The Bitcoin (BTC-USD) halving event has passed, and with it comes a renewed interest in blockchain technology and its potential for transforming various industries. As the cryptocurrency market continues to evolve, savvy investors are looking beyond just Bitcoin and exploring opportunities in companies that are leveraging blockchain technology to disrupt traditional business models.
Despite the fears around “higher for longer” interest rates, geopolitical instabilities and a stock market sell-off, I am firmly bullish on Bitcoin’s short-term future. The coin has already made a run up to $66,000 at the time of writing over the past few days, and as ETF trading goes into full swing this week, I believe that those numbers could approach the $70,000 mark.
It should be noted that Bitcoin was overvalued based on several momentum indicators such as the Relative Strength Index (RSI) before the sell-off occurred this month. In order for it to maintain such a high price velocity, an extremely bullish backdrop would have been needed.
But now that Bitcoin has come back to Earth again, I think it’s in the prime spot for rocketing higher, and blockchain stocks can be a great way to do so.
So here are seven blockchain stocks for investors to consider.
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) has established itself as a leader in the Bitcoin mining industry by significantly increasing its mining power while simultaneously reducing its cost of mining Bitcoin to nearly zero. This remarkable achievement is largely due to the company’s strategic power use and the power credits it arranges with energy companies. By paying around $6,141 per Bitcoin, Riot Platforms can pocket the premium, giving it a substantial edge over its competitors.
The company’s power management strategy sets it apart in an industry often criticized for its heavy electricity use and high operating costs. This competitive advantage positions RIOT for continued success moving forward.
I see RIOT as being a synthetic (and leveraged) bet on Bitcoin for obvious and not-immediately not obvious reasons. I think that Bitcoin miners like RIOT will one day transition their business models to something more sustainable energy wise.
But with the stock being up 10.13% already on Monday before the market opens at the time of writing, this implies there could be significant volatility on the cards to send RIOT to the moon later this week.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is recognized not only for its high-performance GPUs but also for its significant role in the blockchain and cryptocurrency sectors. The company’s GPUs are widely used in cryptocurrency mining, which is crucial for the mining of various digital currencies. This has helped establish Nvidia as a strong player in the blockchain market.
Despite its primary fame in AI and gaming technologies, Nvidia’s impact extends significantly into the crypto world, influencing the dynamics of AI crypto tokens. For example, tokens like Fetch.ai (FET-USD) are often affected by Nvidia’s performance, given the company’s substantial sway over the tech and crypto industries.
For this reason I think that NVDA could rally over the next week especially as the halving events gets fully priced in.
Financially, Nvidia also presents an interesting opportunity. While its trailing price-to-earnings (P/E) ratio is high, indicating a rich valuation, its forward P/E ratio suggests that the market is optimistic about its future earnings potential.
Greenidge Generation (GREE)
Greenidge Generation (NASDAQ:GREE) operates as a vertically integrated cryptocurrency datacenter and power generation company. It’s notably engaged in cryptocurrency mining with a focus on using greener technologies, which positions it distinctively in the sector.
Despite experiencing a significant drop in its stock value over the past year, the company is making strides in enhancing its infrastructure, having recently expanded its power capacity with additional low-cost power in key territories such as South Carolina and Mississippi.
As a penny stock, GREE’s daily charts look somewhat like a heart rate monitor, and I believe that its volatility will only increase.
GREE is attempting to solve what some consider one of Bitcoin’s most pressing issues: energy use, or rather energy waste. Of course, one can always make the argument that any form of energy spent on Bitcoin is wasteful, but then it wouldn’t matter what energy source you could use in that case.
GREE is making a practical step forward while other miners have their heads in the sands that the energy use is a problem, which makes it one of those stocks to buy to take advantage of the halving event.
Coinbase (COIN)
Coinbase (NASDAQ:COIN) is perhaps the most obvious play for investors looking to take advantage of the Bitcoin halving event. Additionally, the potential ongoing implementation of spot Bitcoin ETFs in the U.S. could reshape the market by broadening access to cryptocurrencies and adding layers of financial products, which COIN is a key custodian of.
I expect that COIN will see some record quarters over the next year via a huge number of trading fees, especially in the current quarter.
Some of this can be explained via the (speculatively artificial) expansion of the mempool recently. This has led to record transaction fees being charged over a short time period, with some as high as $10,000 on the extreme end of the scale.
The reason being is that some projects have stopped building on alternative blockchains such as Ethereum (ETH-USD) and opt for building on Bitcoin instead for its perceived credibility. Teams are minting ETFs, and a cynic would suggest that these prices are being driven artificially higher.
Although this thesis is speculative and somewhat cynical, it’s undeniable that transaction fees have gone up considerably, and this on top of all the trading fees that COIN will be announcing as well, making it one of those hot stocks to watch.
MicroStrategy (MSTR)
MicroStrategy (NASDAQ:MSTR) holds a significant amount of Bitcoin, heavily influencing its stock value due to its investment in the cryptocurrency.
My thesis for MSTR is that its book value per share will be inflated throughout the year as Bitcoin continues its rally. This in turn may lead institutions and retail investors to surmise that it’s undervalued, which would drive its stock price higher.
MSTR currently holds around 214,246 bitcoins on the balance sheet, which is the equivalent to over 1% of all the total bitcoin that has ever been mined, a huge sum, Bloomberg reported.
Furthermore, in its recent activities, MSTR completed substantial financial maneuvers, including the issuance of $603.75 million in convertible notes, aiming to further increase its Bitcoin holdings.
MSTR has made a pullback on the yearly chart and it trades considerably below its all-time high. I think that if Bitcoin is able to breach its key resistance areas then we’ll see MSTR also rocket in response.
Marathon Digital (MARA)
Marathon Digital (NASDAQ:MARA) is a prominent player in the Bitcoin mining industry with extensive operations.
MARA has outlined ambitious plans for expansion and growth. The company aims to increase its Bitcoin mining capacity. Additionally, MARA intends to continue investing in the latest mining hardware and technology.
The CEO of Marathon, Fred Thiel, suggested that the halving event was already priced into the market. Thiel believed that significant demand from ETFs has already absorbed some of this impact. As a result, the halving may have a limited effect on Bitcoin prices.
This may seem to contradict MARA was one of the post-having stocks to buy, but the recent price movements by Bitcoin seem to suggest otherwise. Bitcoin briefly breached the $60,000 support level and has since rebounded strongly after the halving event. ETF inflows are also strong.
The issue with saying that the market is “pricing things in” is that it’s a reasonable assumption but ultimately an unfalsifiable thing to claim. For the record: MARA is up 3% in pre-market trading today.
Bitdeer Technologies (BTDR)
Bitdeer Technologies (NASDAQ:BTDR) offers competitive share prices and has a low breakeven point for Bitcoin mining.
Bitdeer reported robust revenues in the fourth quarter of the previous year, with a significant increase in self-mining revenues. The company also achieved positive earnings per share (EPS) compared to the previous year.
Bitdeer has also made strategic moves to enhance its profitability and expand its operations. These include appointing founder Jihan Wu as CEO, opening a data center in Bhutan to reduce electricity costs, and leveraging immersion cooling technology in its Norway data center to optimize electricity usage.
The main reason I like BTDR though comes from its low valuation, especially compared to other Bitcoin miners. It trades a just 1.89 times sales, and has a positive forward P/E ratio.
As a relatively undervalued gem in the market, I think that BTDR has has the potential to surge much higher.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.