Today we introduce three of the best crypto stocks to buy in the second half of 2024. Wall Street has noted that cryptocurrency shares are capitalizing on the growing acceptance of digital currencies and attracting investors seeking diversification and growth. A number of companies are emerging as standout choices. They provide essential services for the cryptoeconomy while demonstrating strong financial performance and growth initiatives.
Since January, the S&P Bitcoin Index has already yielded nearly 65%. Spot Bitcoin (BTC-USD) exchange-traded funds (ETFs) have witnessed record inflows amid rising demand for cryptocurrency-focused investments. Meanwhile, Standard Chartered (OTCMKTS:SCBBF) revised its year-end and 2025 price projection in March, anticipating Bitcoin’s potential surge to $150,000, driven by “sticky” institutional flows. As digital currencies led by Bitcoin gain traction, here are three of the best crypto stocks positioned to deliver lucrative returns.
CME Group (CME)
We begin our exploration of the best crypto stocks with CME Group (NASDAQ:CME), the world’s largest futures exchange. CME operates major derivatives, options and futures exchanges in Chicago and New York City, along with online trading platforms. The company boasts a wide-moat business model and benefits from volatility-driven revenue growth.
In late April, CME reported strong first quarter fiscal 2024 results. Revenue hit $1.5 billion, up 3% year-over-year (YOY), driven in part by robust demand for its risk management products. Crypto average daily volume (ADV) hit a record 82,000 contracts, a 70% increase from the previous quarter. Adjusted earnings rose 3% YOY to $2.35 per diluted share.
CME is known for returning free cash flow (FCF) to shareholders via special dividends. Since 2012, it has returned approximately $24.8 billion, including $2.3 billion in dividends paid in the first quarter alone. Looking ahead, management forecasts a 4% average annual earnings per share (EPS) growth through 2026. Meanwhile, CME plans to launch Bitcoin trading in Switzerland to capitalize on the growing demand for crypto investments, according to a Financial Times report.
Year-to-date (YTD), CME stock is down 5% but offers a 2.3% dividend yield. Shares are trading at 20.7 times forward earnings and 22.63 times sales. Analysts have set a 12-month price target of $226, implying an upside potential of 13% from current levels.
Coinbase Global (COIN)
Next on our list of best crypto stocks is crypto exchange Coinbase Global (NASDAQ:COIN). In 2021, Coinbase became the first pure-play crypto trading platform to go public on Wall Street. With a 7% market share of worldwide centralized exchange trading volume, the company provides financial infrastructure and technology for the cryptoeconomy.
In the first quarter of 2024, Coinbase showcased stellar performance. Revenue surged 122% YOY to $1.6 billion, driven by increased crypto asset volatility and prices. Transaction revenue rose to $1.1 billion, accounting for nearly 66% of total revenue. EPS soared to $4.40, compared to a loss of 34 cents per diluted share a year ago. The platform also recorded all-time highs in trading volume and attracted a surge of institutional investors.
Coinbase’s strategic expansion into international markets is pivotal for sustaining its growth trajectory. In the first quarter, international revenue rose to 17% of the total, driven by enhanced banking connections and localized strategies. In April 2024, Coinbase achieved a significant milestone by becoming the largest registered cryptocurrency exchange in Canada as a “Restricted Dealer.”
COIN stock has surged by 60% since January. Shares are trading at 34.5 times forward earnings and 49.4 times trailing sales. Analysts project the stock to stay close to its current price of $250 per share.
Marathon Digital Holdings (MARA)
We conclude our discussion of cryptocurrency stocks with Marathon Digital (NASDAQ:MARA). Specializing in digital asset technology, the company focuses on cryptocurrency mining and the blockchain ecosystem.
MARA’s latest quarterly earnings were remarkable, with revenues reaching $165 million, a staggering 223% YOY increase. Net income also surged by 184% YOY to $337 million, driven by favorable Bitcoin prices. Notably, these results were reported before the April Bitcoin halving event.
In May, MARA bolstered its block wins by 32%, producing 616 Bitcoins despite a slight 27% decline post-halving. This performance underscores the company’s commitment to expanding mining operations and seizing cryptocurrency demand, solidifying its industry position.
Additionally, MARA aims to expand its computing power by 2024, utilizing recent acquisitions and ample liquidity, as it transitions into a global technology company with a focus on sustainability. Management is also keen on expanding Marathon Digital’s global presence, targeting 50% of revenues to come from overseas by 2028. With $1.6 billion in liquidity (cash plus crypto), MARA looks well-positioned to swiftly scale up and achieve its growth objectives.
Despite robust financials, MARA stock has slid almost 14% since January. Shares are changing hands at 37.8 times forward earnings and 8.5 times trailing sales. Finally, analysts’ 12-month price target of $23.50 indicates a potential upside of 20% from current levels.
On the date of publication, Tezcan Gecgil 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.
