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10 Cryptocurrencies Reddit is Buying for the Next Bull Run

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·10 min read
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In this article, we discuss the 10 cryptocurrencies Reddit is buying for the next bull run. If you want to skip our detailed analysis of these currencies, go directly to the 5 Cryptocurrencies Reddit is Buying for the Next Bull Run.

The past year was in many ways a defining one for the crypto industry. Bitcoin, the most popular coin, reached an all-time high of around $65,000 in mid-April before witnessing a spectacular fall in the summer that saw the price shrink by almost half to around $30,000. The coin had begun the year trading at near $29,000. Other coins like Ethereum underwent a similar high and low, highlighting the risks associated with investing in crypto but also underlining the resilience of the blockchain technology in the face of regulatory and trust hurdles. Institutional and celebrity endorsements of crypto reached a record high in 2021 as well.

NFTs, DeFi and Regulating Crypto in 2022

Looking ahead to a new year, Redditors are already touting the potential of cryptocurrencies as a dependable hedge against inflation. Many investors have been looking towards inflation hedges to manage the risk in their growth-heavy portfolios as interest rates go up. The emergence of DeFi and NFTs has added another layer of complexity to the crypto universe. According to a report by Research and Markets, the global crypto market will reach a size of over $4 billion by 2022, growing at a compound annual growth rate of over 70%.

Investors who want to take advantage of the explosive growth potential of the new technology should consider investing in crypto-focused companies. Some of the top crypto stocks to buy now include NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), among others discussed in detail below.

Photo by Mohamed Hadji on Unsplash

Our Methodology

These were picked from a careful assessment of comments published on different Reddit forums over the past twenty-four hours. The details of each cryptocurrency are mentioned alongside a discussion around top companies working in the sector to provide readers with some context for their investment decisions.

The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.

Cryptocurrencies Reddit is Buying for the Next Bull Run

10. Loopring

Loopring is a cryptocurrency founded by Daniel Wang, a former software engineer at Google, which uses the Ethereum blockchain to trade coins. The main advantage that the coin offers over others that use the same network is the cost at which it makes trades. These costs are a fraction of what others like Uniswap offer for the same trades. Loopring aims to be the coin that will eventually lead the decentralized building of non-custodial, order book-based exchanges. It will leverage zero-knowledge proofs for this.

It has become easier for coins like Loopring to become mainstream as companies like Visa Inc. (NYSE:V), a California-based payments firm, back their progress. Approval from Visa Inc. (NYSE:V), a company heavily backed by hedge funds — at the end of the third quarter of 2021, 143 hedge funds in the database of Insider Monkey held stakes worth $26 billion in Visa Inc. (NYSE:V) — is crucial for newer coins to compete in the volatile crypto market.

Just like NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V) is one of the stocks that growth investors are buying.

In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:

“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa.”

9. Fantom

Fantom has risen to prominence on Reddit as a cheaper alternative to Ethereum. The latter has become famous for the security and stability of the platform compared to peers like Bitcoin. Fantom, which uses the “aBFT Proof-of-Stake” consensus mechanism, is designed in a similar way, prioritizing security while aiming to maximize speeds of transactions. Fantom has quickly established itself among the 30 most popular coins in the world despite going live only in 2019. The coin has a supply of over 3 billion and more than 2.5 billion are already in circulation.

Companies like Square, Inc. (NYSE:SQ) have expressed confidence that coins like Fantom can succeed, affirming their long-term commitment to blockchain technology. Square, Inc. (NYSE:SQ) is led by Jack Dorsey, the founder of Twitter, and endorsed by close to 100 hedge funds who hold stakes worth $8.8 billion in the firm, according to the latest 13F data.

In its Q1 2021 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and Square, Inc. (NYSE:SQ) was one of them. Here is what the fund said:

“We established a position in leading Financial Technology provider Square, Inc. (NYSE:SQ) during the quarter. Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).

The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.

We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of Square, Inc. (NYSE:SQ)’s future value will be from its Cash App business.”

8. Polkadot

Polkadot is famous among Redditors because the network on which it operates allows users to create custom blockchain solutions. For example, investors on the Bitcoin and Ethereum blockchain often have to use native coins. On the Polkadot platform, protocols exist for making new blockchains or connecting several existing ones for fast and scalable usage. Polkadot offers a “distributed computing” of blockchain, a unique proposition in the fintech world where the new technology is still evolving.

Polkadot has been integrated into the digital payments ecosystem of companies like PayPal Holdings, Inc. (NASDAQ:PYPL). The hedge fund sentiment around PayPal Holdings, Inc. (NASDAQ:PYPL) illustrates the importance of this integration for Polkadot. At the end of September, 123 hedge funds in the database of Insider Monkey were long PayPal Holdings, Inc. (NASDAQ:PYPL) with stakes worth $12.8 billion.

In addition to cryptocurrencies, growth hedge funds are also piling into tech names like PayPal Holdings, Inc. (NASDAQ:PYPL), NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms, Inc. (NASDAQ:FB).

In its Q4 2020 investor letter, Polen Capital Management, an asset management firm, highlighted a few stocks and PayPal Holdings, Inc. (NASDAQ:PYPL) was one of them. Here is what the fund said:

“For the full year 2020, one of the top performers was PayPal, which we purchased in 2019, the company continues to take market share in digital payments and has seen an acceleration in user adoption and engagement, especially within their “silver tech” or older user demographic. We expect many more years of ongoing double-digit growth from their various business segments and new initiatives.”

7. Ripple

Redditors have been interested in finding high-quality investments in the cryptocurrency market given the volatility associated with the market in 2021. Ripple is often touted as one of the “safest” bets in the cryptoverse. This is because Ripple is the coin used on RippleNet, a cross-border money exchange platform designed by Ripple developers to act as an alternative to SWIFT payments. Since the RippleNet platform charges minor fees for transactions, market experts like Balaji Srinivasan have backed cryptocurrencies like Ripple to take over the SWIFT market in the coming years.

Along with Srinivasan, tech giants like Microsoft Corporation (NASDAQ:MSFT), the Washington-based software firm, are also bullish on the future of the crypto revolution. Microsoft Corporation (NASDAQ:MSFT) is backed by titans of the hedge fund industry, including Fisher Asset Management that holds 24.8 million shares worth more than $6.7 billion in the company.

In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:

“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”

6. Polygon

Polygon is a coin used by the Polygon network that acts as a framework for building Ethereum-based blockchain networks. The coin has surged by over 30% in the past few weeks despite a broader lull around crypto. It is now among the 15 largest coins in the world by market capitalization. To put this into perspective, there are over 5,000 crypto coins presently trading globally. In addition to building new networks, Polygon is also used to improve the transaction speeds and lower cost of transactions on the Ethereum network.

One of the biggest cheerleaders of the wider adoption of blockchain has been Meta Platforms, Inc. (NASDAQ:FB), the Mark Zuckerberg-led firm that runs some of the biggest social media platforms in the world. Meta Platforms, Inc. (NASDAQ:FB) is one of the most popular stocks among hedge funds. At the end of September, 248 funds in the Insider Monkey database were long Meta Platforms, Inc. (NASDAQ:FB) with stakes worth $38 billion.

Alongside NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB) is one of the stocks attracting the attention of Redditors.

In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:

“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”

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Disclose. None. 10 Cryptocurrencies Reddit is Buying for the Next Bull Run is originally published on Insider Monkey.