After an incredible run, the cryptocurrency market has plummeted in the past month. There were a number of catalysts for this meltdown, including a series of adverse tweets from Elon Musk and a new sequence of crackdowns on the Chinese crypto industry.
Currently, the price of Bitcoin has stabilized, trading in a range between $33,000 and $40,000. In the past few days, the digital currency has tested its latest resistance, indicating that the BTCUSD might be poised for a rebound.
With this in mind, let’s have a look at three U.S. listed companies that are exposed to the crypto markets and that would benefit from a rebound: Coinbase Global Inc. (COIN), Bit Digital (BTBT), and RIOT Blockchain (RIOT).
Coinbase Global Inc. (COIN):
Coinbase is the largest US cryptocurrency exchange, providing end-to-end financial infrastructure and technology. The company is focused on developing the crypto economy and provides its services to 43m retail users, 7,000 institutions and has 115,000 ecosystem partners in over 100 countries. COIN also provides to its users, solutions to build applications that leverage on crypto protocols and on crypto networks, enabling it to securely accept cryptocurrencies as a payment.
The crypto giant recently began publicly trading in mid-April 2021 and currently has a market cap of $48.4 billion.
In terms of financials, the company is expected to increase net sales five-fold year-on-year, from $1.2b in 2020 to $6.4b this year, amid massive investor interest in cryptocurrency markets. Besides, COIN is already profitable, with an anticipated net income of $2b in 2021 and a net margin of 32.6%, the company’s financials are healthy, providing an interesting entry point for investors betting on the rebound of Bitcoin.
Valuation wise, the company is still expensive at the current market price, with a 2021e P/E of 26.7x and a 2021e EV/EBITDA of 14.41x.
Bit Digital (BTBT):
BTBT is one of the world’s largest publicly traded bitcoin mining companies and operates most of its facilities in China. The company possesses over 45,000 miners with a maximum processing capacity of 2.6 EH/s and has mined 1,934 BTCUSD since its inception.
Year-to-date, Bit Digital stock has dropped 62.3% to $8.26 per share, underperforming the Bitcoin, which has risen 33%.
BTBT’s top line more than doubled quarter on quarter to $43.9 in the 1Q2021, compared to 12.47m in the 4Q2020. The company mined 1,013 BTCUSD in the Q1 2021 versus 696 BTC in the Q4 2020, representing a surge of 45% quarter on quarter.
In terms of net income, BTBT became profitable at the end of the Q4 2020 and managed to multiply by more than 16x its net income from $2.09m to $35.78m.
The company’s valuation metrics are slightly more attractive than COIN’s. With a 2021e P/E ratio of 10.46x and an EV/EBITDA of 11.09x, BTBT is positioned for a steeper upside than COIN, if the rebound in BTC materializes.
RIOT Blockchain Inc. (RIOT):
RIOT is a leading U.S.-based Bitcoin mining company, with a maximum processing capacity of 1.6 EH/s. The company owns and operates North America’s largest Bitcoin mining facility, in Rockdale, Texas, with 300MW in developed capacity and an attractive long-term power purchase agreement.
RIOT’s shares surge 101% to $34.20 year-to-date.
The company is massively investing to increase its mining capacity and plans to increase its hash rate to 2.51 EH/s by the end of June 2021, an increase of 55.9% over current capacity. Besides, RIOT is anticipating a total has rate capacity of 7.7 EH/s by the 4Q2022, making it one of the largest and most efficient Bitcoin mining fleet in the industry.
In terms of financials, analysts consensus forecast RIOT’s net sales to increase nearly 15x year-on-year to $173m. On the other hand, net income is anticipated to turn positive this year, with a figure of $72m versus a loss of $12.7 in 2020.
RIOT shares remain however expensive at current market price, with a 2021e PE of 46.3x and an EV/EBITDA of 17.2x.
Yet, given the company’s vigorous growth prospects, RIOT is positioned to outperform its peers and is well placed to benefit from the rebound in the BTCUSD.