Despite the muted enthusiasm for cryptocurrencies such as Bitcoin (USD BTC) In recent weeks following the approval of the Bitcoin spot ETF, some blockchain stocks with growth potential could revive bullish sentiment among investors.
These blockchain stocks are highly valued by Wall Street, with some analysts expecting double-digit growth in these companies' earnings per share and revenue numbers going forward. Much of this optimism may be due to new liquidity being pumped into the market by institutions over time – a result of the recent approval of Bitcoin spot ETFs.
Other tailwinds that could boost these companies' returns include broader acceptance of cryptocurrencies as a viable investment. Research that uncovers facts such as that these coins can improve a portfolio's risk-adjusted returns could be attractive to the majority of investors.
Here are some blockchain stocks with growth potential that investors should consider.
Coinbase (COIN)
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Coinbase (NASDAQ:COIN) remains a major player in the blockchain and cryptocurrency exchange market. It also plays a key role in managing Bitcoin spot ETFs. Notably, it is listed in the role of SSA Surveillance Sharing Agreement (SSA) in 8 out of 11 companies that have applied for spot BTC ETF approval.
COIN also plays a role in the custody and funding of these ETFs, positioning the company strongly for the future.
Although Wall Street currently rates COIN as a “Hold,” analysts are very optimistic about the prospect of improving fundamentals. Specifically, revenue is expected to rise 16.87% in fiscal 2024, while earnings per share are expected to rise from -81 cents to -19 cents.
This makes COIN one of the blockchain stocks with growth potential.
Riot Blockchain (RIOT)
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Riot Blockchain (NASDAQ:REVOLT) focuses on mining cryptocurrencies, primarily Bitcoin. It is one of the largest crypto mining companies in North America.
The company's stock is up 91.08% over the past year, and it looks like it could be even more profitable for investors. Over the past year, it is expected to rise another 44.58% and Wall Street rates this as a “Strong Buy”.
Revenue is expected to grow 61.33% in fiscal year 2024, while earnings per share are also expected to rise as the brand moves towards profitability.
One of the main reasons I'm bullish on RIOT is that the company's sales and profits are improving, but also that its book value per share could increase significantly in the wake of the Bitcoin halving in April.
RIOT holds 7,362 Bitcoins with a market value of $310,011,317. Since Bitcoin tends to appreciate before and after the halving, we could see a significantly stronger balance sheet from RIOT, which could lead some investors to believe the company is undervalued based on the assets on its balance sheet.
RIOT is then one of those blockchain stocks with growth potential.
Nvidia (NVDA)
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Despite Nvidia's (NASDAQ:NVDA) premium valuation at around 80 times sales, I think it's important to put this into context with its growth potential. And a significant portion of this growth is expected to come from the blockchain industry.
NVDA stock's GPUs are crucial for cryptocurrency mining, which is an integral part of blockchain networks like Bitcoin ether (ETH-USD). Additionally, more cryptocurrencies that support GPU mining are being released every day, and I expect this trend to accelerate in the future as awareness of the cryptocurrency industry expands and becomes more accessible.
Although fiscal 2024 falls well short of last year's astronomical EPS jump (621.54%), it also appears to be very attractive for NVDA in terms of EPS. Analysts expect earnings per share to rise 67.57% during this period and continue to rise in the low double digits through 2028.
Investors should therefore keep an eye on NVDA.
At the time of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the author and are subject to InvestorPlace.com's publication guidelines.
Matthew began writing coverage of the financial markets during the 2017 crypto boom and has also been a team member at several fintech startups. He then began writing about Australian and US stocks for various publications. His work has been published in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha and New Scientist magazine, among others.
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