After taking a major downturn in the summer, cryptocurrencies have been bouncing back in a big way throughout October and proving that investors still have an appetite for these high-flying and volatile digital assets. With dozens of firms filing for SEC approval of bitcoin-based ETFs and Federal Reserve chair Jerome Powell stating that he has no plans to ban bitcoin in the United States, there are clearly some strong catalysts that could be helping to fuel the crypto comeback.
Some investors prefer to gain exposure to this burgeoning investment class through equities, and there are plenty of stocks to choose from if you are looking to go that route. Whether it's crypto mining specialists, massive exchanges making it easy for crypto enthusiasts to trade, or banks helping out institutional investors with their crypto transactions, these companies certainly have some intriguing business cases for investors to consider at this time.
Let's take a look at 3 cryptocurrency comeback stocks to buy now.
Hut 8 Mining Corp (NASDAQ: HUT)
If you're interested in an up-and-coming digital currency mining company, Hut 8 Mining fits the bill. The Toronto-based company is one of North America's largest digital asset miners and the number-one holder of self-minted bitcoin on the continent. If you aren't familiar with bitcoin mining, it involves using high-powered computing equipment to solve computational puzzles. The process creates new bitcoins and is a critical step for maintaining the ledger of transactions or blockchain.
Hut 8 Mining owned 3,824 BTC as of Q2, which means investors can gain direct exposure to the largest crypto by market capitalization without having to figure out how to set up a digital wallet and safely store their cryptocurrency. The company is also intriguing given its mining rig locations in Alberta, Canada, where it can use wind and natural gas to mine cryptocurrencies in a more environmentally sustainable way. Hut 8 Reported its second consecutive quarterly record revenue in Q2 of $33.25 million CAD, up 264.6% year-over-year, and is certainly a crypto stock to watch if the rally in digital currencies can continue.
Coinbase Global (NASDAQ: COIN)
This company has made buying and selling cryptocurrencies easy for retail investors, which in turn helped it become the leading cryptocurrency exchange in the United States. Coinbase generates the majority of its revenue from transaction fees that are charged as a percentage of a trade's total value, which means that the company's upcoming Q3 earnings report in November should be strong given how active crypto markets have been lately. The company is also trying to diversify its revenue streams with new business offerings like crypto debit cards, data analytics services, crypto collateralized loans, and more, which is another good reason to consider adding shares.
After making its public debut back in April of this year, Coinbase stock has been a major underperformer, which is a bit strange when you consider how strong cryptos have been for the majority of the year. With that said, the stock has been consolidating for months and just reclaimed all of the major moving averages, which could be a sign that it's finally ready to start rallying. All-time high trading volume in Q2 of $462 billion, up 38% sequentially, and Q2 year-over-year revenue growth of 1,040% to $2.03 billion are further signs that this is a crypto monster stock in the making.
Silvergate Capital (NYSE:SI)
Institutional investors are quickly getting on board the cryptocurrency train, which is a big reason why Silvergate Capital should be on your radar. It's a holding company for Silvergate Bank, a provider of financial infrastructure solutions and services to participants in the digital currency industry. The company's Silvergate Exchange Network enables USD transfers between cryptocurrency exchanges and institutional investors 24/7, 365 days a year, which is a service that is extremely valuable since cryptocurrency markets are open all day every day.
Morgan Stanley recently initiated Silvergate Capital stock with an "overweight" rating and the stock is up more than 47% over the last month, yet there could be even more upside going forward if the crypto rally continues to pick up steam. It's also worth noting that the company's business model allows Silvergate to grow its non-interest-bearing deposits thanks to its innovative exchange network, and in turn use those funds to make interest on loans or invest in securities. Silvergate will announce its Q3 earnings next Tuesday, so make sure to check out how the company performed in the quarter if you are interested in this crypto comeback stock.
