In this article, we will take a look at the 11 crypto stocks with biggest upside. To see more such companies, go directly to 5 Crypto Stocks with Biggest Upside.
Cryptocurrencies soared last month after a three-judge appeals panel in Washington vacated a decision by the U.S. Securities and Exchange Commission that blocked Grayscale’s attempt to convert Grayscale Bitcoin Trust into an Bitcoin (BTC-USD) exchange-traded fund. Several cryptocurrencies rallied strongly after this decision, including Bitcoin, Ethereum, Dogecoin and Binance Coin. Analysts see this decision as a critical milestone for the industry. Another win for the crypto industry came last month when a US judge ruled that Ripple Labs Inc did not violate federal securities law by selling its XRP token on public exchanges.
However, many analysts believe the crypto industry is facing the same concentration of value problem that is seen in the stock markets: just a few cryptocurrencies account for most of the gains in the industry and the industry is littered with meme coins and coins that have no solid underlying projects. As a result analysts and experts keep cautioning investors, which creates skepticism and volatility in the industry.
But what are the reasons behind the skepticism? Did the industry lose hope on the future of money and how digital currencies promise to change it with decentralization? Has the fundamental thesis that once made cryptocurrencies the darlings of the global markets shifted? Many mainstream analysts now believe cryptocurrencies have now gone in the background when compared to other truly disruptive technologies like AI and Cloud computing. For example, a Refinitiv report said that of the many technologies that changed our lives over the past few years, AI is the most disruptive. Other disruptive technologies include high-speed internet, Cloud computing and blockchain. But surprisingly, according to the report, analysts are not excited about crypto.
“This stands in stark contrast to cryptocurrencies, where institutional traders of all ages remain largely unexcited despite the efforts of many to make these markets more accessible.”
So that means the whole crypto chapter was a façade and cryptocurrencies do not promise any good for the world? A report by Oliver Wyman Forum on the crypto outlook for 2023 and beyond answers this question in detail. It says:
“The short answer is no – and that’s a good thing. Many parts of the sector show real promise for useful innovations to provide more efficient and effective financial products and services for businesses and consumers. The calamities of the past year revealed major flaws in the business models and practices of many crypto ventures, notably in the exchange and lending spaces, but they did not reflect fundamental weaknesses in the industry’s underlying technology or its ability to transform many areas of financial services. The challenge ahead – for digital asset businesses, investors, developers, policymakers, and consumers – is to focus on that promise, identify and rectify the flaws, and develop rules of the road (both formal and informal) that offer protections for investors and users while fostering truly valuable innovation.”
Just because the governments around the world initiated a crackdown against crypto and the industry is littered with scams and meme coins does not make the fundamental thesis behind crypto invalid. There are investors and major companies still betting on the future of digital money and they believe sooner or later the world will move to digital currencies, DeFi and related technologies.
Last month, JPMorgan said in a report that it sees “limited downside” to the crypto markets in the near term. The bank said in a report that the reversal of crypto rally seen after the Ripple Vs SEC court decision could be because of a “broader correction in risk assets such as equities and in particular tech, which in turn appears to have been induced by frothy positioning in tech, higher U.S. real yields and growth concerns about China.”
The Oliver Wyman report said that despite the problems, innovation continues to take place in the crypto industry. The report cited data according to which last year, during the peak of the crypto winter, the industry saw a rise in crypto developers. It also quoted data from Celent which says that 91% of institutional investors are “interested” in investing in tokenized assets.
The report however warned that the speculative element in the industry will remain strong. It however advised investors to focus on crypto projects with solid underlying assets and technologies. The report said that the industry has taken the form of an ecosystem, strongly interconnected, causing regulators and outsiders to see it as a whole. The report said this is not the right approach:
“Second, and more important, the world’s tendency to lump everything in digital assets together as crypto creates substantial indirect impacts. Policymakers are likely to accelerate the movement to bring digital assets clearly within the regulatory perimeter, and to do so by applying tougher regulatory standards than they would have prior to the recent debacles. Some of this policy action will fail to adequately distinguish between different parts of the digital assets ecosystem. Similarly, funding for digital assets projects of all kinds is likely to be tougher to find going forward than it was when crypto was spinning gold for investors.”
Best Crypto Stocks with Upside
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Our Methodology
For this article, we conducted a survey of mainstream financial media and consulted at least 12 finance websites to see which cryptocurrency-related stocks have the biggest upside according to these websites. We picked 11 stocks that appeared most frequently on these websites. Some notable stocks include Paypal Holdings Inc. (NASDAQ:PYPL), NVIDIA Corporation (NASDAQ:NVDA) and Block, Inc. (NYSE:SQ).
Crypto Stocks with Biggest Upside According to Mainstream Financial Media
Canadian-based crypto mining firm Aerohive Networks Inc. (NYSE:HIVE) ranks 11th in our list of the best crypto stocks with upside potential according to financial media. Aerohive Networks Inc. (NYSE:HIVE) produced 274 bitcoins in August.
Chinese firm Canaan Inc. (NASDAQ:CAN) is known for its Blockchain servers and ASIC microprocessors for use in bitcoin mining.
As of the end of the second quarter of 2023, 4 hedge funds reported owning stakes in Canaan Inc. (NASDAQ:CAN).
Canaan Inc. (NASDAQ:CAN)’s management talked about the challenges the company is facing and the expected obstacles in a latest earnings call and said:
“We believe that the broader market lacks sufficient upward momentum. In addition, large scale miners financing capabilities remain constrained. The recent hash rate growth curve also indicates a notable decline in the overall industry’s incremental hash rate investment and deployment during the first three quarters of this year. This trend aligns with our market assessment. Furthermore, policy changes concerning crypto-currencies and mining in various countries introduced further uncertainty to both the industry and our operations. In some cases, these changes could present unforeseen challenged to our actual operations. Given all the factors I have just outlined, we have a highly cautious outlook for the third quarter of 2023. We expect that revenues from the — for the quarter will be approximately $30 million.
Earlier this year crypto mining company Hut 8 Mining Corp. (NASDAQ:HUT) announced that it will combine with U.S. Data Mining Group, Inc. in an all-stock merger of equals.
As of the end of the second quarter of 2023, 31 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in Hut 8 Mining Corp. (NASDAQ:HUT). The biggest hedge fund stakeholder of Hut 8 Mining Corp. (NASDAQ:HUT) was Steven Tananbaum’s GoldenTree Asset Management which owns a $2.2 million stake in the company.
Like HUT, hedge funds also like Paypal Holdings Inc. (NASDAQ:PYPL), NVIDIA Corporation (NASDAQ:NVDA) and Block, Inc. (NYSE:SQ).
Riot Platforms, Inc. (NASDAQ:RIOT) shares have been on an absolute tear this year as the stock has almost doubled year to date through September 11.
As of the end of the second quarter of 2023, 18 hedge funds tracked by Insider Monkey had stakes in Riot Platforms, Inc. (NASDAQ:RIOT). The biggest stakeholder of Riot Platforms, Inc. (NASDAQ:RIOT) was Paul Marshall and Ian Wace’s Marshall Wace LLP which had an $18 million stake in the company.
Coinbase Global, Inc. (NASDAQ:COIN) ranks 6th in our list of the crypto stocks with high upside potential according to mainstream financial media. Last month, Coinbase announced it would buy an equity stake in Circle, the issuer of dollar-pegged USD Coin (USDC-USD).
Insider Monkey’s database of 910 hedge funds shows that 27 hedge funds out of the 910 hedge funds reported owning stakes in Coinbase Global, Inc. (NASDAQ:COIN). The most significant stakeholder of Coinbase Global, Inc. (NASDAQ:COIN) was Catherine D. Wood’s ARK Investment Management which owns an $867 million stake in the company.
Like Coinbase Global, Inc. (NASDAQ:COIN), Paypal Holdings Inc. (NASDAQ:PYPL), NVIDIA Corporation (NASDAQ:NVDA) and Block, Inc. (NYSE:SQ) are some crypto stocks analysts believe will rise in the future.
