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Front-Run the Next Bitcoin Boom: 3 Crypto Stocks to Buy Now

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After a big rally in the first two months of the year, Bitcoin (BTC-USD) seems to be consolidating. Amidst the volatility, the cryptocurrency has traded between $60,000 to $70,000. However, with Bitcoin halving done, I expect a fresh rally relatively soon. Therefore, the current consolidation phase is a good time to consider some crypto stocks to buy for quick returns.

Besides the Bitcoin halving factor, there is another reason to be bullish on cryptocurrencies. It’s likely that there will be multiple rate cuts in the next 12 to 18 months. Expansionary monetary policies are positive for risky asset classes. I expect trading and speculative activity to increase, benefiting major crypto exchanges.

Further, there are some fundamentally strong Bitcoin miners. These companies have ambitious capacity expansion plans for the next 18 months

Let’s talk about their crypto stocks to buy before they surge higher.

Coinbase (COIN)

Coinbase (COIN), is an American company that operates a cryptocurrency exchange platform. Ethereum (ETH-USD) coin on the background of the Coinbase inscription.

Source: Sergei Elagin / Shutterstock.com

Coinbase (NASDAQ:COIN) stock has witnessed a massive rally of almost 300% in the last 12 months. However, the upside has been from deeply oversold levels and COIN stock remains attractive. My view is underscored by the point that the growth stock trades at a forward price-earnings ratio of 31.

An important point to note is that the rally in Bitcoin is likely to be followed by some big price action in altcoins. The bull market is far from the euphoria stage and as altcoins rally, I expect a surge in trading and speculative activity. This will likely benefit Coinbase in the coming quarters and translate into healthy revenue and cash flow upside.

Further, Coinbase utilized 2023 for aggressive international expansion. The company expanded from one country (the United States) to a presence in 38 countries by the end of the year. The impact of this expansion will be seen in the form of stellar growth in the coming quarters.

With a strong cash buffer, international expansion, and continued growth in institutional clients, Coinbase is positioned to be a value creator.

Marathon Digital (MARA)

In this photo illustration, the Marathon Digital Holdings (MARA) logo seen displayed on a smartphone screen

Source: rafapress / Shutterstock.com

Marathon Digital (NASDAQ:MARA) stock has surged by 123% in the last six months. This has been in sync with the rally in Bitcoin. However, MARA stock remains undervalued and has ambitious growth plans. I expect another 100% returns from current levels in the next 12 months.

It’s worth noting that Marathon began 2024 with a deployed hash rate of 24.7EH/s. The company is targeting to increase capacity to 50EH/s by the end of the year. This is likely to translate into healthy revenue and EBITDA growth.

From a financial perspective, Marathon reported cash and equivalents of $425.6 million as of February. For the same period, the value of the company’s Bitcoin holdings was $1 billion. I must add that Marathon has reduced debt by 58% on a year-on-year basis as of Q4 2023. Therefore, there is ample flexibility to pursue aggressive growth beyond the current year.

Riot Platforms (RIOT)

In this photo illustration, the Riot Platforms (RIOT) logo is displayed on a smartphone screen.

Source: rafapress / Shutterstock.com

Riot Platforms (NASDAQ:RIOT) is another massively undervalued Bitcoin miner poised for a big rally. The stock trades at a forward price-earnings ratio of 16.2 and has been sideways in the last 12 months. I expect 100% returns from RIOT stock within one or two quarters.

The first point to note about Riot is strong fundamentals. The company has a cash buffer (including digital assets) of $1.3 billion. Further, with a zero-debt balance sheet, ample headroom exists for aggressive capacity expansion.

It’s worth noting that Riot reported a cost to mine one Bitcoin of $23,034 for Q1 2024. This is after discounting higher network difficulty and higher fixed costs. With Bitcoin trading above $60,000, the EBITDA margin should remain robust in the coming quarters.

At the same time, Riot expects to increase hash rate capacity from 12.4EH/s as of Q1 2024 to 100EH/s by 2027. With sustained capacity growth, there is visibility for revenue and cash flow upside. RIOT stock is, therefore, a potential multibagger.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

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The post Front-Run the Next Bitcoin Boom: 3 Crypto Stocks to Buy Now appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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