SI: 3 Cryptocurrency Stocks to Consider if You Think Bitcoin Will Continue to Soar

2020 has been a great year for Bitcoin and other cryptocurrencies. Institutional investors are believed to have pushed the price of Bitcoin to more than $29, 000 on December 31 from $7,200 last January. By middle of this month, the price of Bitcoin was more than $34,000. Earlier this month, it touched $40,000 for the first time.

The euphoria surrounding Bitcoin in 2020 is expected to continue this year. The participation of the institutional investors has highlighted the growth potential of the digital currency. Many investors also perceive Bitcoin as a hedge against inflation. PayPal’s (PYPL) decision to allow the use of cryptocurrencies by its clientele globally has also been a major driving factor for the asset class.

Experts do not rule out a short-term a correction in Bitcoin’s price, but they predict a significant rise over the long run. Indeed, analysts from JPMorgan characterized Bitcoin as “digital gold” and believe that the cryptocurrency could touch $146,000 in the long run.

Against this backdrop, investors and players involved in cryptocurrency mining and sales will be the major beneficiaries. We think Silvergate Capital Corporation (SI - Get Rating), Riot Blockchain Inc. (RIOT - Get Rating), and HIVE Blockchain Technologies (HVBTF - Get Rating) are three such companies.

Silvergate Capital Corporation (SI - Get Rating)

SI is a unique bank that offers innovative infrastructure solutions in the crypto currency space. It also provides cutting-edge automation and cash management solutions to organizations dealing in digital currency. Through its Silvergate Exchange Network, SI also focuses on regulatory compliance for digital currency exchange.

SI recently completed a public offering of 4,563,493 shares of Class A common stock at $63.00 per share.

At the close of the quarter ended December 31, 2020, Silvergate Exchange Network (SEN) handled 90,763 transactions, representing a 530% year-over-year increase. Its U.S. dollar transfers surged 516% over the year to $59.2 billion. Its EPS for the quarter climbed to $0.47 from $0.19 posted in the prior year period. And its digital currency customers for the quarter also grew 20% year-over-year to 969.

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The Street estimates SI’s revenue for the quarter ending March 31, 2021 to be $29.8 million, representing a 46% increase year-over-year. Meanwhile, its EPS is likely to increase 95.7% to $0.45.

SI has gained 481.6% over the past year to close yesterday’s trading session at $81.27. The stock has climbed 542.7% during the past six months.

Riot Blockchain Inc. (RIOT - Get Rating)

RIOT specializes in Bitcoin mining as well as supporting and handling an entire Blockchain technologies ecosystem. The company also provides auditing and accounting services for blockchain based assets.

Last week received and deployed 2,500 Bitmain S19 Pro Antminers as part of a purchase agreement disclosed in October 2020. Once the S19 Pro Antminers are fully deployed, RIOT will have a total of 9,540 Antminers in operation with a hash rate capacity reaching an estimated 842 petahash.

During the third quarter ended September 30, 2020, RIOT’s revenue climbed 42% year-over-year to $2.4 million, driven by Bitcoin’s rally during the period. Its revenue also surged on account of higher hash power. The company mined a total of 222 BTC during the third quarter, up 41% year-over-year.

Analysts expect RIOT’s revenue for the full year ended 2021 to grow 412.5% year-over-year to $10.4 million. Meanwhile, its EPS for the quarter is likely to expand at the rate of 20% per annum over the next five years.

RIOT ended yesterday’s trading session at $17.93, soaring 1433.33% over the past year. During the past six months, the stock surged 770.3%.

HIVE Blockchain Technologies Ltd. (HVBTF - Get Rating)

HVBTF is involved in cryptocurrency mining and the selling of digital currencies such as Ethereum, Ethereum Classic, and Bitcoin across Canada, Sweden, and Iceland.

During the second quarter ended September 30, 2020, HVBTF’s revenue from digital currency rose 8% year-over-year to $13 million. Its cash flow at the end of the quarter rose to a record $10.6 million from $4.6 million posted a year ago. Its EPS for the quarter was $0.03 compared to loss per share of $0.04 posted in the same period last year.

HVBTF locked in 50% of its energy costs for calendar 2021 at 1.6 cents per kilowatt hour in Sweden.

HVBTF recently upgraded its hardware inventory. It announced that it has exceeded its ASIC capacity goal of 1,000 petahash per second (PH/s) through the purchase of 6,400 Canaan AvalonMiner 1246 next-generation miners. Canaan plans to deliver 500 miners in May and June, with more than 900 additional miners delivered each month for the rest of 2021.

HVBTF ended yesterday’s trading session at $1.79, rallying 1966.5% over the past year. During the past six months, the stock surged 601.6%.

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SI shares were trading at $82.16 per share on Thursday afternoon, up $0.89 (+1.10%). Year-to-date, SI has gained 10.56%, versus a 2.12% rise in the benchmark S&P 500 index during the same period.

About the Author: Namrata Sen Chanda

Namrata is an accomplished financial journalist, with nearly a decade of experience. She specializes in interpreting news releases and framing investment strategies, and has worked with some of the leading companies in real estate, banking, insurance, mutual funds, financial research, fintech, and investment education. More...