With a renewed rally, Bitcoin (BTC-USD) has surged by almost 23% in the last month. This is not unusual, with cryptocurrencies having a reputation for skyrocketing in quick time. Bitcoin is likely to trade above $50,000 in the next few months. Besides exposure to quality cryptocurrencies, consider buying some of the best crypto stocks for robust returns.
The news of the possibility of a spot ETF for Bitcoin will likely be a key upside catalyst. Additionally, Bitcoin’s halving is due in 2024 and will have a positive impact on the digital asset.
Further, the rise in geopolitical tensions has supported the flow of funds into Bitcoin. If these factors were insufficient, I would add that potential rate ruts are due next year. A weak dollar is positive for all risky asset classes.
Let’s discuss three crypto stocks to buy at current levels.
Coinbase Global (COIN)
Coinbase (NASDAQ:COIN) stock has already surged by 129% year-to-date. However, the rally from oversold levels does not make COIN stock expensive. I would bet on another 100% returns if Bitcoin touched $50,000.
It’s worth noting that Coinbase is among the top five centralized exchanges globally. The company stands to benefit if there is a cryptocurrency bull market. Trading and speculation will likely increase, translating into higher income for Coinbase.
In March 2023, Coinbase initiated an international expansion drive in six continents. This is important to mention as the company has been making steady business progress during the cryptocurrency bear market. Global expansion and the continued addition of new digital assets to the platform are other factors that will boost trading volumes.
Coinbase ended Q2 2023 with cash and equivalents of $5.5 billion. With adjusted EBITDA turning positive, the company has high financial flexibility to make aggressive investments for growth.
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) is possibly the best Bitcoin mining stock to consider at current levels. After touching highs of $20.7 in July, RIOT stock has corrected to $9.8. This presents a good accumulation opportunity. If Bitcoin touches $50,000 in the next few quarters, RIOT stock will likely triple.
From a fundamental perspective, Riot is attractive, with $510 million in cash and digital assets. Further, the company has a zero-debt balance sheet that provides high financial flexibility.
Riot also has ambitious expansion plans. As of Q3 2023, the company reported a hash rate capacity of 10.7EH/s. The company expects to expand capacity to 20.1EH/s by Q4 2024 and further to 35.4EH/s in 2025.
This will likely translate into robust revenue and cash flow upside if Bitcoin remains in an uptrend. As the company’s financial flexibility increases further, there is a strong case for diversification-driven growth.
I am also tempted to talk about a penny crypto stock to buy as Bitcoin trends higher. Bitfarms (NASDAQ:BITF) is another attractive Bitcoin miner that seems poised to deliver multibagger returns. On a very conservative basis, BITF stock will double from current levels. However, I would not be surprised with 3x to 5x returns if Bitcoin is at $50,000.
As of September, Bitfarms reported a mining capacity of 6.1EH/s with a year-on-year growth of 45%. The important point to note is that Bitfarms reported a liquidity buffer of $65 million for Q2 2023. Additionally, the company expects to be debt free by February 2024. Therefore, there is high financial flexibility to pursue aggressive expansion.
Another positive is that the company is a low-cost Bitcoin miner. For Q2 2023, Bitfarms reported direct cost of production at $15,700 per Bitcoin. Assuming a scenario where Bitcoin trades above $50,000, the company will be positioned to report healthy EBITDA and cash flows. A big rally from current levels, therefore, seems entirely likely.
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.