After surging above $30,000, Bitcoin (BTC-USD) has been in a renewed correction mode. I believe that the correction is unlikely to be deep and the digital asset is poised for a strong 2024. In line with this view, the recent correction in Bitcoin is a good opportunity to look at some of the best crypto stocks to buy.
Coming back to the outlook for Bitcoin, I believe that the halving event is the single biggest catalyst for a rally. Further, interest rates have peaked, and any potential rate cut in 2024 is likely to trigger a big rally for risky asset classes.
There are already some optimistic targets for Bitcoin over the next 12 to 15 months. As an example, Standard Chartered expects Bitcoin to touch $120,000 by the end of 2024. In my view, even if Bitcoin trades above previous highs, the crypto stocks discussed can deliver multibagger returns.
Let’s discuss the reasons to be bullish.
Coinbase Global (COIN)
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Coinbase Global (NASDAQ:COIN) stock has remained sideways in the last 12 months. After a big correction, COIN stock seems to be in a consolidation phase. I would accumulate at current levels of $82 before a breakout on the upside.
An important point to note is that trading activity increases significantly in a cryptocurrency bull market. That’s likely to happen in 2024 if Bitcoin surges higher. This will translate into robust growth in trading income for Coinbase. In the downturn of the industry, Coinbase has been expanding its presence. In March, the company initiated an expansion drive in six continents. A bigger addressable market is likely to support revenue and EBITDA growth.
In an early indication of recovery, Coinbase generated positive adjusted EBITDA in Q2 2023. The company ended Q2 2023 with cash and equivalents of $5.5 billion. Through the downturn, Coinbase has maintained a robust liquidity buffer. This will support aggressive investment in expansion and platform innovation once industry sentiments improve.
Riot Platforms (RIOT)
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I believe that Riot Platforms (NASDAQ:RIOT) is among the best crypto stocks to buy for 100% returns. RIOT stock has declined from recent highs of $20.7 to current levels of $10.7. It’s likely that the stock will trade above year-to-date highs in the next 12 to 15 months.
In my view, Riot is possibly the best Bitcoin miner to consider. The first reason is strong fundamentals. As of Q2 2023, the company reported cash and digital assets of $510 million. Further, the company has a zero-debt balance sheet. With high financial flexibility, Riot is positioned to pursue aggressive expansion.
The company has big plans in terms of mining capacity expansion. As of Q2 2023, Riot reported a hash rate of 10.7EH/s. It’s expected that the hash rate will increase to 20.1EH/s by Q2 2024 and further to 35.4EH/s by 2025. This aggressive expansion will translate into robust revenue and cash flow upside if Bitcoin marches higher.
Marathon Digital (MARA)
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Marathon Digital (NASDAQ:MARA) is another Bitcoin mining stock that looks attractive at current levels of $9.8. It’s worth noting that even after a meaningful correction in the recent past, the short interest in the stock is high at 25.7% of the free float. I expect a massive short-squeeze rally once Bitcoin trends higher.
Specific to the business, Marathon has been investing aggressively in Bitcoin mining capacity expansion. As of Q2 2023, Marathon reported an average operational hash rate of 12.1EH/s, which was higher by 75% on a year-on-year basis. Further, the company’s installed hash rate has swelled to 21.8EH/s. Beyond the quarter, the company has reached its initial target of 23EH/s capacity.
Marathon is positioned to further invest in capacity expansion through its joint venture in Abu Dhabi. Therefore, the outlook for revenue and EBITDA growth is positive in a Bitcoin rally scenario. If the digital asset trades at all-time highs in 2024, MARA stock will be poised for multibagger returns.
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.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.