Bitcoin (BTC-USD) never ceases to surprise investors. The cryptocurrency markets entered 2023 with depressed sentiments and within six months, Bitcoin has surged by 82%. Besides being oversold, the digital currency seems to be discounting relative dollar weakness and an impending halving event in 2024. I believe that Bitcoin is likely to remain in an uptrend and it’s a good time to consider some crypto stocks to buy for multibagger returns.
In terms of optimistic projections, Standard Chartered believes that Bitcoin can touch $100,000 by the end of 2024. It’s also being opined that global crypto users can swell to one billion by 2025. If these projections hold true, the best crypto stocks to buy are poised for massive upside.
Even if Bitcoin trades near previous highs, there is ample scope for upside in undervalued crypto stocks. With this overview, let’s talk about three crypto stocks to buy to benefit from an impending cryptocurrency bull market.
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) is among the crypto stocks to buy for multibagger returns potential. The Bitcoin miner looks attractively valued even after a rally of 245% for year-to-date 2023.
A big reason to be bullish on Riot is high financial flexibility. As of Q1 2023, the company reported cash and digital assets of $390 million. With Bitcoin trending higher, the value of digital assets will swell. Additionally, with a zero-debt balance sheet, the company is positioned to aggressive expansion in mining capacity.
To put things into perspective, Riot reported capacity of 10.5EH/s as of March with plans to boost capacity to 12.5EH/s by the second half of 2023. Recently, the company announced an agreement to purchase 33,280 miners. Upon full deployment in 2024, mining capacity will increase to 20.1EH/s. The company has the option to buy 66,560 additional miners that would boost the capacity to 35.4EH/s.
Therefore, there is visibility for more than 3x expansion in mining capacity in the next 12 to 24 months. If Bitcoin remains in an uptrend, this will translate into robust EBITDA and cash flow growth.
Coinbase Global (COIN)
Coinbase (NASDAQ:COIN) stock has surged by 108% for the year on the back of Bitcoin trending higher. However, the short interest in COIN stock remains high at 19% of free-float. I believe that if the trend for Bitcoin remains bullish, a massive short-squeeze rally is impending.
I must admit that the cryptocurrency market euphoria is nowhere close to 2021. Trading activity has therefore been subdued and Coinbase remains impacted. However, if the Bitcoin rally sustains, altcoins will join the party and that will boost the outlook for Coinbase.
It’s worth noting that Coinbase is pursuing aggressive global expansion. With robust financial flexibility, the company plans to make inroads in important markets across six continents. The benefits will be seen when a full-fledged bull market is underway.
Another positive to note is that the company’s subscription and services revenue has been increasing on a quarter-on-quarter basis. The main growth drivers being interest income and blockchain rewards. With premium services for institutional clients, I expect growth in this segment to sustain.
Bitfarms (BITF)
I am tempted to talk about a penny stock among the crypto stocks to buy. If Bitcoin trades near previous highs in 2024, I believe that Bitfarms (NASDAQ:BITF) stock can deliver 10x returns from current levels.
Being a penny stock does not imply that Bitfarms has weak fundamentals. As of March, the company reported a liquidity buffer of $41 million and debt of $17 million. The company has reduced debt by $140 million in the last 10 months. With the rally in Bitcoin, the company is poised for aggressive expansion of mining capacity.
I also like the fact the Bitfarms is a low-cost Bitcoin miner. For Q1 2023, the company reported $12,500 as the direct cost of producing one Bitcoin. Bitfarms is therefore positioned for significant EBITDA margin expansion and cash flow upside in the coming quarters. With these positives coupled with steady growth in mining capacity, BITF stock is 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.
