Run Crypto Boom with these 3 bearings
Approx. 15% of the American public owns some form of cryptocurrency – and a large part of this group jumped on the bandwagon in the last two years. The digital currencies – Bitcoin is the most famous, but there are many others – give users a clear set of benefits based on their blockchain technology. First, cryptocurrencies are secure ̵
1; as a digital technology, blockchain is notoriously difficult to break. Second, coins have the main attribute of any store of value: scarcity. There is a mathematical limit to how many Bitcoin, for example, will ever exist – and that limit gives them their value. People want a secure online currency, are willing to pay for it, and the relatively scarce (compared to traditional fiat currencies) cryptocurrencies offer both attributes. The result, in recent years, has been a boom as investors have begun to take the crypto sector seriously. Of course, any digital currency will need a variety of services to be usable. Financial companies, to back it up, and payment servers, to handle transactions just to name two. Other companies and larger business figures – Elon Musk comes to mind easily – will invest heavily in it. All of this creates a landscape where investors can take advantage of crypto without ever buying an actual coin. They can buy into the companies that are ready to drive cryptocurrency boom to higher profits. How big is crypto? The market for it surpassed $ 2 trillion earlier this month, a number that is hard to get your head around. So as usual, we have turned to the TipRanks platform to help us make sense of the stock landscape in terms of crypto. We have found three stocks – from different sectors – which, according to some of Street’s best analysts, are ready to deliver cryptocurrency gains. Let’s dive in. Silvergate Capital (SI) We start in the financial world, appropriately when discussing a new financial asset such as crypto. Silvergate Capital is a commercial bank, chartered in California, providing financial services and infrastructure to customers in the digital currency industry. Silvergate has been in the financial industry for over 3 decades and has been making a profit every year for the past 21 years. Silvergate entered digital currency in 2013 with an active pursuit of digital currency customers. Today, the company has over 1,100 customers in this sector. In March this year, Silvergate expanded its digital currency services using a custodian service to hold Bitcoin as collateral for commercial loans in U.S. dollars. The service offers large Bitcoin holders a way to access liquid capital without selling the underlying cryptocurrency. Silvergate provides Bitcoin security through Coinbase and Fidelity Digital Assets. In the recent economic release, Silvergate reported for the 1st quarter 21 EPS at 55 cents per share. Stock and beat industry estimates by 14% and even better and grew 139% year over year. Supporting earnings growth, Silvergate achieved 29% growth in the customer base over the year. Digital currency deposits grew from $ 5 billion at the end of December to $ 6.8 billion at the end of March. The company’s rapid growth can also be seen in the share value, which has risen by an astonishing 582% over the last 12 months. 5-star analyst Joseph Vafi of Canaccord Genuity is impressed with Silvergate’s growth in digital currency banking, writing: “Silvergate delivered again in Q1, highlighted by another nearly 40% sequential increase in deposits above 130 +% q / q increase in Q4. This impressive deposit growth was driven by a similarly strong growth in demand for the use of the Silvergate Exchange Network (SEN) as institutional interest in bitcoin continues to accelerate. Equally important are the implications of the two strategic offerings with Fidelity and Coinbase inked in Q1. In our view, it is becoming clear that not only is it appearing as an important financial service cog across all institutional cryptocurrency trading, but SI is now becoming the key partner for cryptocurrency managers seeking to offer margin lending. It is important that Silvergate has a core competitive cost advantage in cryptocurrency lending given its underlying bank charter which provides a very low cost of capital by raising zero interest rates with customers. Vafi, which is ranked in the top 100 by Wall Streets analysts, is buying SI shares, and its $ 150 price target suggests the stock has room for 36% growth this year. (To view Vafi’s track record, click here.) Canaccords Vafi is no outstanding in his bullish views. Silvergate has 5 recent reviews and they include 4 purchases against a single team, for a strong buy consensus rating. The stock’s stock price is $ 107.22, and the average price target of $ 158 implies a 45% uptrend – even more bullish than Vafi allows – for the coming year. (See Silvergates stock analysis on TipRanks.) PayPal Holdings, Inc. (PYPL) While Silvergate is hardly a household name, PayPal has become one. The company is the market leader in online payment processing, a thriving industry in itself, and its top-line revenue grew from $ 17.7 billion. $ In 2019 to 21.4 billion. $ In 2020. The company recorded sequential increases in revenue in the second, third and fourth quarters of last year, and then the 4th quarter EPS reached $ 1, up from 43 cents in the first quarter of the previous year. That PayPal’s growth has come during the pandemic is not surprising. We all know that e-commerce grew last year and benefit from social lockdown policies, and e-commerce requires online payment processors. PayPal has a leading role in this industry with over 377 million active accounts, completing 4.4 billion payment transactions totaling $ 277 billion in payment volume. In a major development for the company, PayPal announced in April that its mobile payment app, Venmo, will now allow users to buy, sell and hold four cryptocurrencies: Bitcoin, Ethereum, Litecoin and Bitcoin Cash. According to a study, about 30% of Venmo’s users already trade in crypto; this move makes their transactions more convenient and opens up an easy encryption route for Venmo’s full user base of 70 million. BTIG analyst Mark Palmer pointed out a key factor in PayPal’s new Venmo feature, writing: “The move marked for the first time that consumers will be able to use crypto to make purchases at a wide range of merchants. The crypto option is now available in the US with more than half of PYPL’s 29mm traders, with the company saying more will be added soon. “Palmer believes that this move towards crypto will be a positive net for PayPal, and he backs it up with a purchase rating and $ 345 price target, which implies a one-year upside of 31%. (To view Palmer’s track record, click here.) That Wall Street agrees with Palmer is clear from the strong buy’s consensus rating on the stock, supported by new fewer than 29 recent Buy ratings. These outweigh the 4 teams that are also set here. PYPL shares are trading at $ 262.29 and their average price target of $ 310.68 suggests that the stock has room to grow by 18% this year. (See PayPal’s stock analysis on TipRanks.) CleanSpark (CLSK) Last up, CleanSpark, is both a software company and a pure energy company. It makes more sense than it initially would have been clear – CleanSpark’s software products are designed to control microglids and distributed energy systems. These systems allow users to exit the grid and opt out of traditional power distribution to harness cleaner green energy sources. CleanSpark provides the control software for these systems. Earlier this year, CleanSpark made a few bold moves that created waves in its own industry and in crypto. In March, the company marketed an offering of public shares – more than 9 million ordinary shares – at $ 22 each, raising more than $ 200 million before expenses. That alone got message from investors. In addition, the company began using the funds to buy more Bitcoin mining rigs. These are the computer systems through which new bitcoins are generated. They draw huge amounts of power, put out a lot of heat – and CleanSpark has invested heavily, not only in the computational rigs that will slowly produce new bitcoins, but in the clean energy infrastructure to make the company’s Atlanta mining 95% carbon free. The company’s latest investment in Bitcoin mining will begin to take physical shape later this year. And finally, in April, CleanSpark announced that it had secured contracts for an additional 22,680 Bitcoin miners. Once all the new rigs are installed and running, CleanSpark expects to increase its Bitcoin mine production to more than 3.2 EH / s. In the quarter ended March 31, CleanSpark produced 144 Bitcoins and has produced a total of 205 Bitcoins since it began mining in December. In all of this, CleanSpark has not lost sight of its original focus. The company also announced in April that it had secured a net increase of $ 16.2 million in its microgrite contracts, a year-over-year increase of 220%. To cover this stock for HC Wainwright, top analyst Amit Dayal writes: “We believe that CleanSpark’s performance on the micronet and Bitcoin mining fronts could place the company above our expectations for FY2021, as our assumptions now seem relatively conservative. The stock has been retreating since the January 2021 highs along with some other Bitcoin mining components and general weakness over small cap names. However, we believe that Bitcoin prices remain well above our assumptions, no known changes in mining, and the company adds to its microgrite delay, the operational side of the story seems intact. We believe that CleanSpark’s valuation remains convincing at the current level, as the company is expected to have annual revenue and earnings growth of more than 150% and more than 1,000%, respectively, in FY2022. Consistent with his positive outlook, Dayal CLSK shares offer a Buy rating with a price target of $ 50, indicating confidence in a robust 135% upside over the next 12 months. (To view Dayal’s track record, click here.) There are only two recent reviews on this stock – including Dayal’s – but both agree: this is one to buy. CLSK shares are currently trading at $ 21.26 and the price target is averaging $ 47.50, indicating an upward share of 123% this year. (See CleanSpark’s stock analysis at TipRanks.) To find great ideas for stocks trading at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important to do your own analysis before making an investment.