Forget Bitcoin: Here are The Crypto Assets To Follow

Forget Bitcoin: Here are The Crypto Assets To Follow

Bitcoin — all the rage since first crossing the $1,000 price mark in 2017 — is the least exciting crypto asset on the market. Like many “firsts,” Bitcoin enjoys widespread brand recognition, but that recognition doesn’t accurately reflect its value as an asset, particularly in comparison to other available assets in the crypto market.

Bitcoin is to the crypto market what Netscape was to search engines in the early days of the Internet. There’s a need for a better solution, and the market is responding.

Real innovation in the crypto market now takes place in decentralized finance (DeFi) and the mainly Ethereum-based (ETH) infrastructure that underpins it. DeFi, which supports everything from decentralized exchanges to token based lending, mimics the structure of traditional financial markets in the open, transparent forum of a blockchain-based infrastructure. According to ConsenSys, more than $2 billion worth of transactions occur daily on decentralized exchanges and more than $23 billion in outstanding decentralized loans have been granted as of March 2021.

And that’s just the tip of the iceberg.

Rather than focus on Bitcoin, the following are crypto assets worth watching, as they are best positioned to capitalize on the growing popularity and practicality of decentralized finance:

UniSwap (UNI)

UniSwap is a decentralized liquidity protocol that facilitates automated trading of decentralized finance tokens. Compatible with any ERC-20 token in the ethereum ecosystem, it has a current market cap exceeding $16 billion and

continues to grow rapidly. In January of this year, it traded around $5 — it currently trades in the $30 range.

UNI is well positioned within the DeFi space, as it represents the largest decentralized exchange in the crypto market. As such, it is slated to capitalize on the onset of FinTech 2.0, of which DeFi is the key component, and the market’s expected multi-trillion dollar growth over the next several years as it converges with traditional finance.

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Litecoin (LTC)

Litecoin, an early alt coin dating back to 2011, took some of the best features from Bitcoin while focusing on providing a less onerous processing framework to decrease the block generation time. Litecoin can process a block every 2.5 minutes, compared to Bitcoin’s 10 minutes. It is a peer-to-peer Internet currency with a fully decentralized, open source, global payment network. LTC is a great example of the potential for peer-to-peer cryptocurrency and the importance of continuous innovation.

LTC started 2021 trading at roughly $124 and currently trades at around $262. It boasts an almost $18 billion market cap and a 24-hour transaction volume of more than $10 billion. It is relatively liquid and has great potential for further upside.

Chainlink (LINK)

Chainlink is a decentralized network designed to connect smart contracts with data from the non-crypto space. LINK provides reliable, tamper-proof inputs and outputs for complex smart contracts on any blockchain and will potentially be the “link” that weaves different networks together. It serves as another solid example of the strengths of DeFi, as it’s a connector and a facilitator for further innovation.

LINK’s price has risen along with the other core DeFi tokens: it increased from $0.19 in January 2018 to approximately $35, currently.

The DeFi and the general crypto infrastructure space represents one of the top opportunity sets for the next decade across all asset classes. As the crypto market continues to mature and to grow in participation, these players in the ecosystem will stand to benefit in ways that Bitcoin simply cannot. The current growth rate in this space promises to continue, with these technologies eventually evolving into the dominant players in financial markets. But only those best positioned for that future will endure.

If the crypto space is truly successful, there will be hundreds of thousands, if not millions of tokenized assets trading on blockchains with smart contract components. Bitcoin will be just one of them, and certainly not the most attractive.

Nikolas Joyce is CIO of The Strategic Funds.

Edited Photo Via Unsplash

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© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Ride the Crypto Boom with These 3 Stocks

Some 15% of the American public owns some form of cryptocurrency – and a large part of that group jumped on the bandwagon in the last two years. The digital currencies – Bitcoin is the most famous, but there are scores of others – offer users a distinct set of advantages, based on their blockchain technology. First, the crypto coins are secure – as a digital technology, blockchain is notoriously difficult to break. Second, the coins have the chief attribute of any store of value: scarcity. There is a mathematical limit to how many Bitcoin, for example, will ever exist – and that limit gives them their value. People want a secure online currency, are willing to pay for it, and the relatively scarce (compared to traditional fiat currencies) crypto coins offer both attributes. The result, in recent years, has been a boom as investors have started looking seriously at the crypto sector.

Of course, any digital currency is going to need a range of services to be usable. Financial companies, to back it, and payment servers, to handle transactions, to name just two. Other companies and major business figures – Elon Musk comes readily to mind – will invest heavily in it. All of this creates a landscape in which investors can profit from crypto without ever buying an actual coin. They can buy into the companies that are poised to ride the cryptocurrency boom to higher profits.

How big is crypto? The market for it surpassed $2 trillion earlier this month, a number that’s hard to get your head around. So, as usual, we’ve turned to the TipRanks platform to help us make sense of the equity landscape as pertains to crypto. We’ve located three stocks – from different sectors – that according to some of the Street’s top analysts are all set to deliver crypto charged gains. Let’s dive in.

Silvergate Capital (SI)

We’ll start in the financial world, fitting when we’re discussing a new financial asset like crypto. Silvergate Capital is a commercial bank, chartered in California and providing financial services and infrastructure to customers in the digital currency industry. Silvergate has been in the finance industry for over 3 decades and has turned a profit every year for the last 21 years.

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Silvergate got into digital currency in 2013, with an active pursuit of digital currency customers. Today, the company has over 1,100 customers in this sector. In March of this year, Silvergate expanded its digital currency services, using a custody service to hold Bitcoin as collateral for US dollar commercial loans. The service offers large Bitcoin holders a way to access liquid capital without selling off the underlying cryptocurrency. Silvergate provides custody for the Bitcoin collateral through Coinbase and Fidelity Digital Assets.

In the recent financial release, for 1Q21, Silvergate reported EPS of 55 cents per share, beating the industry estimates by 14% and better yet, growing 139% year-over-year. Supporting the earnings growth, Silvergate recorded 29% customer base growth year-over-year. Digital currency deposits grew from $5 billion at the end of December to $6.8 billion at the end of March.

The company’s rapid growth can also be seen in the share value, which is up an astounding 582% in the past 12 months.

5-star analyst Joseph Vafi, of Canaccord Genuity, is impressed by Silvergate’s growth in digital currency banking, and writes, “Silvergate delivered again in Q1, highlighted by another near 40% sequential increase in deposits on top of the 130+ % q/q increase in Q4. This impressive deposit growth was driven by similarly strong growth in demand for use of the Silvergate Exchange Network (SEN) as institutional interest in bitcoin continues to accelerate. Just as important are the implications of the two strategic deals with Fidelity and Coinbase inked in Q1. In our view, it is becoming clear that not only is it emerging as a key financial services cog across all of institutional cryptocurrency trading, but SI is now becoming the key partner for cryptocurrency custodians seeking to offer margin lending. Importantly, Silvergate has a core competitive cost advantage in crypto margin lending, given its underlying bank charter which provides a very low cost of capital via raising zero interest customer deposits.”

Vafi, who is rated in the top 100 of Wall Streets analysts, puts a Buy on SI shares, and his $150 price target suggests the stock has room for 36% growth this year. (To watch Vafi’s track record, click here.)

Canaccord’s Vafi is no outlier in his bullish views. Silvergate has 5 recent reviews, and they include 4 Buys against a single Hold, for a Strong Buy consensus rating. The stock’s share price is $107.22, and the average price target of $158 implies a 45% upside – even more bullish than Vafi allows – for the coming year. (See Silvergate’s stock analysis at TipRanks.)

PayPal Holdings, Inc. (PYPL)

While Silvergate is hardly a household name, PayPal has become one. The company is the market leader in online payment processing, a booming industry in itself, and its top line revenue grew from $17.7 billion in 2019 to $21.4 billion in 2020. The company recorded sequential increases in revenue the second, third, and fourth quarters of last year, and saw Q4 EPS reach $1, up from 43 cents in the prior’s year’s first quarter.

That PayPal’s growth has come during the pandemic is unsurprising. We all know e-commerce boomed last year, benefitting from social lockdown policies, and e-commerce requires online payment processors. PayPal has a leading role in that industry, with over 377 million active accounts, conducting 4.4 billion payment transactions totaling $277 billion in payment volume.

In a major development for the company, PayPal announced in April that its mobile payment app, Venmo, will now offer users the ability to buy, sell, and hold four crypto currencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. According to one survey, some 30% of Venmo’s users already deal in crypto; this move makes their transactions more convenient, and opens an easy avenue to crypto for Venmo’s full 70-million-strong userbase.

BTIG analyst Mark Palmer, points out a key factor in PayPal’s new Venmo feature when he writes, “The move marked the first time that consumers will be able to use crypto to make purchases at a large array of merchants. The crypto option is now available in the U.S. with more than half of PYPL’s 29mm merchants, with the company stating that more would be added soon.”

Palmer believes that this move toward crypto will be a net positive for PayPal, and he backs that with a Buy rating and $345 price target implying a one-year upside of 31%. (To watch Palmer’s track record, click here.)

That Wall Street agrees with Palmer is obvious from the Strong Buy consensus rating on the stock, supported by new fewer than 29 recent Buy ratings. These outweigh the 4 Holds that have also been set here. PYPL shares are trading for $262.29, and their $310.68 average price target suggests the stock has room to grow 18% this year. (See PayPal’s stock analysis at TipRanks.)

CleanSpark (CLSK)

Last up, CleanSpark, is both a software company and a clean energy company. That makes more sense than at first would be apparent – CleanSpark’s software products are designed to control microgrid and distributed energy systems. These systems allow users to go off-grid, opting out of traditional power distribution to tap into cleaner green energy sources. CleanSpark provides the control software for these systems.

Earlier this year, CleanSpark made a couple of bold moves that made waves in its own industry, and in crypto. In March, the company put an offering of public shares on the market – more than 9 million common shares – at $22 each, raising more than $200 million before expenses. That alone got notice from investors.

In addition, the company started using the funds to buy up more Bitcoin mining rigs. These are the computer systems through which new bitcoins are generated. They draw massive amounts of power, put out a lot of heat – and CleanSpark has invested heavily, not only in the computational mining rigs, which will slowly produce new bitcoins, but in the clean energy infrastructure to make the company’s Atlanta mining location 95% carbon-free. The company’s latest investment in Bitcoin mining will start to take physical shape later this year.

And finally, in April, CleanSpark announced that it had secured contracts for an additional 22,680 Bitcoin miners. When all of the new rigs are installed, up and running, CleanSpark expects to increase its Bitcoin mining production to more than 3.2 EH/s. In the quarter ended March 31, CleanSpark produced 144 Bitcoins, and has produced a total of 205 Bitcoins since it began mining ops in December.

In all of this, CleanSpark has not lost sight of its original focus. The company also announced in April that it had secured a net $16.2 million increase in its microgrid contracts, a year-over-year increase of 220%.

In coverage of this stock for H.C. Wainwright, top analyst Amit Dayal writes, “We believe CleanSpark’s execution on the microgrid and Bitcoin mining fronts could position the company to exceed our expectations for FY2021, as our assumptions now appear relatively conservative. The stock has pulled back since its January 2021 highs alongside some other Bitcoin mining comps, and general weakness across small-cap names. However, we believe, with Bitcoin prices remaining well above our assumptions, no known changes to mining operations, and the company adding to its microgrid backlog, the operational side of the story appears to be intact. We believe CleanSpark’s valuation remains compelling at current levels with the company set for YoY revenue and earnings growth of more than 150% and more than 1,000%, respectively, in FY2022.”

In line with his upbeat outlook, Dayal gives CLSK shares a Buy rating with a $50 price target that indicates confidence in a robust 135% upside in the next 12 months. (To watch Dayal’s track record, click here.)

There are only two recent reviews on this stock – including Dayal’s – but both agree: this is one to Buy. CLSK shares are currently trading for $21.26 and the price target averages to $47.50, suggesting an upside of 123% this year. (See CleanSpark’s stock analysis at TipRanks.)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

eBay Looking Into Crypto Payment Option

Bloomberg

(Bloomberg) – It took decades for sustainable investing to become mainstream, but now every week one giant investor after another announces their commitment to ESG.Kenneth Dart will not be joining that club.The billionaire is heir to a plastic cup fortune. More than two decades ago he renounced his U.S. citizenship and moved to the Caribbean, becoming the biggest real estate owner in the Cayman Islands. For years he invested in distressed sovereign debt with Argentina’s former President Cristina Kirchner calling him a “vulture.”And over the past six months Dart, 66, has quietly accumulated one of the classic sin investments. Through a Cayman Islands vehicle called Spring Mountain Investments, Dart has built a 7% stake in British American Tobacco that’s now worth $6 billion. Last month, Spring Mountain disclosed a separate $634 million position in rival Imperial Brands. The Financial Times first reported the firm’s tobacco investments.A small portion of the positions were entered into using total return swaps, the filings show. These types of swaps were at the center of the March implosion of family office Archegos Capital Management, causing billions in bank losses.Tobacco WagerSpring Mountain is the latest in a series of entities the publicity-shy Dart has used to buy securities. He previously set up Portfolio Services Ltd., Seneca Investments, EM Ltd., Eastern Capital and LBS Investments. In recent years these have been used to invest in obscure biotechnology stocks that make up a fraction of his fortune, estimated at $6.6 billion by the Bloomberg Billionaires Index.Susanna de Saram, a representative of Dart’s firm Dart Enterprises, declined to comment on investment decisions.Dart’s tobacco wager goes against one of the hottest trends in finance: Investing in companies that focus on environmental, social and governance factors, which in theory means corporations have long-term sustainable prospects.The tobacco industry has for decades been the antithesis of ESG investment. Dominated by a few corporate behemoths, the companies operate in a market at risk of being quashed by regulation or customers giving up – or dying from – the habit.Michael Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP, has been a longtime champion of tobacco-control efforts.While a larger group of investors are shunning the stocks, it can create opportunities for those less concerned with the societal outcomes of their portfolio.Dividend YieldsTobacco stocks “were a one-way ticket up until around 2016” before concerns about new regulation, especially in the U.S., began discouraging investors, according to Bloomberg Intelligence analyst Duncan Fox.Over the past five years, the MSCI World Tobacco Index has dropped 32%. That’s punished long-term holders, but has juiced the dividends the stocks pay. British American Tobacco and Imperial Brands have dividend yields exceeding 8%.Investors may also be overstating the regulatory risks – after all the firms have experience adapting to and profiting under new regulations –and there’s potential growth in alternative tobacco products and the new cannabis markets, Fox said.Still, there’s a reason why so many investors shun the stocks.“Smoking has been in decline for the past five decades because of what we call the ESG Squeeze: pressures from societal attitudes, regulation, and taxation,” Citigroup Inc. analyst Adam Spielman wrote in March. In 10 to 20 years there could be no smokers left in many markets, according to Jefferies analyst Owen Bennett.Read more: Smoking may disappear within a generation, analysts predictDart has made successful contrarian bets in the past. He made billions from companies such as Salomon Inc., Federal Home Loan Mortgage Corp., and in troubled sovereign debt, according to a 1995 Businessweek profile.Trained as a chemical engineer, he’s long been focused on his investment portfolio instead of the family business, Dart Container, where he no longer has a role or ownership. Mason, Michigan-based Dart Container is run by his brother, Robert Dart.In recent years Dart’s focus seemed to shift from markets to property development, primarily in the Cayman Islands, where he’s made his home. Dart Real Estate has developed $1.5 billion in projects, including hotels, office buildings and residential complexes, according to its website.(Updates with total return swaps in fifth paragraph, Dart Enterprises’ response in seventh.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.