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The pool of cryptocurrency stocks to buy isn't especially large (yet), but it does offer investors a more conventional way of gaining exposure to this explosive asset class.
The flagship for now, of course, is Coinbase Global Inc. (NASDAQ: COIN), the first bona fide initial public offering (IPO) of a cryptocurrency-based company in the U.S. markets. A wave of crypto IPOs will likely follow over the next several years.
Until then, there's no lack of cryptocurrency stocks to buy, although most of the companies are relatively small and the space is still very risky.
Another caveat: Cryptocurrency prices usually have a direct impact on these stocks, which means most are unusually volatile as well.
Still, the crypto stocks available today, modest as they are, represent a vast improvement over the poor choices investors had a few years ago. Most were penny stocks with poor business models. Today those early crypto stocks have lost nearly all their value or are out of business.
Fortunately, the world of crypto has matured a great deal since then. Most of the current batch of cryptocurrency stocks have genuine potential, although the pickings will get markedly better after we have a few more major crypto IPOs.
This list is an overview of the cryptocurrency stocks you can buy now along with a brief summary of the company and any red flags we see.
Cryptocurrency Stocks to Buy Now
These stocks trade on major exchanges. Here we excluded any company with a market cap of under $500 million.
This list also does not include companies that simply own crypto but don't operate businesses primarily focused on cryptocurrencies or blockchain technology such as Tesla Inc. (NASDAQ: TSLA) and MicroStrategy Inc. (NASDAQ: MSTR).
- Coinbase Global Inc. (NASDAQ: COIN)
Market cap: $63 billion
Coinbase is the most popular U.S. cryptocurrency exchange. It went public via a direct listing April 14. Coinbase makes money by charging its customers fees. As an ideal on-ramp for new and inexperienced crypto investors, Coinbase is likely to reward investors well over the next few years. The stock overshot at its debut, briefly trading over $400, but has since slipped below its reference price of $250. Anything below that level is a pretty good entry point.
- Silvergate Capital Corp. (NYSE: SI)
Market cap: $3 billion
Silvergate is a bank that saw the opportunity in crypto way back in 2013. That's when it shifted away from traditional banking so it could focus on cryptocurrency-related services. That's given Silvergate a huge first-mover advantage in the crypto banking space. It's also perfectly positioned to benefit from the larger migration of financial services into blockchain-based solutions. At about $112, SI stock is trading well below its 52-week high $187.86 - making now a good time to buy.
- Riot Blockchain Inc. (NASDAQ: RIOT)
Market cap: $2.88 billion
Like many of the stocks in this list, Riot mines cryptocurrency, mainly Bitcoin. Riot has about 23,000 "Antminer" rigs right now with plans to ramp up to 70,000 by the end of 2022. All that power will mean more Bitcoins mined, but the massive capex spending tends to void profits. RIOT peaked at just under $78 in February but has plunged to about $30 since. If the Bitcoin rally resumes, however, RIOT shares will jump higher.
- Marathon Digital Holdings Inc. (NASDAQ: MARA)
Market cap: $2.5 billion
Marathon is a cryptocurrency miner with a focus on Bitcoin. Despite the huge rise in the price of Bitcoin, MARA still managed to lose $0.20 a share in the first quarter of the year - worse than the $0.12 loss in the same quarter in 2020. In its defense, Marathon has spent heavily on buying mining equipment ($170 million on 70,000 mining rigs in December alone). The company is expected to post a profit of $0.29 in the current quarter.
- Canaan Inc. (NASDAQ: CAN)
Market cap: $1.72 billion
Canaan is a China-based maker of crypto mining equipment called ASICS (application-specific integrated circuit). Miners need to relentlessly buy newer, more powerful versions of these machines in order to keep up with the steadily rising difficulty of mining Bitcoin. This is the "pick and shovel" business of Bitcoin mining. Canaan struggled to meet demand last year, but that appears to be fixed. Revenue in the first quarter was $61.5 million - not much less than the $68.6 million the firm earned in all of 2020. It also turned a profit of $200,000 versus losing money last year. As a China-based cryptocurrency stock, CAN warrants caution. But if company guidance can be trusted, 2021 will be a strong year.
- SOS Ltd. (NYSE: SOS)
Market cap: $648 million
SOS is a Chinese cryptocurrency mining company. It mines both Bitcoin and Ethereum. But despite the prestigious NYSE listing (as an American depository receipt), this is a troubled company. On Feb. 26, two short-seller research companies, Culper Research and Hindenburg Research, questioned whether SOS is even a legitimate crypto business. The firms said they suspected SOS doesn't own the mining rigs it claimed. The reports inspired a class action lawsuit and took a big bite out of the share price, which has tumbled further since. Whatever the real story is - and with Chinese companies it's always hard to say - investors have better choices than SOS.
- Ebang International Holdings Inc. (NASDAQ: EBON)
Market cap: $617 million
This China-based company sells mining equipment and in April set up a crypto exchange. But like SOS, it has been under fire. Hindenburg published a damning report on Ebang on April 6 in which it alleged the company had misused funds and that its crypto businesses are virtually nonexistent. As with SOS, the report slammed EBON stock and spurred a class action lawsuit. This is another sketchy Chinese crypto stock you'll want to avoid.
These stocks trade on the OTC markets. We were tougher on screening this group since they're not as closely regulated and don't have the "stamp of approval" of a major exchange:
- Grayscale Bitcoin Trust (OTC: GBTC)
Market cap: $5.5 billion
The Grayscale Bitcoin Trust is not a company but a Bitcoin hedge fund launched in 2013. Grayscale holds Bitcoin to back the shares. At first, only accredited investors could buy shares, but after a 12-month period, those early investors could sell shares to anyone on the OTC market. Thus Grayscale used a loophole to create a Bitcoin exchange-traded fund (ETF) in all but name. GBTC once traded at a steep premium to the Bitcoin price, but that shifted in March. It now trades at a discount. Available through most brokerages, it's the easiest way to own Bitcoin without actually buying it. Other crypto OTC funds from Grayscale include the Grayscale Ethereum Trust (OTC: ETHE) and the Grayscale Litecoin Trust (OTC: LTCN). Grayscale plans to convert them to conventional ETFs when the SEC starts approving crypto ETFs.
- Voyager Digital Ltd. (OTC: VYGVF)
Market cap: $2.8 billion
Voyager is a crypto brokerage that allows both retail and institutional customers to buy and sell across multiple exchanges. It also offers high interest rates (up to 9%) on the crypto users keep in its smartphone app. Voyager was founded by Silicon Valley and Wall Street veterans who saw how crypto tech could upend the financial world. And business is booming. Revenue in the most recent quarter was $60.4 million - a 16-fold increase over the same quarter a year ago. The company reported an operating profit of $30 million, its first ever. The stock is down about 60% since peaking in early April, but this firm has an aggressive game plan and a lot of potential. Definitely worth a look.
- Galaxy Digital Holdings Ltd. (OTC: BRPHF)
Market cap: $1.7 billion
Galaxy is a crypto asset management firm that also operates trading, banking, and mining lines of business. Founder and CEO Mike Novogratz is the very public face of the company and is a well-known advocate for crypto in the financial world. In May, Galaxy made what will be the first $1 billion in the crypto industry with its deal to acquire lending, trading, and portfolio management firm BitGo. As it grows, Galaxy has a good chance of emerging as a top crypto financial services company. The stock is down nearly 50% from its April highs, but the price/earnings ratio is under 7, and the firm is debt-free. This stock could easily double over the next 12 months.
- HIVE Blockchain Technologies Ltd. (OTC: HVBTF)
Market cap: $984 million
HIVE mines cryptocurrencies. It was formed from a reverse merger with Leeta Gold Corp. in 2017. Major investors in HIVE include Frank Holmes' U.S. Global Investors and Genesis Mining Ltd. The company mines both Ethereum and Bitcoin. All of its mining operations are powered by green energy, which is a big advantage as that issue gets more attention. Rising crypto prices helped boost earnings by a factor of five from 2019 to 2020. The stock is down more than 50% since spiking to $7 in February. But this company is profitable and growing, which means it's trading at a discount.
- Argo Blockchain Plc. (OTC: ARBKF)
Market cap: $800 million
Argo is crypto miner focused on Bitcoin and Zcash. Although headquartered in London, Argo's mining operations are based in North America. Like other miners, Argo has experienced rapid growth over the past year. While company operations are doing well, the share price looks to have outrun the firm's value. Recent estimates of expected earnings put Argo's P/E at over 200. This company has decent prospects, but it's so overvalued right now investors should look elsewhere.
What the heck - let's do a baker's dozen with a stock that (for now) defies categorization:
- Exodus Movement Inc. (EXIT)
Market cap: $75 million/$710 million implied enterprise value
Exodus is a popular crypto wallet company that offers Defi-like "swaps" between different cryptos within the wallet. It has more than 600,000 active users. While Exodus has a much smaller market cap than the other companies on this list, it is going public in a way that offers a glimpse into the future of equity offerings. It raised $75 million by selling 2.73 million Class A shares at a price of $27.42 through its wallet in accordance with the SEC's Regulation A. The company expects the shares to start trading on the secondary market within a couple of months. Exodus projects 5x growth in revenue in 2021 over last year. Investors should keep an eye on this stock to see how its novel approach plays out.
Forget Bitcoin: This Alternative Currency Has Tripled in Value This Year
Crypto investors are actively looking for a backup plan now that Bitcoin is down.
But our in-house crypto connoisseur, Michael Robinson, has been hiding this ace up his sleeve long before Bitcoin's plunge.
It's the same story tied to the three coins that shot up 800%+ in less than a quarter.
And the same coins could 7X, 10X, even 20X your money before the end of the year.
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.