Digital currencies have gained significant prominence and popularity over the past few years. And after China pulled the plug on the Chinese crypto market by banning Bitcoin—the largest cryptocurrency—the United States has become the new mining capital, with a 35% share of the global hashrate, which is the collective computational power of miners.
Recently, many cryptocurrencies have been soaring. Bitcoin nearly hit the $67,000 mark, closing with a 28% monthly gain in October. The social media-driven puppy crypto, Shiba Inu, rose 777% in the 30 days ending October 29. Given these stellar rallies, miners have been stockpiling bitcoin, driving price predictions toward the $100,000 mark and setting crypto up for further gains.
Given this setting, we think cryptocurrency stocks of Marathon Digital Holdings, Inc. (MARA), Bakkt Holdings, Inc. (BKKT), and Bit Digital, Inc. (BTBT), which gained significantly over the past month, could be good additions to one’s watchlist.
Marathon Digital Holdings, Inc. (MARA)
MARA is a digital asset technology company that is focused primarily on mining cryptocurrencies on the blockchain ecosystem and operates as a digital asset generator in the United States. MARA is based in Las Vegas.
On September 9, MARA announced that Canadian blockchain and cryptocurrency technology company DMG Blockchain Solutions Inc. (DMGGF) would join MaraPool, MARA’s bitcoin mining pool. The partnership is expected to cater to the needs of North American miners and enhance the mining experience.
On September 1, the company declared its collaboration with financial services and technology firm New York Digital Investment Group LLC (NYDIG) to provide members of MaraPool with NYDIG’s institutional-grade services. The collaboration might benefit MARA by providing MaraPool miners with world-class solutions and valuable expertise.
For its second fiscal quarter, ended June 30, MARA’s total revenues increased 10,146.6% year-over-year to $29.32 million. Its non-GAAP income from operations came in at $20.06 million, registering a substantial increase from its negative year-ago value.
A $0.74 consensus EPS estimate for the current quarter (ending December 2021) indicates a 1,025% year-over-year increase. Likewise, the $119.07 million consensus revenue estimate for the current quarter reflects a 4,403.4% improvement from the prior-year quarter.
The stock has gained 2,812.6% in price over the past year to close yesterday’s trading session at $64.66. It gained 65.42% in October. The stock is currently trading above its 50-day and 200-day moving averages of $42.71 and $33.31, respectively.
Bakkt Holdings, Inc. (BKKT)
Atlanta, Ga.-based BKKT is a subsidiary of Intercontinental Exchange Holdings, Inc., operating as a digital asset platform that enables consumers to buy, sell, spend, and redeem digital assets.
The company debuted on the New York Stock Exchange after a reverse merger with Special Purpose Acquisition Company (SPAC), VPC Impact Acquisition Holdings, on October 18, 2021. The transaction generated aggregate gross proceeds of approximately $448 million, which was earmarked for financing its operational capabilities and marketing efforts.
On October 25, financial technology services company Fiserv, Inc. (FISV) announced a strategic relationship with BKKT to enable practical uses of crypto and the emergence of asset classes. Regarding the partnership, Sheela Zemlin, Chief Revenue Officer at BKKT, said, “This partnership with Fiserv marks an important moment as we together create opportunities for consumers to seamlessly and at their own pace introduce digital assets into their daily habits.”
Also in October, Mastercard Incorporated (MA) and BKKT announced a multi-faceted partnership to make it easier for financial organizations to offer cryptocurrency services. The new offerings are expected to cater to the growing crypto popularity among younger consumers and to increase the flexibility in payments.
BKKT’s pro-forma combined revenue came in at $16.60 million in the six months ended June 30.
BKKT’s stock has gained 247.9% in price since it went public on October 18, to close yesterday’s trading session at $35.07. It is currently trading above its 50-day moving average of $22.28.
Bit Digital, Inc. (BTBT)
BTBT is a Flushing, N.Y.-based bitcoin mining business that provides a publicly-traded vehicle for investors to earn a return of capital related to the company’s primary source revenue, bitcoin. The company’s operating mining fleet is spread over the United States and Canada.
On October 12, BTBT signed an agreement with Bitmain Technologies Limited for the purchase of 10,000 bitcoin miners. The agreement is expected to increase its digital miner fleet hashrate, or computational power, and diversify its access to miners.
In September, the company entered into a strategic co-mining agreement with crypto mining facility operating company Blockfusion USA, Inc, providing BTBT with Blockfusion’s certain premises and services for two years. The agreement is expected to increase BTBT’s hashrate significantly. The agreement also gives BTBT the right of first refusal (ROFR) to match any third-party offer for Blockfusion assets and securities and receive a refund in the event of any other such strategic partnership.
For its second fiscal quarter, ended June 30, BTBT’s revenue from cryptocurrency mining climbed 4,102.2% year-over-year to $28.34 million. Its income from operations stood at $10.77 million, up substantially from its negative year-ago value. The Street expects its EPS to come in at $0.24 in the current quarter (ending December 2021).
The stock has gained 205.9% in price over the past year to close yesterday’s trading session at $11.93. It gained 97.1% in October. BTBT is currently trading above its 50-day and 200-day moving averages of $10.22 and $9.84, respectively.
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MARA shares were trading at $64.12 per share on Thursday morning, down $0.54 (-0.84%). Year-to-date, MARA has gained 514.18%, versus a 26.07% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...
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