We recently compiled a list of the 12 Best Cryptocurrency Stocks to Buy According to Wall Street. In this article, we are going to take a look at where Block, Inc. (NYSE:SQ) stands against the other cryptocurrency stocks.
How’s the US Crypto Market Unfolding Post-Election?
Post Donald Trump’s victory in the US presidential elections, the price of bitcoin rose above $80,000 for the first time ever. Other cryptocurrencies such as dogecoin which is the favorite coin of Elon Musk, a strong Trump supporter, are also posting gains, as reported by BBC. On November 12, Bitcoin neared a record $90,000.
While Trump has revealed his plans to make America the crypto capital of the world, he has stated that he would be sacking the current chair of the Securities and Exchange Commission, Gary Gensler, who has led the SEC’s crackdown on the crypto market. Gensler tried to regulate the market which he believed, was at least partially made up of securities trading illegally. Market analyst at StoneX Financial, Matt Simpson, emphasized that bitcoin prices could go as high as $100,000 in case the Trump administration deregulates crypto.
Although Trump was once railing against cryptocurrencies, he later embraced crypto as he started a new crypto business called World Liberty Financial in September. While commenting on the crypto industry, he said “It’s very young and very growing” and that he believes in it. He has also expressed support for domestic Bitcoin miners saying that if crypto is going to define the future, he wants it to be mined, minted, and made in the US.
Market Anticipation: Is Crypto in a Golden Era?
Bitcoin has surged more than 26% since election day on November 5. As reported by CNBC, Mike Colonnese, an analyst at H.C. Wainwright, stated:
“Bitcoin is now in price discovery mode after breaking through all-time highs early last Wednesday morning when it was officially declared that Trump won the election. Strong positive sentiment is likely to persist through the balance of 2024 and [we] see bitcoin prices potentially reaching the six-figure mark by the end of this year.”
As the crypto market anticipates a positive and bright regulatory climate under the Trump administration, crypto-focused stocks also surged post-election. Vice President and General Manager of Robinhood, Johann Kerbrat, appeared on CNBC and referred to the post-election scenario as a big moment for the firm on the crypto side considering bitcoin was not even a fraction of its current price two years ago. The firm saw a lot of activity on the crypto volume. While the company has faced scrutiny from the SEC under the Biden administration, Kerbrat is hopeful to see more crypto-friendly policymaking.
Bitwise’s Matt Hougan seconded this stance when he appeared on CNBC Crypto World on November 12. In his opinion, Trump’s economic policies should be positive for crypto. He referred to the prevailing market as a golden age of crypto and that it’s right to be bullish. While he thinks that crypto has been fighting with one hand tied behind its back during the past four years and has faced a lot of regulatory unclarity, the scenario has shifted 180 degrees with a positive regulatory environment to look forward to. Finally, Hougan calls the market a win-win post-election. Regarding the future outlook for Bitcoin, he states that there is a clear path right up to $100,000 by 2024’s end while $200,000 is completely reasonable for 2025, considering that the trend is up and is going to stay intact for a while.
Our Methodology:
In order to compile a list of the 12 best cryptocurrency stocks to buy according to Wall Street, we first utilized stock screeners, ETFs, and online rankings to make an extended list of the major crypto companies. Moving on, we shortlisted the top 12 stocks from our list which had the highest upside potential, as of November 12. The 12 best cryptocurrency stocks to buy according to Wall Street have been arranged in ascending order of their average upside potential.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
People using the Cash App paying for goods and services, highlighting the impact the of the company’s payment tools.
Block, Inc. (NYSE:SQ)
Average Upside Potential: 8.25%
Block, Inc. (NYSE:SQ) is a technology company that focuses on financial services and helps expand access to the economy. Block comprises Square, Cash App, Spiral, TIDAL, and TBD. Square offers an integrated ecosystem of commerce solutions, business software, and banking services for sellers to grow their business while Cash App allows sending, spending, or investing money in stocks or bitcoin. Spiral advances the use of Bitcoin by building and funding free, open-source projects whereas TIDAL is a platform for musicians and their fans. TBD eases access to Bitcoin and other blockchain technologies.
Block, Inc.’s (NYSE:SQ) growth remains at scale with rising profitability. The core businesses are robust with adjusted operating income margins growing significantly for both Square and Cash App. The firm has also expanded its addressable market over time. With Square representing a nearly $130 billion gross profit opportunity and Cash App representing a nearly $75 billion gross profit opportunity in the US, the market potential is strong. The strong profitable growth across Block depicts that its ecosystems are efficiently delivering differentiated value to its customers. The firm has also shifted to a functional organizational structure to improve collaboration across ecosystems.
In the third quarter, the firm’s gross profit rose 19% year-over-year to $2.25 billion. Square generated a gross profit of $932 million, up 16% year-over-year, due to strength in its software and integrated payments and banking products. Cash App generated a gross profit of $1.31 billion, up 21% year-over-year, driven by strong performance across Cash App Card, Cash App Borrow, and BNPL platform. Overall, the firm delivered year-over-year improvement across all profitability measures including adjusted EBITDA.
The company’s potential for continued growth and profitability across its key businesses, its ability to generate substantial free cash flow, and its strategic shift to a functional organizational structure make it attractive to investors.
Overall SQ ranks 11th on our list of the best cryptocurrency stocks to buy according to Wall Street. While we acknowledge the potential of SQ as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than SQ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.