After a massive rally, Bitcoin (BTC-USD) seems to be in a consolidation zone. With halving due this month, expect another big breakout on the upside that might take Bitcoin past the six-figure mark. Direct exposure to Bitcoin and quality altcoins can deliver multibagger returns in the current bull market. At the same time, investors can consider proxy exposure to the crypto world through selected stocks.
Besides the halving event, 2024 presents another catalyst for cryptocurrencies. It’s likely that easy money policies (rate cuts) will be pursued in the second half of the year. Expansionary policies are good for risky asset classes, so expect flow of funds into equities, commodities, and crypto currencies.
Therefore, quick money-making opportunity may avail. The stocks to buy after the Bitcoin halving are likely to return 50% to 100% before year’s end. Let’s explore specific factors to be bullish on these three.
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) is a quality Bitcoin miner that’s worth considering at current levels of $10.2. The stock can potentially double in the next few quarters if cryptocurrency sentiments remain positive.
The first point to note about Riot Platforms is strong fundamentals. As of December 2023, the company reported a cash buffer of $597 million. Further, the value of Bitcoin holdings was $311 million. With a zero-debt balance sheet, Riot Platforms has high financial flexibility for aggressive expansion.
As of March, RIOT has a deployed hash rate of 12.4EH/s. The company plans to increase hash rate to 31.5EH/s by the end of the year. Further, by the end of 2025, capacity is likely at 40.8EH/s.
If this target is achieved, Riot is positioned for stellar growth in revenue and cash flows.Also, the long-term target is to achieve hash rate capacity of 100EH/s. Therefore, the company is still at an early-growth stage.
Coinbase Global (COIN)
After a big rally, Coinbase (NASDAQ:COIN) has corrected from recent highs of $283. While it looks expensive, a strong case for robust revenue growth and free cash flow upside persists.
As Bitcoin trends higher, it’s likely that trading volumes will surge. Further, as more altcoins join the party, Coinbase, among the largest centralized exchanges, is well positioned to gain from trading and speculative activity.
Another point to note is that Coinbase has been working on global expansion. In the first three quarters of 2023, the company obtained license in Singapore and Bermuda. Further, operations were launched in Canada and Brazil.
In Q4 2023, the company received Virtual Asset Service Provider (VASP) registrations in France and Spain. With entry into multiple new geographies, it’s likely that revenue growth will be stellar in the coming quarters. With high financial flexibility, the scope for aggressive organic growth continues.
Marathon Digital (MARA)
Marathon Digital (NASDAQ:MARA) is another undervalued Bitcoin miner to buy before the halving event. In the last 12 months, MARA has trended higher by 117%. However, considering the expansion plans and the potential upside in Bitcoin, expect at least another 100% returns before the end of 2024.
Specifically, Marathon Digital reported energized hash rate of 24.7EH/s as of Q4 2023. By the end of this year, the company expects to increase capacity to 35EH/s and further to 50EH/s by the end of 2025. This positions MARA for healthy growth in revenue and cash flows. For 2024, Marathon Digital has guided for 50% growth in revenue. This is likely to be associated with significant EBITDA margin expansion.
Notably, as of February, the company had a cash buffer of $425.6 million. Further, Marathon Digital reported Bitcoin holding value of $1 billion. This provides ample flexibility for expansion activities in the next 24 months.
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.
