We recently published a list of 7 Most Profitable Cryptocurrency Stocks To Invest In. In this article, we are going to take a look at where Block, Inc. (NYSE:SQ) stands against other most profitable cryptocurrency stocks to invest in.
Where is the Crypto Industry Heading?
Bitcoin recently bounced back to the $62,000 level in the week ended October 11. Simultaneously, Ether jumped 1.73% to $2,443 and Solana climbed 4.23% to $144. The weekly performance reflected a quiet crypto market with Bitcoin slightly dipping while Ether and Solana inching up by less than 1%.
Amidst changing interest rates, Circle’s CEO Jeremy Allaire discussed the impact on the stablecoin market in an interview with CNBC. In his opinion, the Federal Reserve changes interest rates as a tool to either increase or lower or to take a neutral position with respect to the velocity of money in the economy. According to the general view, lower interest rates are better for the markets as the cost of capital becomes less. He considers lower interest rates as a really good thing for a stablecoin issuer like Circle as more capital will be put to work and so the velocity of money will increase and so will the demand for stablecoin money.
Apart from the interest rates, positive news for the crypto industry has come after almost 2 years of the crypto exchange FTX collapse. According to the firm, former customers are to recover a sum worth nearly 119% of what their accounts had at the bankruptcy time. Regarding this, FTX’s current chief executive John. J. Ray III stated that:
“Looking ahead, we are poised to return 100% of bankruptcy claim amounts plus interest for non-governmental creditors through what will be the largest and most complex bankruptcy estate asset distribution in history”
Crypto and Elections 2024
With the upcoming 2024 election, the crypto world continues to look forward to what the candidates say about digital currency. After formerly railing against cryptocurrencies, Trump has embraced crypto as he announced the launch of a crypto banking platform World Liberty Financial. He has also expressed support for domestic Bitcoin miners saying that if crypto is going to define the future, he wants it to be mined, minted, and made in the US.
Many crypto enthusiasts are also welcoming Kamala Harris’s viewpoint on the topic. Harris said she would encourage innovative technologies like AI and digital assets during a fundraiser at Cipriani Wall Street. Commenting on this pro-crypto statement, CEO of cryptocurrency exchange Uniswap Hayden Adams, posted on X: “I believe this is her first time referencing crypto publicly and it’s in a positive way.”
Simultaneously, venture capitalist Ben Horowitz has decided to make a significant donation to Harris’s campaign. This move was a reversal from the previous when he and his business partner Marc Andreessen initially backed President Trump. In an internal letter reported by CNBC, Horowitz says that he has spoken to Harris regarding tech policies and believes that although Harris hasn’t revealed her intentions yet, he is hopeful about her administration being much better than the Biden administration which has been destructive to tech policy, especially crypto and AI.
Our Methodology:
In order to compile a list of the 7 most profitable cryptocurrency stocks to invest in, we created an initial list of 30 companies with the biggest market caps in the sector. Moving on, we shortlisted those that had a positive net income in the trailing twelve months. Finally, we ranked the shortlisted companies in ascending order of their trailing 12 months net income. The number of hedge fund holders has also been mentioned for each stock on the list.
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).
People using the Cash App paying for goods and services, highlighting the impact the of the company’s payment tools.
Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 59
TTM Net Income: $680.77 Million
Block, Inc. (NYSE:SQ) is a technology company that focuses on financial services and helps expand access to the economy. Block comprises Square, Cash App, Spiral, TIDAL, and TBD. Square offers an integrated ecosystem of commerce solutions, business software, and banking services for sellers to grow their business while Cash App allows sending, spending, or investing money in stocks or bitcoin. Spiral advances the use of Bitcoin by building and funding free, open-source projects whereas TIDAL is a platform for musicians and their fans. TBD eases access to Bitcoin and other blockchain technologies.
Block, Inc.’s (NYSE:SQ) growth remains at scale with rising profitability. The core businesses are robust with adjusted operating income margins growing significantly for both Square and Cash App. The firm has also expanded its addressable market over time. With Square representing a nearly $130 billion gross profit opportunity and Cash App representing a nearly $75 billion gross profit opportunity in the US, the market potential is strong.
The strong profitable growth across Block depicts that its ecosystems are efficiently delivering differentiated value to its customers. The firm has also shifted to a functional organizational structure to improve collaboration across ecosystems. Previously, Block acquired Afterpay to strengthen sales across Square and Cash App. While Afterpay has inculcated a high-performing sales culture into parts of Block’s business, the firm wants to extend this across the company.
In the fiscal second quarter, the firm’s gross profit grew 20% year-over-year to $2.23 billion. Square had a gross profit of $923 million, up 15% and Cash App had a gross profit of $1.30 billion, up 23%, year-over-year. Block witnessed improvement across all profitability measures including adjusted EBITDA which climbed 98% year-over-year.
Block, Inc. (NYSE:SQ) is a promising cryptocurrency stock that has demonstrated growing profitability and strength across the business. The stock has 59 hedge fund holders, as of Q2 2024.
Overall, SQ ranks 2nd on our list of most profitable cryptocurrency stocks to invest in. While we acknowledge the potential of SQ 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 SQ 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.