In this article, we discuss the 5 best cryptocurrencies Redditors are buying. If you want to read our detailed analysis of these cryptocurrencies, go directly to Forget Bitcoin and Ethereum: 10 Best Cryptocurrencies Redditors are Buying.
5. Binance Coin
Binance Coin is a cryptocurrency that is used by the Binance cryptocurrency exchange platform. It is placed fifth on our list of 10 best cryptocurrencies Redditors are buying. The coin used the Ethereum network when it was launched but has since shifted to a private network used by the exchange. The coin has a maximum limit of 200 million tokens. The coin is mostly used to pay fees on the Binance platform, with the company offering users incentives like rebates and up to five years of membership for dealing in the coin.
The Binance network offers support for traditional payment methods like the one used by PayPal Holdings, Inc. (NASDAQ: PYPL). The American payments firm recently allowed users to checkout with crypto holdings and has since integrated many digital currencies on its network. PayPal Holdings, Inc. (NASDAQ: PYPL) has seen share price fall in recent days as crypto-related stocks tumble.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in PayPal Holdings, Inc. (NASDAQ: PYPL) with 12 million shares worth more than $2.9 billion.
4. Ripple
Ripple is an open source payments solution developed by Ripple Labs. The solution includes the Ripple cryptocurrency, exchange platform, and remittance network. It is ranked fourth on our list of 10 best cryptocurrencies Redditors are buying. Ripple was first released in 2012, but the first stable release came as recently as 2018. It is one of the most popular cryptocurrencies on the market. Amid the present controversy surrounding coin mining, it is prudent to mention that a study by Stanford University in 2017 had found that running a server on the Ripple network was like running an email server.
American payments company Square, Inc. (NYSE: SQ) has helped bring cryptocurrencies like Ripple to the mainstream. Square, Inc. (NYSE: SQ) primarily invests in Bitcoin, the most popular cryptocurrency, but has close to $400 million in total crypto-related holdings. The firm is one of the biggest institutional buyers of digital assets.
At the end of the first quarter of 2021, 92 hedge funds in the database of Insider Monkey held stakes worth $9.2 billion in Square, Inc. (NYSE: SQ), up from 89 in the preceding quarter worth $8.8 billion.
Just like Tesla, Inc. (NASDAQ: TSLA) and PayPal Holdings, Inc. (NASDAQ: PYPL), Square, Inc. (NYSE: SQ) is one of the best crypto stocks that Redditors are buying.
3. Cardano
Cardano is a blockchain-based cryptocurrency that was initially released in 2015. A stable release of the currency came earlier this month. It is placed third on our list of 10 best cryptocurrencies Redditors are buying. Cardano uses an open source and decentralized platform with consensus achieved using proof of stake. It is a spinoff of Ethereum, the second most popular crypto coin in the world that has outperformed peers in the market in recent weeks. Canadian mining firm iMining recently announced that it would be launching Cardano, which has switched to a new ERC20 converter.
The mainstreaming of cryptocoins like Cardano is partly due to the hype generated around crypto by big companies like Tesla, Inc. (NASDAQ: TSLA). Earlier this year, Tesla, Inc. (NASDAQ: TSLA) bought more than $1 billion in Bitcoin and announced that it would start accepting it as payment for vehicle sales.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Tesla, Inc. (NASDAQ: TSLA) with 24 million shares worth more than $16 billion.
Just like PayPal Holdings, Inc. (NASDAQ: PYPL) and Square, Inc. (NYSE: SQ), Tesla, Inc. (NASDAQ: TSLA) is one of the best crypto stocks that Redditors are buying.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ: TSLA) in its Q1 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”
2. Polkadot
Polkadot is a payments mechanism that uses heterogeneous multi-chain interchange and translation architecture to connect with public blockchains. It is placed second on our list of 10 best cryptocurrencies Redditors are buying. The cryptocurrency was founded by Gavin Wood, a co-founder of Ethereum. The developers on the project included Parity Technologies, Chainsafe Systems, and Soramitsu. Polkadot was one of the most successful digital currencies of 2020 as it used the DeFi system which lets users with staking to gain instant liquidity through a tradable synthetic token.
The ease and adaptability of cryptocurrencies is partly possible due to the powerful chipsets used by computers to mine these currencies. American visual computing firm NVIDIA Corporation (NASDAQ: NVDA) is a market leader in this regard. NVIDIA Corporation (NASDAQ: NVDA) has seen share price soar in recent weeks as a global chip shortage results in increased chip prices.
At the end of the first quarter of 2021, 80 hedge funds in the database of Insider Monkey held stakes worth $6.2 billion in NVIDIA Corporation (NASDAQ: NVDA), down from 88 in the preceding quarter worth $8.6 billion.
Just like Tesla, Inc. (NASDAQ: TSLA), PayPal Holdings, Inc. (NASDAQ: PYPL), and Square, Inc. (NYSE: SQ), NVIDIA Corporation (NASDAQ: NVDA) is one of the best crypto stocks that Redditors are buying.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ: NVDA) was one of them. Here is what the fund said:
“NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA to the portfolio.”
1. Bitcoin Cash
Bitcoin Cash is a Bitcoin spinoff currency that uses the blockchain network to offer lower transaction fees than Bitcoin. It is placed first on our list of 10 best cryptocurrencies Redditors are buying. Compared to the parent coin, it also has increased scalability options. Since Bitcoin Cash was introduced, many other coins in the market have emerged that use the same technology to market the same kind of product. Hundreds of retailers around the world accept payments in Bitcoin Cash. The currency can handle more transactions per minute than Bitcoin.
Although many major tech firms have allowed users to deal in cryptocurrencies on their platforms, the one glaring exception remains American retail giant Amazon.com, Inc. (NASDAQ: AMZN). Amazon.com, Inc. (NASDAQ: AMZN) accepts crypto-linked gift cards on its platform, but has over the years repeatedly denied user requests to checkout with cryptocurrencies.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. (NASDAQ: AMZN) with 3.3 million shares worth more than $10 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ: AMZN) was one of them. Here is what the fund said:
“We purchased Amazon in February 2021, which accounts for 5% of the Portfolio’s weighting. For most of the last decade, Amazon did not meet our guardrails. We also did not have enough visibility into future free cash flow margins to indicate that the company would sustainably meet our guardrails and, relatedly, if valuation supported the double-digit annualized returns we seek. We now believe we have that visibility.
In 2008, almost all of Amazon’s revenue and operating profits came from its e-commerce business. Amazon Prime and Amazon Web Services (AWS) were new and relatively small back then. The company had roughly 5% operating profit margins overall, entirely from the e-commerce business. In 2009, the company began harvesting its retail business profits to accelerate investment in its distribution and logistics infrastructure globally and very heavily build out and scale AWS data centers. The company’s return on equity began to decline at that time and turned negative for three full years from mid-2012 to mid-2015 (margins and free cash flow declined similarly). So, beginning in 2010 and continuing to mid-2018, Amazon’s business was outside our guardrails. We chose to stick to our guardrails and not own Amazon.
Amazon’s profit drivers have changed quite dramatically over the years. Starting in the back half of 2018, Amazon came back above our hurdles. Revenue generation overcame ongoing heavy investments in areas such as delivery infrastructure, data center infrastructure, and shipping.
Our research suggests that today, after considering cost allocation, Amazon’s underlying profit drivers from higher-margin AWS and Advertising could grow much faster than its low-margin e-commerce business (excluding Prime), its historical driver of revenues and operating profits.
Amazon Prime, AWS, and Advertising together account for only about 20% of revenue today, but we believe over 150% of operating profits. Looking forward, growth higher-margin businesses means Amazon’s total margins and profit dollars could rise quite dramatically.
It is important to note that Amazon proved to be an exception to our guardrails. Based on our experience, very few companies that remain outside our guardrails for an extended period operate from a position of competitive strength but rather, from a position of competitive pressure. Today, we feel we have better visibility into the future earnings growth and margins from AWS and Advertising and believe these could drive 30%+ annual earnings growth for the next five years. Even with significant P/E multiple compression, we would still expect double-digit investment returns.”
You can also take a peek at 15 Best Cryptocurrency Trading Platforms in 2021, 10 Biggest Companies That Are Bullish On Ethereum, 10 Best Blockchain Stocks To Buy and Cathie Wood’s Top 10 Stock Picks.
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