11 Best Cryptocurrency Stocks to Buy According to Hedge Funds – Yahoo Finance
In this article, we discuss 11 best cryptocurrency stocks to buy according to hedge funds. If you want to see more stocks in this selection, check out 5 Best Cryptocurrency Stocks to Buy According to Hedge Funds.
As major currencies including the British Pound Sterling and Chinese Yuan plummet, Bitcoin has beaten the trend, gaining 6.3% over the last seven days as of September 27 and reaching the $20,000 mark. The macro environment, plagued with rampant inflation and uncertainty regarding monetary policies, has battered global stock markets. Although Bitcoin has been swinging rapidly, its resilient performance lately has been shocking for Wall Street. Sven Henrich, founder of the markets research firm NorthmanTrader, marveled in a recent tweet that it is astonishing that we live in a world where “Bitcoin suddenly is less volatile than fiat currencies”.
Although many investors believe Bitcoin to be a hedge against inflation, it has a deep link to the US market, which represents its mounting association with the traditional money markets. Companies like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Mastercard Incorporated (NYSE:MA) have helped with mainstreaming crypto adoption.
Cryptocurrency has been largely criticized for its negative impact on the environment. The White House has warned crypto firms to lower energy usage during mining operations. The US has become a hub for crypto miners, and the latest Ethereum merger, which includes an upgrade from a proof-of-work mechanism to the proof-of-stake model, will largely shrink Ethereum’s carbon footprint. Ethereum’s energy consumption will reduce by 99.95%, in addition to improving transaction speed and making transactions cheaper. This is a positive catalyst for the crypto industry as a whole.
These are the most popular crypto stocks among the 865 hedge funds tracked by Insider Monkey as of the end of the second quarter. These companies have deep links to the crypto universe. We have arranged the list according to the hedge fund sentiment around the securities, which was assessed from Insider Monkey’s Q2 2022 database of about 900 elite hedge funds.
Number of Hedge Fund Holders: 29
Coinbase Global, Inc. (NASDAQ:COIN) is an American company providing financial infrastructure and technology for the crypto economy in the United States and internationally. On September 19, Coinbase Global, Inc. (NASDAQ:COIN) announced that it will implement a new fee structure to factor in changes to the global crypto trading volumes and prices.
On September 14, JPMorgan analyst Kenneth Worthington raised the price target on Coinbase Global, Inc. (NASDAQ:COIN) to $78 from $64 and maintained a Neutral rating on the shares. The analyst estimated that Coinbase Global, Inc. (NASDAQ:COIN) has a “substantial revenue opportunity” from higher interest rates. The Coinbase revenue opportunity is more significant as compared to other financial institutions, reflecting “some unique investments and idiosyncrasies with crypto accounts,” the analyst told investors.
According to Insider Monkey’s data, 29 hedge funds were long Coinbase Global, Inc. (NASDAQ:COIN) at the end of the second quarter of 2022, compared to 46 funds in the last quarter. Cathie Wood’s ARK Investment Management is the leading position holder in the company, with approximately 9 million shares worth $699 million.
Like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Mastercard Incorporated (NYSE:MA), Coinbase Global, Inc. (NASDAQ:COIN) is one of the best cryptocurrency stocks to buy according to hedge funds.
Here is what Miller Value Partners Opportunity Trust Fund has to say about Coinbase Global, Inc. (NASDAQ:COIN) in its Q2 2022 investor letter:
“Coinbase Global Inc. Ordinary Shares (NASDAQ:COIN) fell during the quarter as the crypto markets continued to suffer. While the company reported disappointing results, it committed to capping EBITDA losses at $500M even in the event of “a prolonged market downturn”. COIN’s ample liquidity ($6b in cash on hand) should enable them to survive a prolonged “crypto winter” and invest to strengthen the business in the downturn. While the crypto market is early in its adoption, Coinbase is focused on building the platform for crypto not only supporting trading, and cold storage, but moving into NFTs, staking, and crypto derivatives. We see tremendous upside potential for COIN over the next decade if they are able to successfully execute on their platform strategy.”
Number of Hedge Fund Holders: 56
CME Group Inc. (NASDAQ:CME) is an Illinois-based company that operates the world’s largest financial derivatives exchange, trading in multiple asset classes such as agricultural products, currencies, energy, interest rates, metals, stock indexes, and cryptocurrencies futures. On September 12, CME Group Inc. (NASDAQ:CME) launched options on Ethereum (ETH-USD) futures as interest in ETH derivatives increased ahead of the blockchain’s much-awaited merge to Proof-of-Stake from Proof-of-Work mechanism. The move came after the CME Group Inc. (NASDAQ:CME) introduced Bitcoin Euro and Ether Euro futures at the end of August.
On September 6, Credit Suisse analyst Gautam Sawant maintained a Neutral rating on CME Group Inc. (NASDAQ:CME) and lowered the price target on the shares to $210 from $216, citing August volumes of 21.2 million contract ADV that increased 4% month-over-month and 22% year-over-year, benefiting from higher interest rates.
According to Insider Monkey’s data, 56 hedge funds were long CME Group Inc. (NASDAQ:CME) at the end of June 2022, compared to 58 funds in the prior quarter. GuardCap Asset Management is the leading position holder in the company, with 4.2 million shares worth $858.7 million.
Here is what Baron Durable Advantage Fund has to say about CME Group Inc. (NASDAQ:CME) in its Q1 2022 investor letter:
“CME Group, Inc. (NASDAQ:CME) operates the world’s largest and most diversified derivatives marketplace. Shares rose 4.6%, contributing to results as elevated market volatility and rising interest rates led to higher trading activity on CME’s exchanges. Average daily trading volume increased 19% year-over-year with notable strength in Interest Rates and Equities products. We continue to own the stock due to CME’s strong competitive moats, underpinned by its product breadth and liquidity depth, as well as its sustainable growth characteristics driven by the secular shift from uncleared over-the-counter trading to exchange-traded futures while also benefiting from the rising rate environment.”
Number of Hedge Fund Holders: 65
Intel Corporation (NASDAQ:INTC) is a California-based company that develops and markets computer products and technologies worldwide. In April 2022, Intel Corporation (NASDAQ:INTC) announced its new Intel Blockscale ASIC, providing customers with energy-efficient hashing for proof-of-work consensus networks. Intel Blockscale ASIC will deliver the energy efficiency and computing power needed to achieve scalability and sustainability of operations. Intel Corporation (NASDAQ:INTC) is one of the best cryptocurrency stocks to buy.
On September 16, Intel Corporation (NASDAQ:INTC) declared a quarterly dividend of $0.365 per share, in line with previous. The dividend is distributable on December 1, to shareholders of the company as of November 7. The company delivered a dividend yield of 5.43% on September 27.
Deutsche Bank analyst Ross Seymore on September 8 reaffirmed a Hold rating on Intel Corporation (NASDAQ:INTC) and lowered the price target on the shares to $35 from $38. For the second consecutive quarter, Intel Corporation (NASDAQ:INTC) management posted a weak pre-announcement at an investor conference, reporting it now anticipates Q3 results to be near the low end of its guidance range, the analyst told investors in a research note.
According to the second quarter database of Insider Monkey, 65 hedge funds held stakes worth $2.5 billion in Intel Corporation (NASDAQ:INTC), compared to 76 funds in the last quarter worth $3.15 billion. David Blood and Al Gore’s Generation Investment Management is the biggest stakeholder of the company, with 14.7 million shares valued at $552.5 million.
Here is what Baron Funds specifically said about Intel Corporation (NASDAQ:INTC) in its Q2 2022 investor letter:
“Then, there is the case of Intel Corporation (NASDAQ:INTC). A blue-chip tech champion with a market capitalization of over $500 billion in early 2000, the stock was trading at a P/E multiple of 42. It was a fast-growing company whose stock price and multiple declined more or less in line with its peers. However, unlike Google, Intel’s net income has grown from $7.3 billion in 1999 to $19.9 billion in 2021, a compounded annual growth rate of just 4.7%. Its growth from the dot com era has not proven to be durable, and Intel has yet to trade at the price it attained in 1999.”
Number of Hedge Fund Holders: 67
American Express Company (NYSE:AXP) is an American multinational corporation specializing in payment card services. In June 2022, Abra, a digital asset financial services company, announced that Abra Crypto Card on the American Express network will transact in U.S. dollars and offer crypto back on any purchase category and amount. American Express Company (NYSE:AXP) is one of the best crypto stocks to buy according to elite hedge funds.
On July 26, Citi analyst Arren Cyganovich raised the price target on American Express Company (NYSE:AXP) to $159 from $148 and kept a Neutral rating on the shares after the Q2 results. American Express Company (NYSE:AXP) posted solid sales results driven by a faster recovery in international travel, the analyst told investors in a research note. However, increased operating and marketing expenses offset some of the earnings potential, the analyst added.
According to Insider Monkey’s Q2 data, 67 hedge funds were bullish on American Express Company (NYSE:AXP), compared to 69 funds in the last quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with 151.6 million shares worth $21 billion.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and American Express Company (NYSE:AXP) was one of them. Here is what the fund said:
“In financials, American Express Company (NYSE:AXP) has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.”
Number of Hedge Fund Holders: 72
Block, Inc. (NYSE:SQ) is an American multinational technology conglomerate that serves the financial services, mobile payments, and point of sale industries. Block, Inc. (NYSE:SQ), run by Twitter co-founder and crypto proponent Jack Dorsey, is extremely focused on Bitcoin. Block, Inc. (NYSE:SQ)’s Cash App makes it easy to invest in stocks and Bitcoin. Although Block, Inc. (NYSE:SQ) stock has declined over 60% year-to-date, its gross margins profile is set to improve through FY23, which should be accretive to its adjusted EBITDA profitability.
On September 27, Mizuho analyst Dan Dolev said his study of alcohol spending across 18 states indicates initial signs of consumers moving away from expensive categories such as cognac or scotch, towards cheaper alternatives like vodka. “If true, it may signal emerging financial hardship amongst low-income consumers,” the analyst told investors in a research note. Since about 80% of Cash App’s 47 million users earn $85,000 or less annually, any negative impact on the spending of the low-income consumer “may have an outsized impact” on Block, Inc. (NYSE:SQ)’s financials, which is a cause for concern, contended the analyst. He kept a Neutral rating on the shares with a $57 price target.
According to Insider Monkey’s data, 72 hedge funds were bullish on Block, Inc. (NYSE:SQ) at the end of June, compared to 84 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the biggest Block, Inc. (NYSE:SQ) stakeholder, with a position worth $799.5 million. It is one of the best cryptocurrency stocks to buy according to hedge funds.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Block, Inc. (NYSE:SQ) was one of them. Here is what the fund said:
“Block, Inc. (NYSE:SQ) provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. Shares fell due to mixed quarterly results with more modest growth in the Seller business offsetting strength in Cash App. While integration of recently acquired Afterpay is progressing well and credit metrics remain healthy, the buy-now-pay-later business slowed due to greater competitive intensity. We continue to own the stock due to Block’s long runway for growth, sustainable competitive advantages, and unique corporate culture.”
Number of Hedge Fund Holders: 97
PayPal Holdings, Inc. (NASDAQ:PYPL) enables digital payments on behalf of merchants and consumers worldwide, offering payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy brands. In August, PayPal Holdings, Inc. (NASDAQ:PYPL) announced that users can move crypto from PayPal to external crypto addresses including exchanges and hardware wallets, with no fees or network charges to send or receive crypto assets.
On September 26, Canaccord analyst Joseph Vafi noted that despite a difficult macro backdrop, he sees the upcoming Pay with Venmo launch on Amazon as the next catalyst for PayPal Holdings, Inc. (NASDAQ:PYPL) shares. He reiterated a Buy recommendation on PayPal Holdings, Inc. (NASDAQ:PYPL) with a $160 price target.
According to Insider Monkey’s data, 97 hedge funds were bullish on PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of Q2 2022, compared to 100 funds in the prior quarter. Ken Fisher’s Fisher Asset Management featured as the leading position holder in the company, with 17.3 million shares worth $1.2 billion.
Like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Mastercard Incorporated (NYSE:MA), elite hedge funds are piling into PayPal Holdings, Inc. (NASDAQ:PYPL) for safe exposure to the crypto market.
Here is what RiverPark Wedgewood Fund has to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q2 2022 investor letter:
“PayPal Holdings detracted from performance despite the Company generating healthy growth. Revenue grew +8%, but closer to +15% when adjusted for the well-telegraphed roll-off of its eBay relationship. As the Company laps the headwinds of eBay and difficult year-ago comparisons, we expect PayPal should drive long-term growth in the mid-teens. Much of this will be driven by further penetration into the Company’s nearly 450 million active users.
PayPal’s user base has grown by +50% since the onset of the pandemic so it makes sense for management to focus on driving higher transactions per account and better monetize this historical windfall of users. In our opinion, the shares have discounted away all of PayPal’s pandemic user and revenue gains, so we added to positions during the quarter.”
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Disclosure: None. 11 Best Cryptocurrency Stocks to Buy According to Hedge Funds is originally published on Insider Monkey.
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