After suffering from fund outflows and other technical challenges, the crypto sector appears ready to bounce back, potentially boding well for blockchain stocks to buy. Recently, the space received good news that could support its recovery efforts.
On Friday, Federal Reserve Chair Jerome Powell stated that a new inflation report is “along the lines of what we want to see.” While Powell believes the path to addressing the inflation problem is a challenge, it’s heading toward the central bank’s goal of 2%. Significantly, this statement implies that Fed probably won’t consider any rate increases, which could hurt crypto sentiment.
Still, buying virtual currencies directly is risky business. Instead, some investors may want to mitigate some of the unique dangers by going the indirect route. For those folks, we have the blockchain stocks to buy below.
Coinbase (COIN)
As a crypto wallet and exchange service, Coinbase (NASDAQ:COIN) is one of the top blockchain stocks to buy. It’s not exactly a pure-play blockchain enterprise. However, it provided a way for millions of investors to participate in this still rather opaque arena. So, even with the legal and regulatory headaches, COIN stock should be on your radar due to its underlying importance.
Now, the one thing you need to be aware of is that the investment narrative aligns with crypto speculation. If you were looking at just the financial print without any context, you’d probably run for the hills screaming. For example, in the fourth quarter of 2022, Coinbase posted a loss of $2.46 per share. While better than the expected loss of $2.52, this is not a great performance.
However, fast forward one year and you have a different paradigm. In Q4 2023, Coinbase delivered EPS of $1.04 against an expected print of two cents. So long as the crypto market continues to shine, COIN stock might continue proving doubters wrong.
Robinhood (HOOD)
Technically speaking, Robinhood (NASDAQ:HOOD) also isn’t a pure-play candidate for blockchain stocks to buy. Nevertheless, as crypto sentiment rises, HOOD stock could easily swing higher. That’s because like Coinbase, Robinhood – a financial services firm – opens access to virtual currencies for curious retail investors. In addition, its gamified platform has been a hit among its predominantly young users.
Further, the combination of interest in hot stocks and decentralized assets has contributed to a remarkable strong earnings performance. For example, in Q2 and Q4 last year, Robinhood delivered the same result: EPS of 3 cents against an expected loss of 1 cent. Overall, in the past four quarters, the average positive earnings surprise clocked in at 204.15%.
For fiscal 2024, analysts anticipate EPS of 27 cents on revenue of $2.19 billion. That’s a marked improvement over last year’s stats of a loss of 61 cents on sales of $1.86 billion.
If cryptos keep marching higher, HOOD stock stands poised to ride coattails. Thus, it’s worth considering for speculators.
CleanSpark (CLSK)
Finally, we’ve got to talk about CleanSpark (NASDAQ:CLSK), the one pure-play idea on this list of blockchain stocks to buy. According to its public profile, CleanSpark is a crypto miner. But unlike any run-of-the-mill miner, it owns and operates data centers that primarily run on low-carbon power. Notably, it focuses on the benchmark digital asset, which is known for being incredibly energy intensive.
Theoretically, then, with a cheaper mechanism to mine said asset at a lower imposed cost to the environment, CleanSpark could potentially change the name of the game. Still, it’s an incredibly speculative wager. Financially, sometimes it hits and sometimes it misses – and badly so. For example, in Q3 last year, the company posted a loss of 63 cents against an expected red ink of 13 cents per share.
Still, if you want to chalk this volatile print to growing pains, then consider the fiscal 2024 forecast. Analysts are calling for EPS of 75 cents on revenue of $432.67 million. These numbers will depend heavily on where crypto goes.
Nevertheless, it’s a serious improvement over last year’s loss of $1.33 on sales of $168.41 million.
On the date of publication, Josh Enomoto did not have (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.