Ride the crypto boom with these 3 stocks
About 15% of the American population owns some form of cryptocurrency, and a significant portion of this group has joined this group in the past two years. Digital currencies – Bitcoin is the most well-known, but there are many others – offer users a specific set of benefits based on their blockchain technology. First, cryptocurrencies are safe – as a digital blockchain technology, it is known to be difficult to hack. Second, coins have a major attribute of any store of value: scarcity. For example, there is a mathematical limit on how many bitcoins will ever exist, and that limit gives them their value. People want a secure online currency, they are willing to pay for it, and relatively rare (compared to traditional fiat currencies) cryptocurrencies offer both attributes. The result has been a boom in recent years as investors have begun to look seriously at the crypto sector. Of course, a number of services are required to use any digital currency. Financial companies that support this, and payment servers that process transactions, to name just two. Other companies and big commercial figures – Elon Musk immediately comes to mind – will invest heavily in it. All of this creates an environment in which investors can profit from cryptocurrency without even buying a real coin. They can buy from companies that are ready for a cryptocurrency boom in order to get higher profits. How big is the cryptocurrency? At the beginning of this month, the market for it surpassed $ 2 trillion, and this figure is difficult to imagine. So, as usual, we turned to the TipRanks platform to help us sort out the capital situation in relation to cryptocurrency. We found three stocks – from different sectors – that some leading Street analysts believe are poised to generate cryptocurrency profits. Let’s go deeper into the matter. Silvergate Capital (SI) We’ll start with the financial world, which is appropriate when we discuss a new financial asset like cryptocurrency. Silvergate Capital is a California-based commercial bank that provides financial services and infrastructure to clients in the digital currency industry. Silvergate has been in the financial industry for over 3 decades and has been profitable annually for the past 21 years. Silvergate went digital in 2013, actively pursuing digital currency customers. Today the company has over 1,100 clients in this sector. In March of this year, Silvergate expanded its digital currency services, using a custodian service to hold bitcoins as collateral for commercial loans in US dollars. The service offers large bitcoin holders a way to access liquid capital without selling the underlying cryptocurrency. Silvergate provides Bitcoin collateral custody through Coinbase and Fidelity Digital Assets. In its recent 1Q21 financials, Silvergate reported earnings per share of 55 cents per share, up 14% or more than the industry, up 139% year-over-year. Maintaining its profit growth, Silvergate recorded a 29% growth in its customer base over the previous year. Digital currency deposits rose from $ 5 billion at the end of December to $ 6.8 billion at the end of March. The company’s rapid growth can also be seen in its share price, which has risen by an astounding 582% over the past 12 months. 5-star analyst Joseph Wafi of Canaccord Genuity is impressed with Silvergate’s growth in digital currency banking and writes: “Silvergate ended again in the first quarter, as indicated by another sequential increase in deposits of nearly 40% above 130 +% qoq. q growth in the 4th quarter. This impressive growth in deposits was driven by an equally strong growth in demand for the Silvergate Exchange Network (SEN) as institutional interest in bitcoin continues to grow. Equally important are the implications of two strategic deals signed in the first quarter with Fidelity and Coinbase. In our opinion, it is becoming clear that it is not only becoming a key link in financial services in all institutional cryptocurrency trading, but now SI is becoming a key partner for cryptocurrency custodians seeking to offer margin lending. It is important to note that Silvergate has a major competitive cost advantage in crypto-margin lending given its core bank charter, which provides a very low cost of capital by attracting zero-interest customer deposits. ” Wafi, one of the Wall Streets Top 100 Analysts, is buying SI stock, and his $ 150 target suggests the stock has room to rise 36% this year. (To view Wafi’s track record, click here.) Wafi Kanakkorda is no exception in his optimistic views. Silvergate has 5 recent reviews and these include 4 purchases versus 1 hold for the Strong Buy consensus rating. The share price is $ 107.22, and the average target price of $ 158 implies upside potential of 45% – even more optimistic than Vafi allows – in the coming year. (See TipRanks’ Silvergate Stock Analysis.) PayPal Holdings, Inc. (PYPL) While Silvergate is hardly a household name, PayPal is. The company is a market leader in online payment processing, a fast-growing industry in its own right, with revenues growing from $ 17.7 billion in 2019 to $ 21.4 billion in 2020. The company recorded consistent revenue growth in the second, third and fourth quarters of this year. last year, and in the fourth quarter, earnings per share reached $ 1, up from 43 cents in the first quarter of last year. Unsurprisingly, PayPal’s rise came during the pandemic. We all know that e-commerce has boomed in the past year, benefiting from social exclusion policies, and e-commerce requires online payment processors. PayPal leads the industry with over 377 million active accounts and 4.4 billion payment transactions totaling $ 277 billion. In April, PayPal announced that its Venmo mobile payment app offers users the ability to buy, sell, and store four cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. According to one study, around 30% of Venmo users are already dealing with cryptocurrency; this move makes their transactions more convenient and opens an easy path to cryptocurrency for Venmo’s entire 70 million user base. BTIG analyst Mark Palmer points to a key factor in Venmo’s new PayPal feature when he writes: “This move marks the first time that consumers will be able to use cryptocurrency to shop at a large number of merchants. The cryptocurrency option is now available in the US from more than half of the 29mm PYPL sellers, and the company says more will be added soon. ” Palmer believes this move towards cryptocurrency will be a net positive for PayPal, and he backs it up with a buy rating and a target price of $ 345, implying 31% annual growth potential. (To view Palmer’s track record, click here.) That Wall Street agrees with Palmer is evident in the Strong Buy consensus rating for the stock, underpinned by newer than 29 recent Buy ratings. They outweigh the 4 deductions that were also installed here. PYPL shares are trading at $ 262.29, and their average target price of $ 310.68 suggests the stock has 18% upside potential this year. (See TipRanks’ PayPal Stock Analysis.) CleanSpark (CLSK) Finally, CleanSpark is a software and clean energy company. This makes more sense than meets the eye – CleanSpark software products are designed to manage microgrids and distributed energy systems. These systems allow users to disconnect from the grid, abandoning traditional power distribution in order to use cleaner sources of green energy. CleanSpark provides software to manage these systems. Earlier this year, CleanSpark took some bold moves that made a splash in its own industry and cryptocurrency. In March, the company placed public shares on the market – more than 9 million common shares – at $ 22 each, raising more than $ 200 million before expenses. This alone received notice from investors. In addition, the company began using the funds to purchase additional bitcoin mining rigs. These are the computer systems through which new bitcoins are generated. They consume huge amounts of energy, generate a lot of heat – and CleanSpark has invested heavily not only in mining rigs that will gradually produce new bitcoins, but also in a clean energy infrastructure to keep Atlanta mining 95%. carbon-free. The company’s latest investment in bitcoin mining will begin to take physical shape later this year. Finally, in April, CleanSpark announced contracts for an additional 22,680 bitcoin miners. When all the new rigs are installed, up and running, CleanSpark plans to increase bitcoin production to over 3.2 EH / s. In the quarter ending March 31, CleanSpark produced 144 bitcoins and has produced a total of 205 bitcoins since mining started in December. At the same time, CleanSpark has not lost sight of its original focus. The company also announced in April that it had secured a $ 16.2 million increase in microgrid contracts, up 220% from a year earlier. Coverage of this promotion for HC Wainwright, Lead Analyst Amit Dayal writes: “We believe the implementation of CleanSpark on the microgrid and bitcoin mining fronts could result in the company surpassing our expectations for FY2021 as our assumptions now appear to be relatively conservative. Shares have declined from January 2021 highs along with some other bitcoin mining companies and the general weakness of small-cap companies. However, we believe that with bitcoin prices staying well above our estimates, no known changes in mining operations and a microgrid backlogs company, the operational side of the matter appears to be unchanged. We believe CleanSpark’s estimate remains strong at current levels as the company expects revenues and profit growth of more than 150% and more than 1000% for fiscal 2022, respectively. ” In line with his upbeat outlook, Dial gives CLSK a Buy rating with a target price of $ 50, indicating confidence in sustained 135% upside potential over the next 12 months. (To view Dayal’s track record, click here.) There are only two recent reviews of this promotion, including Dayal, but both agree: This is one worth buying. CLSK shares are currently trading at $ 21.26 with an average target price of $ 47.50, implying 123% upside this year. (See TipRanks’ CleanSpark Stock Analysis.) To find good ideas for trading stocks at attractive valuation, visit TipRanks’ Best Stocks to Buy, ‘a recently launched tool that brings together all TipRanks stock analytics. Disclaimer: The opinions expressed in this article are solely those of the analysts mentioned. The content is for informational purposes only. Before making any investment, it is very important to do your own analysis.