tiprankstipranks
Here Are Three Stocks Likely to Survive the Crypto Carnage
Stock Analysis & Ideas

Here Are Three Stocks Likely to Survive the Crypto Carnage

Story Highlights

Cryptocurrencies are witnessing unprecedented meltdowns that are also affecting companies dealing in cryptos. In this volatile scenario, are there any crypto stocks still worth a Buy? Let us look at what Wall Street analysts are saying about three such stocks.

The cryptocurrency markets have seen a bloodbath recently as cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have seen unprecedented drawdowns. While Bitcoin has more than halved in value by 53% this year and is currently hovering around the $22,000 mark, Ethereum has tanked by 67.6% and is currently near the $1,200 mark.

This carnage in the cryptocurrency markets has deeply affected companies dealing in crypto. Earlier this week, crypto lender Celsius ordered a redemption freeze on all withdrawals, swaps, and transfers between accounts, citing extreme market conditions. Binance, the crypto trading platform, also temporarily stopped bitcoin withdrawals for several hours, citing a stuck transaction causing a backlog.

As a result of this bloodbath, Coinbase (NASDAQ: COIN), a cryptocurrency exchange platform, has reduced its workforce by around 18%.

In this scenario, are there any crypto stocks still worth investing in? Using the TipRanks database, we looked at three crypto stocks that are still worth a Buy.

Marathon Digital Holdings (NASDAQ: MARA)

The bloodbath in the crypto markets has meant that the cryptocurrency mining company Marathon Digital has seen its shares crater by 79.1% this year. Currently, shares of MARA are hovering near a 52-week low with a closing price of $6.87 as of June 15.

Last week, Marathon Digital gave its production and miner installation updates for the month of May. Fred Thiel, Marathon’s chairman, and CEO stated that its bitcoin production in May was adversely impacted due to “energization delays in Texas, coupled with ongoing maintenance issues at the power generating station in Hardin, MT [Montana].”

MARA produced 268 “self-mined bitcoin” in May, and overall potential bitcoin production declined by 47% during May due to the above-mentioned problems.

The crypto market meltdown has resulted in BTIG analyst Gregory Lewis lowering the price target by more than half to $16 from $50 earlier while keeping a Buy rating on MARA. Lewis’s price target is the lowest on the Street. The analyst’s price target implies an upside potential of 132.9% at current levels.

The analyst is of the view that bitcoin mining stocks have slumped as cryptocurrencies have dropped, despite bitcoin mining gross margins staying around 65%.

Lewis continues to expect crypto mining stocks to trade in tandem with the price of bitcoin and thinks that crypto mining stocks will continue to underperform due to concerns around growth in funding.

Even in this volatile crypto scenario, analysts continue to be bullish about the stock with a Strong Buy consensus rating based on a unanimous five buys. The average MARA price target is $28, which implies a 307.6% upside potential to current levels.

Silvergate Capital (NYSE: SI)

Silvergate Capital is the parent company of Silvergate Bank, which is headquartered in San Diego and is a “California state-chartered bank.” Silvergate Bank provides financial infrastructure services and solutions to participants in the digital currency industry.

Shares of SI have tanked 56.7% this year as investors have been concerned about the company, which provides loans to institutional clients with bitcoin as collateral through its core lending product, SEN leverage.

However, for Wells Fargo analyst Jared Shaw, SI is still a Buy as he cited the rise in digital currency customers to 1,503 at the end of Q1 versus 1,381 at the end of Q4. Shaw also pointed out that Silvergate Capital’s average digital currency customer deposits increased to $14.7 billion during Q1 versus $13.3 billion during Q4.

Moreover, Shaw is of the view that “much of the bear-case is priced in at current level” and the stock has the potential to achieve the analyst’s price target of $120 from the current level. The analyst’s price target implies an upside potential of 86.1% at current levels.

Rest of the analysts on the Street echo Shaw and continue to be upbeat about the stock with a Strong Buy consensus rating based on eight buys and one Hold. The average SI price target is $175.89, which implies a 172.8% upside potential to current levels.

Riot Blockchain (NASDAQ: RIOT)

Riot Blockchain is a cryptocurrency mining and digital infrastructure company. Shares of RIOT have fallen sharply this year by 78.6% from its 52-week high of $46.28 and the stock is currently hovering near its 52-week low with a closing price of $4.86 on June 15.

This meltdown in the stock comes even as RIOT produced 466 BTC, up by 104% year-over-year in May.

However, Roth Capital analyst Darren Aftahi pointed out that RIOT’s hash rate capacity of 4.6 exahash per second (EH/s) in May, was down 2.1% month-over-month “due to temporarily decommissioning older model machines as they are refurbished and prepped for potential immersion installation.”

Hash rate capacity is a measure of how quickly a crypto miner’s machine processes transactions.

But the analyst remains bullish on RIOT’s growth “in the latter half of the year as the bulk of RIOT’s machine orders this year are scheduled for delivery throughout 2H22.”

Aftahi has a Buy rating and a Street high price target of $36 on the stock, which is almost nine times RIOT’s current stock price. The analyst’s price target implies an upside potential of 640.7% at current levels.

Other analysts on Wall Street echo Shaw and continue to be optimistic about RIOT with a Strong Buy consensus rating based on a unanimous four buys. The average RIOT price target is $25, which implies a 414.4% upside potential to current levels.

Bottom Line

From this list, it is evident that these three cryptocurrency stocks could very well withstand the crypto meltdown.

Read full Disclosure

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles