Cryptocurrencies have received a lot of attention in recent months, with investors seeking exposure following the bullish movement. The US election helped ignite a major flashpoint, with President-elect Donald Trump’s positive stance on digital assets providing a big boost.
However, it’s no secret that cryptocurrencies are a volatile asset class, and a more conservative approach can scare many away. Still, market participants can gain decent exposure through several stocks, including Robinhood Markets HOOD and Coinbase COIN.
Both companies are promoting virtual currency trading services, and future results are likely to be positive due to increased inflows and transaction fees. For those seeking exposure to cryptocurrencies, let’s take a closer look at each.
Robinhood’s easy-to-use platform allows investors to trade a variety of assets, including cryptocurrencies. Analysts are bullish on the company’s upcoming quarterly results, with estimates of $0.41 per share up more than 120% from last year and suggesting 1,200% growth.
Image source: Zacks Investment Research
Cryptocurrency revenue for the third quarter was $61 million, a 165% increase year-over-year to $61 million. The notional principal trading volume of virtual currencies was $14.4 billion, an increase of 112% from the previous year.
The company’s crypto trading has rebounded significantly, as evidenced by its year-on-year growth rate. As you can see below, the company has generally struggled to beat consensus estimates for crypto-based revenue recently.
Image source: Zacks Investment Research
Coinbase is the largest cryptocurrency exchange in the United States. The outlook for its upcoming releases is quite bullish, with the Zacks Consensus EPS estimate of $0.87 moving 93% over the past few months. Earnings revisions are following the same path, with COIN’s revenue expected to grow 67% year over year.
Image source: Zacks Investment Research
The company’s trading revenue has been mixed overall compared to our consensus estimates in recent quarters. Given the current trading environment, it is reasonable to expect strong results in the next quarterly print.
Image source: Zacks Investment Research
conclusion
Cryptocurrencies are once again attracting investors, with the asset class continuing to rally massively in recent months. Its momentum is undeniable. For those seeking exposure through stocks, both of the companies mentioned above, Robinhood Markets HOOD and Coinbase COIN, will provide just that.
Both companies are expected to benefit significantly from increased trading volumes, and we are likely to see this development in their upcoming quarterly results.
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