12 Best Cryptocurrency Stocks to Invest in 2021
In this article we discuss the 12 best cryptocurrency stocks to invest in 2021. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Cryptocurrency Stocks to Invest in 2021.
Bitcoin, the most popular cryptocurrency in the world that has registered a sharp decrease in price over the past few weeks, was given a much needed boost on June 9 after El Salvador became the first country in the world to adopt the coin as legal tender. Nayib Bukele, the 39-year-old president of the country, supported the tender and has argued that the cryptocurrency will jumpstart the economy, help with remittance transfers, and improve the banking penetration rate in the country.
Bitcoin, which had fallen to below $30,000 in April, rallied after the bill regarding the mainstreaming of the coin was approved by lawmakers, climbing to around $38,000, but was still far below the record $64,000 touched before the freefall started two months ago. The cryptocurrency has been hit in recent weeks by criticism on energy intensive mining methods and a regulatory crackdown in China. Tesla, Inc. (NASDAQ: TSLA) chief Elon Musk has been one of the most powerful voices on the issue on social media.
Since Tesla, Inc. (NASDAQ: TSLA) is one of the largest institutional backers of Bitcoin, the public criticism has battered the cryptocurrency. As Bitcoin fell, other crypto-related stocks, like Coinbase Global, Inc. (NASDAQ: COIN) and Square, Inc. (NYSE: SQ) also pulled back from record highs, fueling speculation around the future of cryptocurrencies. However, despite the bear market, hedge funds have been piling into crypto stocks like Coinbase Global, Inc. (NASDAQ: COIN) and Square, Inc. (NYSE: SQ) in recent months.
The general outlook on the industry remains positive, with market experts, money managers, and technology officers of big corporations mostly bullish on the future of cryptocurrencies in general and the future of Bitcoin in particular. Ethereum, the second most popular crypto coin, is being touted as the next big breakaway start of the industry. Other altcoins like Ripple, Bitcoin Cash, and Cardano have been making strides as well. Retail investor interest, which is shaping market dynamics in this regard, is often touted as the key to this digital revolution.
Cryptocurrencies have also spearheaded the rise of fintech, a disruptor in the finance world that even established institutions have struggled to cope with. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of the 12 best cryptocurrency stocks to invest in 2021. These stocks have been selected keeping in mind their relevance to the crypto economy, the business principles guiding their earnings, and consumer interest around their products.
Best Cryptocurrency Stocks to Invest in 2021
12. Canaan Inc. (NASDAQ: CAN)
Number of Hedge Fund Holders: 9
Canaan Inc. (NASDAQ: CAN) is a Chinese company that makes and sells microprocessing solutions for crypto mining. As Beijing crackdowns on crypto operations in the country, the firm has expanded in markets overseas, reporting a 538% year-on-year growth in revenue over the first three months of 2021 despite government pressures. The company is ranked twelfth on our list of 12 best cryptocurrency stocks to invest in 2021.
On June 16, Canaan Inc. (NASDAQ: CAN) announced that it had signed a deal with crypto mining firm Genesis Digital Assets to supply 10,000 mining machines by the end of the month. The company’s shares have offered investors returns exceeding 392% over the course of the past twelve months.
At the end of the first quarter of 2021, 9 hedge funds in the database of Insider Monkey held stakes worth $47 million in Canaan Inc. (NASDAQ: CAN), up from 4 the preceding quarter worth $3.8 million.
Just like Coinbase Global, Inc. (NASDAQ: COIN), Tesla, Inc. (NASDAQ: TSLA), and Square, Inc. (NYSE: SQ), Canaan Inc. (NASDAQ: CAN) is one of the best cryptocurrency stocks to invest in 2021.
11. Marathon Digital Holdings, Inc. (NASDAQ: MARA)
Number of Hedge Fund Holders: 10
Marathon Digital Holdings, Inc. (NASDAQ: MARA) is a technology company that concentrates on mining cryptocurrencies but has interests in other digital assets as well. The company is set to join the Russell 2000, an index measuring the performance of small-cap companies based in the United States, from June 28. Fred Thiel, the CEO of the company, has said that joining the index will increase visibility to investors.
On June 2, Marathon Digital Holdings, Inc. (NASDAQ: MARA) announced that it had mined over 226 Bitcoins in May, an increase of 40% compared to the production in April. The total number of coins owned by the firm now stands at 5,518, worth over $203 million.
At the end of the first quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $197 million in Marathon Digital Holdings, Inc. (NASDAQ: MARA), up from 8 the preceding quarter worth $5.9 million.
Just like Coinbase Global, Inc. (NASDAQ: COIN), Tesla, Inc. (NASDAQ: TSLA), and Square, Inc. (NYSE: SQ), Marathon Digital Holdings, Inc. (NASDAQ: MARA) is one of the best cryptocurrency stocks to invest in 2021.
10. CME Group Inc. (NASDAQ: CME)
Number of Hedge Fund Holders: 60
CME Group Inc. (NASDAQ: CME) is a financial derivatives exchange that offers trades related to cryptocurrencies. On May 11, the firm announced that Micro Bitcoin futures volume had exceeded 100,000 contracts in less than a week of trading, highlighting the crypto appeal among investors. Tim McCourt, the global head of Equity Index and Alternative Investment Products at the firm, has previously said that CME Group Inc. (NASDAQ: CME) is seeking growth and increased participation in crypto futures and options.
CME Group Inc. (NASDAQ: CME), as one of the largest exchanges in the world, is a very safe bet for income investors. On May 5, the company declared a quarterly dividend of $0.90 per share, in line with previous. The forward yield was 1.76%. The company is placed tenth on our list of 12 best cryptocurrency stocks to invest in 2021.
At the end of the first quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in CME Group Inc. (NASDAQ: CME), up from 58 the preceding quarter worth $2.2 billion.
In its Q1 2021 investor letter, Cooper Investors, an asset management firm, highlighted a few stocks and CME Group Inc. (NASDAQ: CME) was one of them. Here is what the fund said:
“CME has been owned by the portfolio for five years. CME’s strategic positioning as a monopolistic global financial exchange operator will continue to afford the business a highly attractive margin profile. CME is well managed however we can no longer identify clear value latency opportunities for the management team to execute against and so decided to exit our position.”
9. NVIDIA Corporation (NASDAQ: NVDA)
Number of Hedge Fund Holders: 80
NVIDIA Corporation (NASDAQ: NVDA) is a technology company that concentrates on the development of computer and mobile hardware. The powerful chipsets marketed by the company are used in mining operations around the world. Although the firm has recently started marketing products exclusively for miners, there is still competition among miners and gamers for the hardware that the company sells. In April, it announced that all product lines were outperforming expectations, sending the company’s stock into overdrive.
NVIDIA Corporation (NASDAQ: NVDA) has been upgraded and given price boosts by several investment advisories over the past few weeks. Craig-Hallum recently upgraded the stock to Buy from Hold and revised the price target to $750 from $550. The company is ranked ninth on our list of 12 best cryptocurrency stocks to invest in 2021.
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 the preceding quarter worth $8.6 billion.
Just like Coinbase Global, Inc. (NASDAQ: COIN), Tesla, Inc. (NASDAQ: TSLA), and Square, Inc. (NYSE: SQ), NVIDIA Corporation (NASDAQ: NVDA) is one of the best cryptocurrency stocks to invest in 2021.
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.”
8. Mastercard Incorporated (NYSE: MA)
Number of Hedge Fund Holders: 151
Mastercard Incorporated (NYSE: MA) is one of the largest payments firms in the world. It has recently announced a credit card in collaboration with the Gemini Exchange that allows those who own the card to get up to 3% back if they qualify purchases in any of the thirty different cryptocurrencies supported by the card. The company’s shares have returned more than 19% to investors over the course of the past twelve months. It is placed eighth on our list of 12 best cryptocurrency stocks to invest in 2021.
In late April, Mastercard Incorporated (NYSE: MA) beat market expectations on earnings per share and revenue for the first quarter of 2021, reporting a purchase volume of $1.29 trillion over the period.
Out of the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Mastercard Incorporated (NYSE: MA) with 5.8 million shares worth more than $2 billion.
Just like Coinbase Global, Inc. (NASDAQ: COIN), Tesla, Inc. (NASDAQ: TSLA), and Square, Inc. (NYSE: SQ), Mastercard Incorporated (NYSE: MA) is one of the best cryptocurrency stocks to invest in 2021.
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE: MA) was one of them. Here is what the fund said:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
7. Riot Blockchain, Inc. (NASDAQ: RIOT)
Number of Hedge Fund Holders: 12
Riot Blockchain, Inc. (NASDAQ: RIOT) is a Bitcoin mining company that engages in industrial scale mining of the coin, employing a fleet of over 7,000 miners for the purpose. It operates in North America and is among the crypto stocks that have registered slim gains this week as Bitcoin briefly hit $40,000 again after a torrid few weeks. The stock has returned more than 1,406% to investors in the past year. It is ranked seventh on our list of 12 best cryptocurrency stocks to invest in 2021.
Despite increasing total cash and Bitcoin to over $275 million in the first three months of 2021, Riot Blockchain, Inc. (NASDAQ: RIOT) missed market predictions on quarterly revenue and earnings per share. However, the firm announced a 62% quarter-over-quarter increase in total mined coins while posting earnings results.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Riot Blockchain, Inc. (NASDAQ: RIOT) with 2.2 million shares worth more than $120 million.
Just like Coinbase Global, Inc. (NASDAQ: COIN), Tesla, Inc. (NASDAQ: TSLA), and Square, Inc. (NYSE: SQ), Riot Blockchain, Inc. (NASDAQ: RIOT) is one of the best cryptocurrency stocks to invest in 2021.
6. PayPal Holdings, Inc. (NASDAQ: PYPL)
Number of Hedge Fund Holders: 143
PayPal Holdings, Inc. (NASDAQ: PYPL) is placed sixth on our list of 12 best cryptocurrency stocks to invest in 2021. It is a payments company that facilitates cross-border electronic transactions at low fees. The services offered by the firm are used by hundreds of millions of users around the world. Earlier this year, the company had allowed the use of Bitcoin and three other cryptocurrencies for purchases made with PayPal. In late May, the firm announced that it was planning to allow third-party wallet transfers of Bitcoin as well.
PayPal Holdings, Inc. (NASDAQ: PYPL) stock has returned more than 64% to investors over the course of the past year. On May 10, CEO Dan Schulman reiterated that the company was confident of meeting five year growth targets despite the recent losses as crypto stocks tumbled in tandem with Bitcoin, highlighting that the year 2021 was going to be a tough one for the firm.
At the end of the first quarter of 2021, 143 hedge funds in the database of Insider Monkey held stakes worth $14.7 billion in PayPal Holdings, Inc. (NASDAQ: PYPL), down from 147 in the preceding quarter worth $15.9 billion.
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