In this article, we will take a look at the 10 best cryptocurrencies Redditors are buying. You can skip our detailed analysis of these cryptocurrencies, and go directly to 5 Best Cryptocurrencies Redditors are Buying.
The free fall in the prices of cryptocurrencies over the past week has exacerbated investor concerns around volatile technology stocks. However, market experts like Cathie Wood, who reportedly holds the largest institutional investment in cryptocurrencies through her firm, Ark Investment Management, have dismissed the recent fall in value of digital assets as a temporary setback, backing currencies like Bitcoin to touch record highs of $500,000 in the coming years.
Other big names in the finance world have also backed her point of view. Angel investor Balaji Srinivasan, who has been a longtime advocate of the wider adoption of cryptocurrencies and has an uncanny knack of predicting future market direction, recently underlined his bullish view on digital assets in a media interview, mentioning` certain environmental-related and regulatory concerns around coin mining two months before Tesla, Inc. (NASDAQ: TSLA) chief Elon Musk raised them publicly to the detriment of popular cryptocurrencies like Ethereum.
Tesla, Inc. (NASDAQ: TSLA) also suspended Bitcoin payments for vehicle sales after the Musk tweet regarding the coin mining methods, sending stocks of firms that deal in crypto, like PayPal Holdings, Inc. (NASDAQ: PYPL) and Square, Inc. (NYSE: SQ), tumbling to new lows after a record rally witnessed over the past twelve months. PayPal Holdings, Inc. (NASDAQ: PYPL) and Square, Inc. (NYSE: SQ) are two of the largest digital payments companies in the world and have helped bring cryptocurrencies into the mainstream.
Amid the buzz around crypto stocks in general, American investment bank The Goldman Sachs Group, Inc. (NYSE: GS) has released a report underlining why it expects certain cryptocurrencies like Ethereum to perform better than peers like Bitcoin in the long run. The Goldman Sachs Group, Inc. (NYSE: GS) is offering investors exposure to crypto investments and has opened a cryptocurrency trading desk recently as well. The Goldman Sachs Group, Inc. (NYSE: GS) is one of the most well established finance institutions in the world.
The crypto endorsement by The Goldman Sachs Group, Inc. (NYSE: GS) is seen by many as a watershed moment for the industry that will accelerate the adoption of digital currencies around the world. However, there is also reason to be cautious about the new trend as regulatory concerns, evidenced by a recent Chinese crackdown on banks facilitating crypto transactions, still overshadow the potential benefits of using cryptocurrencies. Price volatility of digital assets has also been a cause for investor discomfort.
However, even with all the problems, it is fair to say that the crypto revolution of the past decade has changed market dynamics on a fundamental level. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 10 best cryptocurrencies Redditors are buying.
Best Cryptocurrencies Redditors are Buying
Elrond is a blockchain-based cryptocurrency that distinguishes itself from other digital currencies by providing high-level scalability, interoperability, and high throughput. It is placed tenth on our list of 10 best cryptocurrencies Redditors are buying. The currency aims to be a fast platform for distributed applications and enterprise use cases in the new internet economy. The firm that developed Elrond offers 30% smart contract royalties to coin developers and has partnered with many prominent businesses, including South Korea electronics giant Samsung.
American software giant Microsoft Corporation (NASDAQ: MSFT) has consistently backed the rise of new blockchain technology and has allowed the use of Bitcoin, another blockchain-based currency like Elrond, for payments to buy apps, games and other digital content from Microsoft Corporation (NASDAQ: MSFT) products like Windows, Window Phone, Xbox Games, Xbox Music or Xbox Video Store.
At the end of the first quarter of 2021, 251 hedge funds in the database of Insider Monkey held stakes worth $58.9 billion in Microsoft Corporation (NASDAQ: MSFT), down from 258 the preceding quarter worth $52.8 billion.
Just like Tesla, Inc. (NASDAQ: TSLA), PayPal Holdings, Inc. (NASDAQ: PYPL), and Square, Inc. (NYSE: SQ), Microsoft Corporation (NASDAQ: MSFT) is one of the best crypto stocks that Redditors are buying.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ: MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
9. USD Coin
USD Coin is a digital stablecoin whose value is tied to the value of the United States Dollar. It is ranked ninth on our list of 10 best cryptocurrencies Redditors are buying. It is a blockchain-based cryptocurrency that runs on the same network used by popular crypto coin Ethereum. USD Coin was developed by Circle, a peer-to-peer payments company based in Boston. More than 20 billion USD Coins are in circulation at present. USD Coin was first launched in 2018. In March, popular payments firm Visa announced that it would allow the use of USD Coin to settle transactions on its network.
Cryptocurrencies like USD Coin are mined using powerful computing machines like the ones developed by American technology firm International Business Machines Corporation (NYSE: IBM). The tech firm has also launched the IBM Blockchain, a cloud service that lets users develop blockchain-based currencies. International Business Machines Corporation (NYSE: IBM) also offers Blockchain for Enterprise solutions.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Arrowstreet Capital is a leading shareholder in International Business Machines Corporation (NYSE: IBM) with 3.6 million shares worth more than $482 million.
Just like Tesla, Inc. (NASDAQ: TSLA), PayPal Holdings, Inc. (NASDAQ: PYPL), and Square, Inc. (NYSE: SQ), International Business Machines Corporation (NYSE: IBM) is one of the best crypto stocks that Redditors are buying.
In its Q2 2020 investor letter, Distillate Capital, an investment management firm, highlighted a few stocks and International Business Machines Corporation (NYSE: IBM) was one of them. Here is what the fund said:
“AT&T and IBM exited the portfolio as they no longer met the quality criteria for inclusion with AT&T exceeding the debt limit and IBM falling out due to deteriorating long-term fundamental stability.”
Stellar is one of the top 10 cryptocurrencies by market capitalization. It is placed eighth on our list of 10 best cryptocurrencies Redditors are buying. It is based on an open source, decentralized protocol that converts digital currencies to fiat at very low-cost transfers. This has made Stellar one of the premium choices for cross-border transactions. Stellar was launched in 2014 and has since partnered with companies in many countries across the world, like a mobile payments startup in the Philippines, the ICICI Bank in India, African mobile payments company Flutterwave, as well as French firm Tempo Money Transfer.
Cryptocurrencies like Stellar are also being used by American technology firm DocuSign, Inc. (NASDAQ: DOCU) since 2015. The company offers electronic contract management solutions to businesses across the United States. DocuSign, Inc. (NASDAQ: DOCU) also offers e-signature products like CLM, Gen, and Negotiate.
At the end of the first quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in DocuSign, Inc. (NASDAQ: DOCU), down from 67 in the previous quarter worth $4.2 billion.
Just like Tesla, Inc. (NASDAQ: TSLA), PayPal Holdings, Inc. (NASDAQ: PYPL), and Square, Inc. (NYSE: SQ), DocuSign, Inc. (NASDAQ: DOCU) is one of the best crypto stocks that Redditors are buying.
In its Q3 2020 investor letter, Wasatch Core Growth Fund, an investment management firm, highlighted a few stocks and DocuSign, Inc. (NASDAQ: DOCU) was one of them.
“We recently liquidated our shares of DocuSign, Inc. (DOCU), which offers e-signature software that enables businesses and individuals to digitally prepare and execute agreements. Utilization of the software spiked during the pandemic and the stock was an excellent performer, propelling the company’s market capitalization to over $40 billion. While we still like the company, the valuation set a higher bar for the future. With the proceeds of our DocuSign sale, we rotated into what we viewed as more reasonably priced names.”
Chainlink is a cryptocurrency that runs on the Oracle network. It is ranked seventh on our list of 10 best cryptocurrencies Redditors are buying. The network also provides real world data to blockchain-based networks. In 2020, Chainlink was among the top five digital currencies in the world in terms of market capitalization. In an initial coin offering in 2017, the currency raised more than $32 million. The Chainlink network has been used by many famous firms, including news company Associated Press, which used the Chainlink functionalities to provide media houses with the results of the 2020 US presidential election.
Mainstream payments firms like Mastercard Incorporated (NYSE: MA) have jumped on the crypto bandwagon in recent months, integrating crypto with their networks in anticipation of increased crypto-related financial activity across the world. Mastercard Incorporated (NYSE: MA) also offers a crypto card which can be used to make payments in digital currencies in Western Europe.
Out of the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Mastercard Incorporated (NYSE: MA) with 5.8 million shares worth more than $2 billion.
Just like Tesla, Inc. (NASDAQ: TSLA), PayPal Holdings, Inc. (NASDAQ: PYPL), and Square, Inc. (NYSE: SQ), Mastercard Incorporated (NYSE: MA) is one of the best crypto stocks that Redditors are buying.
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE: MA) was one of them. Here is what the fund said:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
Litecoin is a peer-to-peer cryptocurrency that was launched as a Bitcoin spinoff back in 2011. It is placed sixth on our list of 10 best cryptocurrencies Redditors are buying. It uses an open source network and differs from Bitcoin as it has a decreased block generation time, increased maximum number of coins, and a different hashing algorithm that uses scrypt instead of SHA-256. Litecoin also has a slightly modified graphical user interface compared to Bitcoin. Litecoin has lower transaction fees and the network it uses can process payments faster than the one used by Bitcoin.
Litecoin was released by Charlie Lee, a former Alphabet Inc. (NASDAQ: GOOG) employee. Alphabet Inc. (NASDAQ: GOOG), one of the biggest technology companies in the world, has been exploring the use of blockchain in the different projects it is working on, and has also invested in a decentralized cloud storage company that lets users develop blockchain-based currencies.
At the end of the first quarter of 2021, 159 hedge funds in the database of Insider Monkey held stakes worth $29 billion in Alphabet Inc. (NASDAQ: GOOG), up from 157 in the previous quarter worth $20 billion.
Polen Global Growth Fund, in its Q1 2021 investor letter, mentioned Alphabet Inc. (NASDAQ: GOOG). Here is what Polen Global Growth Fund has to say about Alphabet Inc. in its letter:
“For our top contributors, each generated strong returns for different, but fundamentally based reasons, in our opinion. Alphabet saw renewed strength recently as advertisers generally resumed spending after a short pause during the pandemic.
Alphabet experienced some challenging quarters in 2020 as many companies paused their advertising spend. But, the business bounced back recently, spurring a strong recovery in the company’s share price. Even during such a challenging period, the company still compounded revenue at 14% in constant currency for 2020.
This is partly due to Alphabet’s multiple growth engines. For example, while its search business was negative one quarter and only grew by 6% during another, YouTube ads and Google Cloud Platform (GCP) grew at over 30% and 46% during the quarter, respectively. YouTube and GCP combined now contribute over 50% of the company’s growth, which we believe is a testament to a strong culture of innovation, a long-term mindset, and prudent capital allocation. With search bouncing back this most recent quarter–growing 17% –we believe that Alphabet continues to be well-positioned to durably compound earnings at or above 15% for many years to come. It remains one of our largest positions.”
In its Q1 2021 earnings call, Singapore’s largest company by market capitalisation, Sea Limited, reported 147% year-on-year revenue growth. However, $SE missed Wall Street’s earnings expectations with a loss of 62 cents per share. The loss is 10 cents more than Q1 2020’s reported loss of 52 cents.
Shares initially dipped on the report to as low as $204 before closing up more than 11.82% to $228.11.
What caused the rebound? Despite missing on EPS, the Internet company has reported a 212% year-on-year increase on Gross Profit and EBITDA of $88.1m (Q1 2020: loss of $69.9m). This shows that the company’s investment on growth is showing results.
Image source: Garena
Sea Limited’s game developer and publisher, Garena, contributed significantly to its financial performance. The game developer reported a 147% year-on-year increase in revenue and 140% increase in EBITDA. Despite this stunning performance, Sea Limited did not divert its attention from Garena but continues to invest in Garena Academy Thailand, to educate young people to develop careers in e-sports and gaming. I like how the company invests on growth and continues pushing for more. It is also worthy to note that Free Fire remains the highest grossing mobile game in Latin America, Southeast Asia and India.
With the improving financial results, Sea Limited’s Garena, Shopee, and SeaMoney show promising future. However, like any other growth company, Sea Limited is trading at an inflated stock price. For investors who are keen in investing in growth company, Sea Limited seems to vave the calibre of a potential candidate.
Personally, I will not invest in $SE at its current price of $250. I prefer to invest in big boys like Alibaba and JD.com, especially as these companies are highly undervalued. This is only my opinion for sharing purpose. Investors should exercise caution and do your own due diligence before deciding whether to buy ot sell any shares.
Before I start off this article, I have to set the context here. Different individuals have different risk preference, some are risk takers and some are risk averse and some are somewhere between. So where do I stand? I stand in the middle between taking risk and taking less risk at different point in time but remain a risk taker in general. I wasn’t like this in the past during my younger days as I always want to wait for the best and safest price aka one with the highest margin of safety. Things go and I realise that keep waiting for the highest margin of safety is an ideal concept yet difficult to execute. Why? Markets never behave according to what we wish for but move according to what it wants. Yes to Mr Market.
To state, the market has been in a long secular bull since March 2009 and has corrected every now and then. For me, trying to call the top and bottom seems like a rolling a dice for many people unless you are George Soros, Paul Tudor or… So what can we do on our end? First, look at ourselves and assess our age, cash inflow from income, hustle (popular word now since Elon Musk used it recently) and spending. If you are young, you can afford to let time be your best friend. That’s when you can increase your chances of being right without being “killed” by volatility. Here, it is important not to take leverage as market cycle after so many years tend to be volatile. However, to keep waiting on the sideline without deploying a single dollar for me in itself is a risk too. For me, as my part of my portfolio management, I have deployed a certain percentage of my deployable cash in investment. This cash portion is different form my trading pot, which I need to take quick losses of I go wrong. For investment, I can afford to wait for my investment thesis to be proven right. Yes, however one must avoid the self filling prophecy or confirmation bias and take an unbiased view of the stock that one is holding. Exact timing of entry is good and ideal but may not be as critical as trading.
For investment or trading, capital preservation remains the most important rule. Risk is not knowing what one does not know or thinking one knows something when he or she does not really know. Volatility in itself is not risks but in fact, opportunities for individuals who are agile enough to capitalise on the opportunities. Share price in itself remains demand and supply of stocks that depend on fundamentals as well as Mr market emotions. So what are you risking depends on how much you know of the fundamentals of the company for people who are investing? For people who are trading, what you are risking depends on the timeframe and position size of your trade? Overleveraged position even when the trade eventually proves right may be closed out due to margin calls. That is why setting up stop loss for a trade is so important. Setting up stop loss is in itself a science and art. You have to learn along the way. In fact, small losses for trading is better as one starts the trading journey. This gives you the clarity that no one can ever win the market.
Kindly note that the above should not be construed as investment or trading advice.