In this article we will take a look at the 5 best crypto stocks to buy right now amid hedge fund interest. For a detailed analysis of the crypto industry, go directly to These Top Hedge Funds are Buying Coinbase and Other Bitcoin Stocks.
5. PayPal Holdings, Inc. (NASDAQ: PYPL)
Number of hedge fund holders: 147
Paypal Holdings, Inc. (NASDAQ: PYPL) is a Palo Alto-based digital payments firm that operates in several countries around the world. The firm has an online system that facilitates the transfer of money across borders without charging high fees. It was founded in 1998 and is placed fifth on our list of 10 best crypto stocks to buy amid hedge fund interest. The share price of PayPal has jumped in recent months as digital payments increase because of the lockdown restrictions put in place to curb the COVID-19 pandemic.
On March 31, PayPal announced that it would let users checkout with cryptocurrency on its platform. On April 25, PayPal CEO Dan Schulman took a bullish tone crypto in a media interview and said that the advent of super apps would hasten the rise of digital currencies. Last week, PayPal launched crypto trading on mobile payments app Venmo.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in the firm with 12.3 million shares worth more than $2.8 billion.
4. Square, Inc. (NYSE: SQ)
Number of hedge fund holders: 89
Square, Inc. (NYSE: SQ) is a California-based company primarily in the digital payments business. It was founded in 2009 and is ranked fourth on our list of 10 best crypto stocks to buy amid hedge fund interest. Square has a market cap of more than $112 billion and posted more than $9.5 billion in annual revenue in December 2020, up from $4.7 billion the year before. Square has pioneered digital payments products over the past two decades, including bank card readers for mobiles and point of sale devices for retailers.
On April 20, investment advisory Rosenblatt forecast a positive outlook for Square in 2021 after a record 302% share price surge over the past twelve months. The advisory highlighted Square as a top payments industry stock for the year with a 30% upside potential. In October last year, Square had invested close to $50 million in Bitcoin and called it the currency of the future.
At the end of the fourth quarter of 2020, 89 hedge funds in the database of Insider Monkey held stakes worth $8.8 billion in the firm, up from 73 in the preceding quarter worth $6.5 billion.
RiverPark Large Growth Fund, in their Q1 2021 investor letter, mentioned Square, Inc. (NYSE: SQ). Here is what RiverPark Large Growth Fund has to say about Square, Inc. in their Q1 2021 investor letter:
“We established a position in leading Financial Technology provider Square during the quarter. Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).
The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown
from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of Square’s future value will be from its Cash App business.”
3. SOS Limited (NYSE: SOS)
Number of hedge fund holders: 2
SOS Limited (NYSE: SOS) is a Shandong-based firm that is in the software as a service business. It primarily operates a cloud services company which provides marketing, data, and rescue services. It was founded in 2001 and is placed third on our list of 10 best crypto stocks to buy amid hedge fund interest. The firm is also developing a supercomputing centre in Qingdao that will focus on crypto mining in the next few years.
On April 20, SOS announced that it made a deal for the purchase of 575 crypto mining rigs. The announcement came amid a global shortage of crypto mining equipment worldwide and resulted in a surge in the stock price of SOS. The firm said the rigs would be delivered by the end of the month. Yandai Wang, the CEO of SOS, has called blockchain a growth catalyst for the firm.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Springbok Capital is a leading shareholder in the firm with 27,600 shares worth more than $41,000.
2. MicroStrategy Incorporated (NASDAQ: MSTR)
Number of hedge fund holders: 15
MicroStrategy Incorporated (NASDAQ: MSTR) is a Virginia-based firm that offers business intelligence, mobile software, and cloud-based services. One of the most famous products of the firm is MicroStrategy 2021, a platform giving businesses state-of-the-art analytics experience through hyperintelligence products, visualization, mobility features, and custom applications. The firm was founded in 1998 and is placed second on our list of 10 best crypto stocks to buy amid hedge fund interest.
On April 9, investment banking firm Canaccord Genuity started coverage on MicroStrategy stock with a bullish rating of Buy and a price target of $920. Joseph Vafi, an analyst at the banking firm, said that the future drivers for the company included bitcoin spot price, investor sentiment around crypto, and the performance of Micro’s business intelligence system.
At the end of the fourth quarter of 2020, 15 hedge funds in the database of Insider Monkey held stakes worth $134 million in the firm, down from 20 in the preceding quarter worth $87 million.
Alger Mid Cap Focus Fund, in their Q1 2021 investor letter, mentioned MicroStrategy Incorporated (NASDAQ: MSTR). Here is what Alger Mid Cap Focus Fund has to say about MicroStrategy Incorporated in their Q1 2021 investor letter:
“MicroStrategy Incorporated was among the top contributors to performance. MicroStrategy is a global leader in enterprise analytics software and services. MicroStrategy’s core software platform provides customers with visualization and reporting capabilities, mobility features and custom applications to help with complex business questions. Today, MicroStrategy has over 4,000 customers worldwide. In August 2020, MicroStrategy decided to make bitcoin its preferred reserve currency. To date, MicroStrategy has purchased over 90,000 bitcoins at an aggregate purchase price of $2.17 bi11 ion and an average price of over $23,985 per bitcoin. Going forward, MicroStrategy plans to use excess cash generated by its core business to purchase additional bitcoin.
Shares of MicroStrategy outperformed in the first quarter due to the appreciation of the company’s bitcoin asset, as the price of
bitcoin relative to the U.S. dollar rose materially in the quarter. This bitcoin appreciation was driven by concerns about U.S. dollar inflation as well as other public companies deciding to acquire bitcoin to diversify reserve assets. MicroStrategy is establishing itself as a thought leader in the bitcoin space, and the company hosted an event at its February user conference to help other organizations understand the benefits of bitcoin as a reserve asset. MicroStrategy’s core software business is also benefitting from its status as a leader in the bitcoin space, with the increased public attention aiding MicroStrategy’s recruitment and marketing efforts as the software business continues to transition to a cloud-based subscription model.”
1. Coinbase Global, Inc. (NASDAQ: COIN)
Coinbase Global, Inc. (NASDAQ: COIN) is a California-based cryptocurrency exchange platform. It was founded in 2012 by billionaire Brian Armstrong and is placed first on our list of 10 best crypto stocks to buy amid hedge fund interest. Coinbase went public earlier this month and presently has a market cap of more than $58 billion. It posed close to $450 million in revenue in the last quarter of 2020. The company acts as a platform to let users buy, sell, and store digital currencies like Bitcoin and Ethereum.
The firm has engaged in more than $335 billion worth of crypto transactions from more than 100 countries. It has 56 million users, of which at least 6 million are active on the exchange every month. The public listing of Coinbase has been described as a critical moment for the crypto industry that will help in making the new payments technology mainstream. Coinbase has attracted hedge fund interest in recent days, as Third Point LLC and Ark Investment Management bet big on the company. A more clear picture of hedge fund holdings in the company would be disclosed very soon as hedge funds begin to report their Q1’2021 13F data.
You can also take a peek at 10 Best Biotech Stocks To Buy For 2021, and Top 10 Best Freelancing Platforms and Websites for 2021.
