12 Best Cryptocurrency Stocks To Buy According to Hedge Funds
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.
Apart from the financial conditions, the nature of Bitcoin's price is also at play these days, Since, unlike say for shares of the Cupertino, California technology giant Apple Inc. (NASDAQ:AAPL) reflect Apple's financial heft and future market potential, Bitcoin's price is a reflection of market sentiment, it appreciates when investors are optimistic. These indicators of optimism primarily revolve around the growing adoption and removal of regulatory constraints surrounding Bitcoin. Now, one of the biggest tailwinds for Bitcoin's price is a potential approval of an exchange traded fund (ETF) that would improve investor access to the cryptocurrency by allowing stock market participants to also trade in Bitcoin. The potential for this fund is no laughing matter since estimates show that should such a fund be approved by the S.E.C., then a whopping $3 billion could flow into it on the first day and up to $55 billion over the next five years. If you're interested in taking a look at Bitcoin specific stocks, then you should check out our coverage of the 10 Best Bitcoin and Blockchain Stocks To Buy Now.
So, as crypto appears to be taking off once again, we decided to take a look at the best cryptocurrency stocks to buy. The top three picks in this list are Riot Platforms, Inc. (NASDAQ:RIOT), Argo Blockchain plc (NASDAQ:ARBK), and Marathon Digital Holdings, Inc. (NASDAQ:MARA).
Bitcoins
Our Methodology
To compile our list of the best cryptocurrency stocks to buy, we first made a list of the biggest cryptocurrency companies according to their market capitalization. Then, we ranked the companies by the number of hedge funds that had bought their shares in Q3 2023, and the top cryptocurrency stocks are as follows.
12 Best Cryptocurrency Stocks To Buy According to Hedge Funds
12. Canaan Inc. (NASDAQ:CAN)
Number of Hedge Fund Investors In Q3 2023: 3
Canaan Inc. (NASDAQ:CAN) is a Singaporean company that provides computers that are used to mine Bitcoin. A tumbling cryptocurrency industry hasn't done the company any favors as it has missed analyst EPS estimates in all four of its latest quarters.
During Q3 2023, three out of the 910 hedge funds part of Insider Monkey's database had bought a stake in Canaan Inc. (NASDAQ:CAN). Douglas Harold Hart Polunin's Polunin Capital owned the largest stake among these which was worth $2.5 million.
Along with Argo Blockchain plc (NASDAQ:ARBK), Riot Platforms, Inc. (NASDAQ:RIOT), and Marathon Digital Holdings, Inc. (NASDAQ:MARA), Canaan Inc. (NASDAQ:CAN) is a top cryptocurrency stock to buy according to hedge funds.
11. Hut 8 Mining Corp. (NASDAQ:HUT)
Number of Hedge Fund Investors In Q3 2023: 3
Hut 8 Mining Corp. (NASDAQ:HUT) is a Canadian cryptocurrency mining platform provider that enables users to mine their currency for a fee. December is an important month for the company, as it has announced a successful merger with a U.S. Bitcoin data center company.
By the end of this year's third quarter, three out of the 910 hedge funds polled by Insider Monkey were the firm's investors. Hut 8 Mining Corp. (NASDAQ:HUT)'s biggest hedge fund investor is Ken Griffin's Citadel Investment Group due to its $4.7 million stake.
10. Bit Digital, Inc. (NASDAQ:BTBT)
Number of Hedge Fund Investors In Q3 2023: 4
Bit Digital, Inc. (NASDAQ:BTBT) is an American Bitcoin and cryptocurrency mining firm based in New York City. Like other firms, it is also targeting the emerging A.I. industry as it announced in November 2023 that it has secured the first customer for its A.I. computation outsourcing business.
Insider Monkey scoured through 910 hedge fund portfolios for their September quarter of 2023 shareholdings and found that four had held a stake in Bit Digital, Inc. (NASDAQ:BTBT). The firm's largest shareholder is John Overdeck and David Siegel's Two Sigma Advisors as it owns $146,162 worth of shares.
9. HIVE Digital Technologies Ltd. (NASDAQ:HIVE)
Number of Hedge Fund Investors In Q3 2023: 5
HIVE Digital Technologies Ltd. (NASDAQ:HIVE) mines cryptocurrencies and operates data centers. It has operations in North America and Europe. It is taking advantage of rising Bitcoin prices these days by buying close to ten thousand Bitcoin miners in November and December 2023.
During 2023's September quarter, five out of the 910 hedge funds tracked by Insider Monkey were HIVE Digital Technologies Ltd. (NASDAQ:HIVE)'s shareholders.
8. Bitfarms Ltd. (NASDAQ:BITF)
Number of Hedge Fund Investors In Q3 2023: 5
Bitfarms Ltd. (NASDAQ:BITF) is a Canadian server farm and electrical services provider headquartered in Toronto, Canada. November was a good month for the firm as it completed a C$60 million capital raise from private investors.
By the end of this year's third quarter, five out of the 910 hedge funds part of Insider Monkey's database had bought the firm's shares. Bitfarms Ltd. (NASDAQ:BITF)'s biggest investor among these is Israel Englander's Millennium Management courtesy of its $2 million investment.
7. TeraWulf Inc. (NASDAQ:WULF)
Number of Hedge Fund Investors In Q3 2023: 7
TeraWulf Inc. (NASDAQ:WULF) is a small Bitcoin miner with facilities in New York and Pennsylvania. Even though it has missed analyst EPS estimates in all four of its latest quarters, TeraWulf Inc. (NASDAQ:WULF) is still the first stock on our list that is rated Strong Buy on average with analysts having set an average share price target of $3.90
Insider Monkey scoured through 910 hedge fund portfolios for 2023's September quarter and found that seven had bought and owned TeraWulf Inc. (NASDAQ:WULF)'s shares.
6. Iris Energy Limited (NASDAQ:IREN)
Number of Hedge Fund Investors In Q3 2023: 8
Iris Energy Limited (NASDAQ:IREN) is an Australian Bitcoin mining company headquartered in Sydney, Australia. It's another highly rated stock, with an average share rating of Strong Buy that factors in a November 2023 upgrade to Outperform from Neutral.
Eight out of the 910 hedge funds profiled by Insider Monkey during Q3 2023 were the firm's investors. Kerr Neilson's Platinum Asset Management was Iris Energy Limited (NASDAQ:IREN)'s largest shareholder as it owned 2.6 million shares that are worth $9.6 million.
Riot Platforms, Inc. (NASDAQ:RIOT), Argo Blockchain plc (NASDAQ:ARBK), Iris Energy Limited (NASDAQ:IREN), and Marathon Digital Holdings, Inc. (NASDAQ:MARA) are some best cryptocurrency stocks that hedge funds are piling into.
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Disclosure: None. 12 Best Cryptocurrency Stocks To Buy According to Hedge Funds is originally published on Insider Monkey.