We recently published a list of 12 Crypto Stocks with the Biggest Upside Potential. In this article, we are going to take a look at where IREN Limited (NASDAQ:IREN) stands against other crypto stocks with the biggest upside potential.

Bitcoin Continues Its All-Time Highs

On December 16, Bitcoin reached another all-time high, soaring above $107,000 as investors anticipate an interest rate cut by the Federal Reserve later in the week. The two-day policy meeting will conclude on December 18, and investors are anticipating the Fed to lower interest rates. According to the CME FedWatch Tool forecast, there is a 96% chance of a 25-basis-point cut. This is expected to materialize as a positive trend for Bitcoin. Since Bitcoin often trades like a tech stock, it has the ground to seek benefit from lower interest rates.

In addition, lower interest rates imply a growing money supply and a weakening dollar. Both of these happenings have exhibited long-term correlations with Bitcoin. According to CNBC, Bitcoin has rallied 52% since the US presidential election and 149% for 2024. Trump’s upcoming administration is expected to have a friendly regulatory environment and potentially establish a national strategic Bitcoin reserve. This has been a powerful catalyst for Bitcoin and cryptocurrencies at large.

Bitcoin ETFs Surpass Satoshi Nakamoto’s Holdings

One of the biggest volume drivers among institutions this year has been the Bitcoin ETFs that launched in January 2024, closing out the year with a collective market cap of more than $100 billion. On December 17, Todd Ruoff of Autonomys appeared on CNBC to discuss the performance of these Bitcoin ETFs in 2024 and their potential outlook in 2025. Ruoff was of the view that the adoption trends the industry saw on the institutional level were remarkable. These trends were amplified by the supply side being reduced with Bitcoin’s halving. This, by far, exceeded expectations. Analogies are being made to gold, which it has by far surpassed. The expectation is that the acceleration is expected to continue into 2025.

The collective Bitcoin holdings for ETF issuers in the States recently surpassed Satoshi Nakamoto’s supposed holdings. US spot Bitcoin ETFs are now collectively the largest holders of Bitcoin, reflecting the idea that institutions are taking over Bitcoin. According to CNBC, the 12 spot Bitcoin ETFs in existence drove one of the most successful ETF launches in history after their January launch, collectively passing $100 billion in assets under management. These funds now hold slightly more than 1.1 million Bitcoin, which translates to nearly 5% of all the Bitcoin in existence. This number exceeds the supposed holdings of the legendary pseudonymous founder Satoshi Nakamoto, who is believed to hold as much as 1.1 million Bitcoin.

Ruoff said that Satoshi Nakamoto’s wallets have always been considered the Fort Knox of the Bitcoin industry. To see the ETFs collectively surpassing this level has been an astounding trend in the industry. Ruoff was of the view that the industry has so far benefitted from some big-name recognition, with key industry players bringing trust and credibility to the crypto world. However, with the anticipated seat change in the SEC and the expected regulatory softening, Ruoff does not believe that the regulators are ready to lay down and let anything happen in crypto. There is still considerable work that needs to be undertaken in the industry.

What is 2025 Going to Look Like for Crypto?

Looking at the 2025 outlook, Ruoff said that the large players in the crypto industry bring a great reputation to the space, giving people a perception of legitimacy and competent management for investors. In his opinion, this is going to attract the majority of investment. Smaller players are going to have difficulty competing due to various factors, such as not being able to compete with the inflows. As the market becomes overcrowded and saturated, the circumstances could lead to a consolidation. Some of the smaller underperforming ETFs will likely continue struggling to gain market share, eventually being left with no other option but to merge with another institution.

Ruoff also believed that Bitcoin had nothing to worry about in 2025. He said that while regulation might be the biggest roadblock to crypto as a currency in 2025, the industry is on the way to overcoming it with a crypto-friendly administration coming in.

Our Methodology

We first utilized stock screeners, ETFs, and online rankings to make an extended list of 30 crypto companies. We then shortlisted the top 12 stocks from our list with the highest analyst upside potential, as of December 17. The 12 crypto stocks with the biggest upside potential are arranged in ascending order of their upside potential.

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).

IREN Limited (NASDAQ:IREN)

Analyst Upside: 22.21%

Formerly known as Iris Energy Limited, IREN Limited (NASDAQ:IREN) is an Australia-based company that owns and operates renewable energy-powered data centers. Its facilities are specially optimized for AI cloud services, Bitcoin mining, and other power-dense computing.

The company is positioned as a low-cost commodity producer in the industry, producing Bitcoin at a low cash cost of around $29,000 per Bitcoin. According to its fiscal Q1 2025 earnings, IREN Limited (NASDAQ:IREN)  is accelerating its expansion to 50 exahashes in the first half of next year ahead of schedule. This positions it as one of the largest listed miners in the industry.

It also has a strong balance sheet with significant cash reserves and no debt, allowing for future growth. The company is exploring alternative funding instruments for its operations, such as convertibles, to support its growth plans and potentially reduce reliance on equity financing. However, the increasing institutional interest and competition in the Bitcoin mining sector may impact IREN Limited’s (NASDAQ:IREN) profitability. The company also faces risks associated with procuring long lead items and supply chain disruptions, which may delay its expansion projects. It ranks eighth on our list of the top crypto stocks with the biggest upside potential.

Overall, IREN ranks 8th on our list of crypto stocks with the biggest upside potential. While we acknowledge the potential of crypto stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than IREN 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.