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3 Bitcoin Stocks Expected to Increase Sales 522% to 21,551% by 2023 – Motley Fool

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Returns as of 11/19/2021
Returns as of 11/19/2021
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Since the beginning of the 20th century, stocks have delivered the highest average annual return among popular investment vehicles, such as bonds, gold, and other commodities. But over the short term, cryptocurrencies have lapped the stock market many times over.
Leading the charge is Bitcoin (CRYPTO:BTC). The world’s largest digital currency by market cap has increased in value from $0.0008 (that’s eight-hundredths of a penny) at the beginning of July 2010, to a peak of more than $68,000 per coin. For those of you keeping score at home, Bitcoin has delivered a greater than 8,000,000,000% return since its debut.
However, this surge in cryptocurrencies — specifically Bitcoin — is also fueling growth for select companies. According to consensus estimates from Wall Street, the following three Bitcoin stocks are expected to deliver jaw-dropping sales growth ranging from 522% to as much as 21,551% over the next three years.
Image source: Getty Images.
Perhaps it’s no surprise that one of the fastest-growing companies on the planet over the next three years is leading cryptocurrency exchange and ecosystem Coinbase Global (NASDAQ:COIN). After recording $1.28 billion in sales in 2020, Wall Street is looking for Coinbase to top $7.9 billion in sales come 2023. This works out to a 522% increase in revenue in just three years.
Bitcoin and Ethereum account for most of Coinbase’s trading revenue. The company is essentially counting on social media buzz to drive new and existing customers to buy or trade Bitcoin. Considering that Coinbase has 7.4 million monthly transacting users (MTU) in the third quarter, which is more than triple last year’s MTUs, the company appears to be doing a good job of courting new investors. 
Coinbase is likely also getting a boost from Bitcoin being legitimized, in some capacity. In September, El Salvador became the first country to officially legalize the world’s leading cryptocurrency as tender. If businesses become more accepting of Bitcoin, and governments are more tolerant of its use, demand for Bitcoin could grow.
However, I’d be remiss if I didn’t point out that Coinbase is facing numerous challenges. For instance, the barrier to entry in the crypto brokerage space is virtually nonexistent. Even though Coinbase is the clear crypto leader in verified users (73 million) and assets ($255 billon held on its platform), it wouldn’t be difficult for a competing exchange to undercut the fees Coinbase charges. This fee competition is ultimately what led to zero-commission trading with traditional stock brokerages.
Furthermore, since most cryptocurrency investors are young or new to the investing realm, they could be in for a surprise next year when they learn about wash-sale rules or have to pay tax on their capital gains. This could adversely affect trading frequency in 2022.
While Coinbase is slated for incredible growth through 2023, it doesn’t appear to have a moat that would command a premium valuation.
Image source: Getty Images.
Another Bitcoin stock expected to deliver eye-popping sales growth over the next three years is cryptocurrency miner Riot Blockchain (NASDAQ:RIOT). Following the roughly $12 million the company reported in sales last year, Wall Street is looking for Riot to hit $623 million in full-year revenue by 2023. That’s just your run-of-the-mill 5,057% increase in sales.
For those unfamiliar, cryptocurrency mining involves a person or business using high-powered computers to solve complex mathematical equations that validate groups of transactions (i.e., a block) on a digital ledger, known as a blockchain. The first user to validate a block receives a block reward, which for Bitcoin is 6.25 tokens. This equates to almost $400,000 in value per block reward.
For crypto miners like Riot Blockchain, both size and efficiency matter. The company has been a busy bee in 2021, in terms of ordering mining equipment. In April, the company announced a $138.5 million order for 42,000 S19j Antminers, and recently added a $54 million order for 9,000 S19j Pro miners. The expectation is Riot Blockchain will have all 90,150 of its miners up and running by the fourth quarter of 2022. 
The company is also spending aggressively on deploying immersion-cooling technology. Riot notes that immersion-cooled miners operate more efficiently, which means better production and a greater likelihood of beating others to the punch when it comes to earning Bitcoin block rewards.
While this might sound like a slam-dunk investment idea, Bitcoin miners might be the worst way to invest in the world’s top digital currency. For instance, companies like Riot are almost entirely dependent on external factors, rather than innovation.
Additionally, Bitcoin block rewards halve every four years. Unless the price of Bitcoin continues to soar, return potential will decrease over time.
Image source: Getty Images.
The crème-de-la-crème of expected revenue growth among Bitcoin stocks comes from Marathon Digital Holdings (NASDAQ:MARA), which is another cryptocurrency mining company. With full-year sales expected to skyrocket from about $4.4 million to $944 million in just three years, Marathon will actually be sprinting to 21,551% aggregate revenue growth.
The expansion strategy for Marathon Digital and Riot Blockchain is similar, save for two points. First, whereas Riot expects to cap its miner fleet at 90,150 units by the fourth quarter of 2022, Marathon Digital will have a larger fleet of miners deployed by roughly the midpoint of next year. Marathon’s fleet will consist of a little more than 133,000 miners, more than 42,000 of which have been received and are awaiting deployment. According to the company, it began chartering planes in October to help mitigate some logistical issues that have affected deliveries worldwide.
The second key difference between these two companies is that Marathon also directly acquired Bitcoin as an investment. Although both companies hang on to the Bitcoin they mine, Marathon made a $150 million investment in January that netted the company 4,812.6 Bitcoin (about $31,168 per token). With Bitcoin doubling in value since this purchase, Marathon is sitting on an unrealized gain of around $150 million.
But even with its larger fleet and beefed up balance sheet that holds 7,453 Bitcoin (as of Nov. 1), Marathon is facing a number of hurdles that could derail its business. In addition to the halving of Bitcoin block rewards every four years, there’s also no barrier to entry in the crypto mining space. In short, competition is steadily increasing as block rewards push lower over time.
With Marathon riding Bitcoin’s coattails, rather than relying on innovation like a traditional business, it looks to be a very risky investment.

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Stock Advisor launched in February of 2002. Returns as of 11/19/2021.
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The 10 Fastest-Growing Cryptocurrency Ecosystems In 2021 – Forbes

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As the cryptocurrency industry grows more fragmented, new data shows which platforms software developers are flocking to.
Two years ago, bitcoin dominated the cryptocurrency market, gobbling up 70% of its market value. But as crypto has ballooned to exceed $2 trillion in assets, the industry has fragmented. Today, bitcoin’s share sits below 40%, and new crypto networks are popping up every day. One way to sift through the clutter and see where the industry is going is to follow the software developers who build and maintain crypto networks. 
“Developers tend to be pretty rational. If there’s something they can play with that has real utility, developers have this ability to go find that thing,” says Avichal Garg, a managing partner at crypto-focused venture firm Electric Capital. He views the number of developers who are working on a crypto network “as a leading indicator of where value will be created and accrue over the next 10 years.” 
Garg co-authored a report with Electric Capital partner Maria Shen that reveals which cryptocurrency platforms attracted the most developers in 2021. They used data from GitHub, the go-to online repository where developers store their code, to estimate how many engineers work on each platform. Their data underestimates the total number of developers, since it doesn’t capture code that’s written privately or the many engineers that work at companies like Coinbase. 
Their research says 18,000 active developers (including both full and part time contributors) are working on cryptocurrency platforms, up from roughly 10,000 a year ago. Garg sees that surge as a validation of the industry’s growth and longevity. Kinjal Shah, an investor at Blockchain Capital, agrees: “When people are voting with their feet and their time, it’s a strong signal that there is something they’re building for the long term,” she says. 
Electric Capital’s research analyzed nearly 500,000 sets of code and 160 million code updates. It compared December 2020 to December 2021 to calculate growth. For the list below, it counted a developer as full time if he or she made at least 10 software updates in a month. 
 
The fastest-growing platforms are all competitors to Ethereum, the second-largest crypto network launched in 2015 that has 1,300 full time developers creating applications on it. Ethereum acts as a decentralized computer that applications can be built on, and it’s maintained by more than 5,000 “nodes” or computers that help validate transactions. One downside of being so widely distributed is that Ethereum can only process about 15 transactions a second (the Nasdaq stock market averages about 20,000 transactions per second), and a single transaction fee can sometimes exceed $100.
All of these fast-growing crypto networks take different approaches than Ethereum to decentralization and “consensus,” the algorithmic process of validating a transaction. They settle transactions faster and have lower fees, and most aren’t as widely decentralized as Ethereum. 
Korea-based Terra was founded by entrepreneur Do Kwon, 30, and launched four years ago. Its UST “stable coin”—a cryptocurrency pegged to the value of a U.S. dollar–has grown quickly to reach a market value of $10 billion, putting it in the top five stable coins in the world, according to crypto data site Messari. San Francisco-based Solana surprised many crypto insiders over the past year as it attracted hundreds of developers and vocal support from crypto billionaire Sam Bankman-Fried. A variety of applications built on Solana, ranging from crypto trading exchanges and lending products to music apps, have become very popular. Solana’s SOL token went from $1.85 in January 2021 to $170 by the end of the year, hitting a market value of $53 billion. 
Near, a protocol founded in the Bay Area in 2017, was launched by Alexander Skidanov and Illia Polosukhin, two engineers who worked previously on the highly regarded MemSQL distributed database system and Google’s TensorFlow machine learning platform. Both Solana and Near were built in Rust, a popular programming language that’s more widely used than Solidity, which Ethereum is based on. Solana and Near have also been aggressive about offering grants to software developers if they agree to build applications on their respective systems. Near announced an $800 million grant program in October, and former Circle CMO Marieke Flament became the Near Foundation’s CEO this year. 
One platform that lost a significant number of developers was EOS, which dropped from about 125 total active developers (including full and part time) in December 2020 to 80 a year later. In 2018, EOS famously ran a $4 billion “initial coin offering” fundraise and was later fined $24 million by the SEC for running an unregistered security offering. The company didn’t admit or deny wrongdoing.  
In addition to the fastest-growing networks, Electric Capital’s research shows which have the largest number of total developers. Ethereum has long retained the top spot, and about one in every four new crypto developers who entered the industry over the last year chose to build on Ethereum. 
 

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Crypto scams are the top threat to investors 'by far,' say securities regulators – CNBC

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Crypto scams are the top threat to investors ‘by far,’ say securities regulators  CNBC
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World's Top Bitcoin Mining-Rig Maker Halts Sales as Clients Flee – Bloomberg

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Bitcoin mining machines operate at a mining facility by Bitmain Technologies Ltd. in Inner Mongolia, China.

Bitmain Technologies Ltd. has suspended sales of machines for spot delivery globally, aiming to prop up local prices after crypto miners fleeing Beijing’s crackdown dumped used mining rigs on the market.
The world’s biggest maker of Bitcoin machines told the local mining community Wednesday it has stopped selling new equipment after prices for top-tier rigs plunged by about 75% since April. By postponing sales, it could help miners exiting the industry get better prices for their machines. Bitmain could also benefit if the reduced supply buoys prices over the longer term for new machines.

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