Forget Ripple (XRP): Buy These 2 Top Crypto Stocks Instead

Instead of directly betting on cryptocurrencies like Ripple, you could invest in these cryptocurrency stocks.

| More on:
crypto, chart, stocks

Image source: Getty Images

Ripple (CRYPTO:XRP) is continuing to trade on a negative note lately. After the U.S. Securities and Exchange Commission filed a legal complaint against the California-based Ripple Labs on December 22, the value of XRP has dived nearly 40% against the U.S. dollar within a month. While the digital token has seen a recovery since then, its future trends remain uncertain, as the ongoing legal battle could keep it extremely volatile.

Forget Ripple: Buy these crypto stocks instead

While directly investing in cryptocurrencies like Ripple might expose you to several risks, you may find it relatively less risky and more convenient to invest in crypto stocks instead. This way, you could avoid big risks to your investment portfolio and still benefit from the heating-up cryptocurrency market. Let’s take a closer look at two such cryptocurrency stocks in Canada that could help you get high returns in the long run.

Bitfarms stock

Bitfarms (TSXV:BITF)(NASDAQ:BITF) is a Toronto-based cryptocurrency miner with a market cap of about $867 million. Its TSX Venture Exchange-listed stock has seen a steep drop in 2022 so far after posting 155% gains in 2021 and solid 400% gains in 2020. Its stock currently trades at $4.39 per share with about 31.2% year-to-date losses.

In Q3 2021, Bitfarms reported a 38% sequential increase in its Bitcoin production to 1,051 BTC compared to 759 BTC in the previous quarter. During the quarter, its average BTC production cost also fell by 23% sequentially to US$6,900 per BTC. As a result, the company’s adjusted net earnings rose to US$0.22 per share in Q3 from US$0.07 per share in the previous quarter, beating analysts’ estimates of US$0.20 per share.

To accumulate more low-cost Bitcoin, Bitfarms purchased 1,000 BTC in the first week of January for about US$43.2 million. An expected recovery in Bitcoin prices could prove this investment highly profitable for the company and drive this Canadian crypto stock higher.

Hut 8 Mining stock

Hut 8 Mining (TSX:HUT)(NASDAQ:HUT) could be another great Canadian stock for investors who are looking for exposure to the cryptocurrency market. It’s one of the largest cryptocurrency miners in North America, with a market cap of nearly $1.3 billion. After posting 828% gains in 2019 and 2020 combined, HUT stock has lost nearly 24% of its value in 2022 so far.

Hut 8’s 2021 total revenue is expected to jump to US$178.5 million — four times compared to $40.7 million in the previous year. Its self-mined Bitcoin reserve continues to swell with the help of its consistently increasing Bitcoin production. Given that, its 2021 earnings are expected to grow by six times from 2020 to about $0.36 per share.

To expand its infrastructure further, Hut 8 Mining recently acquired the cloud and colocation data centre business from TeraGo. Last month, Hut 8 mined 308 Bitcoin at an average production rate of 9.93 Bitcoin per day. After adding these Bitcoin to its reserves, the company held 5,826 Bitcoin as of January 31. These growth factors make this crypto stock worth considering right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool owns and recommends Bitcoin. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Investing

A data center engineer works on a laptop at a server farm.
Tech Stocks

3 No-Brainer Data Centre Stocks to Buy With $500 Right Now

Data centres are going to be a huge growth opportunity in the next decade. And these are the top buys.

Read more »

Paper Canadian currency of various denominations
Bank Stocks

1 Magnificent Canadian Dividend Stock Down 28% to Buy and Hold for Decades

This top Canadian dividend stock is underperforming its large peers this year, but a turnaround could be on the horizon.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

hand stacks coins
Investing

Secure a Wealthy Future With These 3 Canadian Stocks

These Canadian stocks have the potential to appreciate substantially over time and may also enhance returns through dividend payments.

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

analyze data
Investing

3 Blue-Chip Stocks Every Canadian Should Own

These blue-chip stocks are backed by large-cap companies with well-established businesses, solid fundamentals, and a growing earnings base.

Read more »

dividends grow over time
Stocks for Beginners

The Smartest Growth Stock to Buy With $2,000 Right Now

Do you have $2,000 to invest for the long term? These three TSX stocks have and will continue to deliver…

Read more »