Insider Monkey
12 Best Cryptocurrency Stocks To Buy According to Hedge Funds
Ramish Cheema
8 min read

In This Article:

In this piece, we will take a look at the 12 best cryptocurrency stocks to buy according to hedge funds. If you want to skip our overview of the explosive cryptocurrency sector that continues to surprise, then you can skip ahead to 5 Best Cryptocurrency Stocks To Buy According To Hedge Funds.

2023 has been the year of artificial intelligence. It started with doom and gloom all around as investors were reeling from high interest rates and predictions of a recession. This environment does not bode well for high growth areas such as cryptocurrency, and naturally, these stocks were poor performers. In fact, 2022 was a bloodbath for the cryptocurrency industry and stocks, as high interest rates incentivized capital to flow into stable savings accounts and the money market, which left cryptocurrency in the dust.

For instance, the price of Bitcoin which is the world's premier cryptocurrency and a widely known benchmark for the sector, tanked to below $16,500 in November 2022. This time period was one of the worst for growth assets, as back then the Federal Reserve was pumping up interest rates by massive 75 point hikes a piece. At the same time, just as crypto was struggling to find its footing, calamity hit the cryptocurrency sector as cryptocurrency exchange FTX declared bankruptcy. While declaring bankruptcy itself is not particularly controversial as several firms go through the process, FTX's liquidation was far from ordinary.

This is because at the heart of the FTX saga was the question of legitimacy that cryptocurrency critics have continued to worry about. Since Bitcoin or other cryptocurrencies are not backed by any assets, their value is thought to be purely speculative and determined by market sentiment alone. In the case of FTX, it was revealed that the firm funneled customer deposits into speculative investments - including its own token - and when these investments crashed, it lost customer money. A fraud of epic proportions, it saw FTX's founder Sam Bankman-Fried face trial for exactly a year before being convicted on all seven counts that prosecutors had brought against him.

However, while FTX is a thing of the past, Bitcoin surely isn't. After dropping to multi-year lows in 2022, the world's favorite cryptocurrency is basking in the evolving financial markets environment of 2023. Year to date, Bitcoin has gained a respectable 151% on the market, and its current price of ~$42,000 is the highest level at which it has been in 2023. There are several reasons behind this surge. One of these is the expected easing in financial conditions that has also fueled the flagship S&P 500 stock index and the NASDAQ indexes in November. Lower interest rates naturally fuel riskier assets as investors want alternative avenues for a return, and Bitcoin is perhaps the riskiest of all assets.

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