5 Best Cryptocurrencies to Invest in According to Hedge Funds

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In this article we discuss the 5 best cryptocurrencies to invest in according to hedge fund billionaires. If you want to read our detailed analysis of these currencies, go directly to the 10 Best Cryptocurrencies to Invest in According to Hedge Funds.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind, let’s take a look at the 5 best cryptocurrencies to invest in:

5. Litecoin

Litecoin, released in 2011, is also a Bitcoin spinoff that also offers faster transactions and lower fees compared to Bitcoin on its network. It is ranked fifth on our list of 10 best cryptocurrencies to invest in according to hedge fund billionaires. It is based on a proof-of-work mechanism and is one of the most popular cryptocurrencies on the market, hitting a market cap of more than $10 billion in January this year. It is presently the sixth-largest cryptocurrency in the world despite being a Bitcoin spinoff. 

Grayscale, a leader in digital currency investing, has been loading up alternative coins like Litecoin as Bitcoin and Ethereum fall in value. Grayscale bought 80% of all Litecoin mined in February. This purchase took the total number of altcoin holdings by Grayscale to 1.44 million, which equated to close to $250 million in value. As Bitcoin alternatives become more popular, Litecoin value is expected to grow sharply in the coming weeks and months.

Alphabet Inc. (NASDAQ: GOOG) is connected to the Litecoin story as a former employee at the firm, named Charlie Lee, was one of the founders of the cryptocurrency. Alphabet Inc. (NASDAQ: GOOG) is one of the largest corporate investors in crypto and has consistently backed the rise of the new technology over the years. 

At the end of the first quarter of 2021, 159 hedge funds in the database of Insider Monkey held stakes worth $29 billion in Alphabet Inc. (NASDAQ: GOOG), up from 157 in the previous quarter worth $20 billion. 

Polen Global Growth Fund, in its Q1 2021 investor letter, mentioned Alphabet Inc. (NASDAQ: GOOG). Here is what Polen Global Growth Fund has to say about Alphabet in its letter:

“For our top contributors, each generated strong returns for different, but fundamentally based reasons, in our opinion. Alphabet saw renewed strength recently as advertisers generally resumed spending after a short pause during the pandemic.

Alphabet experienced some challenging quarters in 2020 as many companies paused their advertising spend. But, the business bounced back recently, spurring a strong recovery in the company’s share price. Even during such a challenging period, the company still compounded revenue at 14% in constant currency for 2020.

This is partly due to Alphabet’s multiple growth engines. For example, while its search business was negative one quarter and only grew by 6% during another, YouTube ads and Google Cloud Platform (GCP) grew at over 30% and 46% during the quarter, respectively. YouTube and GCP combined now contribute over 50% of the company’s growth, which we believe is a testament to a strong culture of innovation, a long-term mindset, and prudent capital allocation. With search bouncing back this most recent quarter–growing 17% –we believe that Alphabet continues to be well-positioned to durably compound earnings at or above 15% for many years to come. It remains one of our largest positions.”

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