will run quite higher if Trump ends up winning the election based on an anticipated easing of the regulations. On the other hand, he expects the victory of Harris to be more neutral even for the industry since those advising her belong to the Biden administration on crypto policy.
Looking forward to September which is a seasonally weak month for crypto too, the next months including October, November, and December are crypto’s most bullish months based on the seasonality factor. Regardless of the highly awaited Fed interest rate cuts just ahead of us, the crypto market investors still remain concerned as JPMorgan’s Head of Global and European Equity Strategy dismissed the potential of a crypto bull market. While September has been a historically worst month for US stocks, the upcoming rate cut might be an outlier in history.
In an interview with CNBC, Anthony Pompliano, Professional Capital Management CEO, talked about the recent price moves in Bitcoin. The German government offloading Bitcoin through as many exchanges and the Bitcoin exchange Mt. Gox unloading coins onto the market are two important events defining this supply. Pompliano refers to Bitcoin as really illiquid with many Bitcoin holders having a long-term view of it. At the start of 2024, the Bitcoin amount that had not moved in more than a year was over 70%. Some of it started to get distributed as prices rose, as expected in a bull market. Although Pompliano expects this percentage to drop to 50% to 55% but still at least half of the Bitcoin would still be in the hands of people who have an over 10-year time horizon. Thus, the question revolves around whether these hands are strong enough to outlast the aforementioned two events. Pompliano finally states time as the only catalyst for Bitcoin rather than a pro-crypto candidate in the upcoming US elections. While the summer season is a bit slow, prices typically go back up in September and beyond.
Our Methodology:
In order to compile a list of the 20 best cryptocurrency stocks to buy according to hedge funds, we sifted through ETFs and online rankings to compile a preliminary list of 40 companies involved in the crypto space. Moving on, we shortlisted the top 20 stocks from our list which had the highest number of hedge fund holders. The 20 best cryptocurrency stocks to buy according to hedge funds have been arranged in ascending order of the number of hedge fund holders they have, as of Q2 2024.
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).
A bustling server farm, reflecting the company’s investment into cryptocurrency mining.
Bitfarms Ltd. (NASDAQ:BITF)
Number of Hedge Fund Holders: 16
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 comprising 8 industrial-scale facilities in Canada, 2 in the United States, 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. 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.
At the end of August, Bitfarms Ltd. (NASDAQ:BITF) revealed its plans to acquire Stronghold Digital Mining, Inc., a vertically integrated crypto asset mining company. This transformative acquisition is anticipated to potentially raise Bitfarm’s energy portfolio to over 950 MW by the end of 2025. The transaction is expected to close in the first quarter of 2025.
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 has a prior 9-year full-time experience in the mining industry, Bitframs 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 crypto stocks to buy. As of Q2 2024, the stock was held by 16 hedge funds while Millennium Management was the most dominant shareholder.
Overall BITF ranks 17th on our list of the best cryptocurrency stocks to buy according to hedge funds. While we acknowledge the potential of BITF 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 BITF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
