U.S. markets closed
  • S&P Futures

    4,150.25
    -3.25 (-0.08%)
     
  • Dow Futures

    33,147.00
    -8.00 (-0.02%)
     
  • Nasdaq Futures

    14,038.00
    +3.00 (+0.02%)
     
  • Russell 2000 Futures

    2,231.60
    +1.00 (+0.04%)
     
  • Crude Oil

    71.85
    +0.21 (+0.29%)
     
  • Gold

    1,769.00
    0.00 (0.00%)
     
  • Silver

    25.95
    -0.02 (-0.07%)
     
  • EUR/USD

    1.1876
    +0.0011 (+0.10%)
     
  • 10-Yr Bond

    1.4500
    -0.0610 (-4.04%)
     
  • Vix

    20.70
    +2.95 (+16.62%)
     
  • GBP/USD

    1.3819
    +0.0010 (+0.08%)
     
  • USD/JPY

    110.1800
    +0.0300 (+0.03%)
     
  • BTC-USD

    35,600.69
    -1.78 (-0.00%)
     
  • CMC Crypto 200

    888.52
    -51.42 (-5.47%)
     
  • FTSE 100

    7,017.47
    -135.96 (-1.90%)
     
  • Nikkei 225

    28,964.08
    -54.22 (-0.19%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Bet on These 3 Stocks to Make the Most of Cryptocurrency Craze

·6 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

The financial markets have been buzzing with interest and intrigue surrounding cryptocurrency.

The crypto enthusiasts witnessed a series of fascinating developments over the week. The events ranged from Dogecoin’s price fluctuations as a result of damaging remarks and damage control series of tweets by Tesla’s TSLA CEO Elon Musk to Facebook’s FB CEO, Mark Zuckerberg naming his goats, Bitcoin and Max, as revealed in a post.

Moreover, Musk recently tweeted that Tesla is discontinuing Bitcoin payments over concerns of cryptocurrency’s reliance on energy-intensive mining units.

Meanwhile, Facebook's once ambitious global-scale crypto plans are going subtle with operations shift from Switzerland to the United States in a bid to launch a stablecoin backed by U.S. dollars in partnership with a bank.

Nevertheless, coronavirus crisis induced momentum in digital payments and contactless trading has led to increasing acceptance of blockchain technology-backed Bitcoin and other cryptocurrencies like Ethereum, Litecoin, Ripple, Monero and Zcash across corporations.

Various notable companies are gradually warming up to the idea of cryptocurrencies as payment options, while other corporations are increasing bitcoin holdings. Moreover, retailers are taking interest in exploring small-cap crypto assets, including Dogecoin.

Following a roller coaster ride in the past two years, resurgence in trading of Bitcoin and other competing cryptocurrencies can be ascertained by recent record new highs in 2021. Notably, Ethereum closest rival to Bitcoin, hit an new all-time high of $4,197.47 on May 10.

This growing interest marks a strong comeback for cryptocurrencies and remains a major positive for blockchain space.

The companies including Marathon Digital Holdings, Inc. MARA, NVIDIA Corporation NVDA and PayPal Holdings, Inc. PYPL are poised to capitalize on this resurgence with active involvement in cryptocurrency and investments in next gen blockchain technology capabilities.

Factors Fueling Crypto Acceptance

Cryptocurrencies, which hold the potential to revolutionize the process of peer-to-peer and remittance transactions, are gaining strongly from the decentralized system, low fees, transparency of distributed ledger technology, protection from consumer chargebacks and quick international transfers.

Blockchain-based automated system is transparent and incorruptible, and meant to provide unaltered information. Since blockchain utilizes a distributed consensus, it is difficult to tamper with the records without being noticed by an entire network. Thereby, the possibility of monetary losses is low with minimum chances of double counting and hacking.

Moreover, coronavirus crisis has presented new challenges and exposed several loopholes in the current digital ecosystem. The prominent issues that have surfaced are data tracing, security, visibility and management, and supervision.

Evolution of blockchain practices in a bid to address these challenges is expected to democratize the use of cryptocurrency in the days ahead and aid in countering the pandemic in an efficient way, with proper anti-money laundering (AML) guidelines in place.

Growth Prospects Proliferate

The aforementioned factors are driving growth in digital currency (especially bitcoin) transactions globally. Growing demand for alternative currency as a result of the ongoing pandemic remains a tailwind.

Per a report from Statista, the number of daily Ethereum transactions at end of first-quarter 2021 exceeded the mark of 363 million, jumping significantly from around 149 million at end of first-quarter 2018.

Further, a report from Mordor Intelligence shows that the global cryptocurrency market is expected to grow at a CAGR of 60.2% between 2020 and 2025.

Here we discuss three stocks, which have strong fundamentals that poise them well to capitalize on the ongoing crypto craze. Moreover, these stocks either carry a Zacks Rank #1 (Strong Buy) or a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Marathon Digital Holdings recently noted that as of May 6, 2021, it produced 386 newly minted bitcoins, increasing total holdings to 5,324 bitcoins that have a market value of roughly $298.8 million.

This Zacks Rank #1 company’s active mining fleet as of May 6, 2021 consisted of nearly 13,644 miners, generating approximately 1.46 Exahash per second (EH/s).

Moreover, Marathon announced that it is by directing all of the company’s hashrate to the Marathon OFAC Pool. This makes it the first North American enterprise Bitcoin miner to produce Bitcoin in a manner that adheres to AML and the U.S. Department of the Treasury’s Office of Foreign Asset Control’s (OFAC’s) standards.

Marathon Digital Holdings, Inc. Price and Consensus
Marathon Digital Holdings, Inc. Price and Consensus

The Zacks Consensus Estimate for its 2021 earnings has been revised upward by 75% in 60 days’ time to $2.10 per share.

NVIDIA is benefiting from strong demand for mining cryptocurrencies. Markedly, crypto mining contributed revenues between $100 million and $300 million in fourth-quarter fiscal 2021.

Moreover, the company has launched Cryptocurrency Mining Processor (CMP), a product line for professional mining. CMPs enable improved airflow while mining and also have a lower peak core voltage and frequency, which enhances mining power efficiency.

For the first quarter of fiscal 2021, NVIDIA, currently carrying a Zacks Rank #2, expects CMP to contribute revenues of $50 million.

NVIDIA Corporation Price and Consensus
NVIDIA Corporation Price and Consensus

The consensus mark for fiscal 2022 earnings moved north by 1% over the past 30 days to $13.61 per share.

Another Zacks Rank #2 company, PayPal is looking forward to exploring the opportunities presented by growing influence of cryptocurrencies. The company’s CEO, Dan Schulman, cited that recent surveys have stated that nearly 74% of millennials anticipate that “they are going to use crypto in the next year or two in some way.”

In a bid to bolster its efforts in the booming cryptocurrency space, PayPal announced acquisition of Curv, which is a Tel Aviv-based digital asset security technology provider.

Moreover, the company unveiled a feature called Checkout with Crypto in a bid to boost its offerings. Notably, the new feature allows customers to convert their cryptocurrency holdings seamlessly into fiat currency at checkout.

With businesses, millennials and Gen-Z accepting crypto and coronavirus crisis triggering the use of digital payments, PayPal with its ongoing initiatives stands to benefit a great deal.

PayPal Holdings, Inc. Price and Consensus
PayPal Holdings, Inc. Price and Consensus

The Zacks Consensus Estimate for its 2021 earnings has been revised upward by 3 cents in the past 30 days to $4.60 per share.

Zacks' Top Picks to Cash in on Artificial Intelligence

In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.

See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Tesla, Inc. (TSLA) : Free Stock Analysis Report

Facebook, Inc. (FB) : Free Stock Analysis Report

PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report

Marathon Digital Holdings, Inc. (MARA) : Free Stock Analysis Report

To read this article on Zacks.com click here.