In late April, I’d discussed whether the Bitcoin and cryptocurrency bull market had come to an end. A few weeks later, top crypto assets suffered sharp losses. Rumours surfaced that federal officials in the United States were gearing up to bolster regulatory pressure on digital currencies. Meanwhile, Elon Musk made enemies among Bitcoin enthusiasts after Tesla announced that it would distance itself from crypto due to its outsized carbon footprint. Today, I want to look at what has driven Bitcoin’s recent surge. However, I’m more interested in snatching up two crypto stocks instead. Let’s jump in.
Why Bitcoin has regained momentum in the late summer
Bitcoin and its peers in the crypto space were hit hard by volatility in the late spring and early summer. Fortunately, concerns over a regulatory crackdown have dissipated in the summer. On the contrary, policymakers have been far more accepting of Bitcoin and crypto in recent statements. This illustrates that this is a market that is here to stay.
The price of Bitcoin rose above US$47,000 in early morning trading on August 20. This represents its highest levels since the correction got started in the first half of May. As usual, investors should be aware of the major volatility that is present in this sector. Instead of betting on Bitcoin, Canadian investors may want to consider crypto stocks.
This crypto stock still offers solid value
Galaxy Digital Holdings (TSX:GLXY) is the first crypto stock I want to zero in on today. This asset management firm operates in the digital asset, cryptocurrency, and blockchain technology space. Shares of Galaxy have climbed 97% in 2021 as of close on August 19. The stock has soared over 480% in the year-over-year period.
The company released its second-quarter 2021 results on August 16. Galaxy faced some resistance due to a drop in crypto prices. Still, counterparty trading volumes increased over 90% in the second quarter. Meanwhile, assets under management (AUM) jumped 12% to $1.42 billion. Still, the company posted a net comprehensive loss of $175 million — down from a net gain of $35.3 million in Q2 2020.
Shares of this crypto stock last had a very attractive price-to-earnings (P/E) ratio of 6.8. It is not too late to buy Galaxy, as digital currencies are on the rebound.
Don’t sleep on this Bitcoin miner right now
Hut 8 Mining (TSX:HUT)(NASDAQ:HUT) is a Toronto-based company that is involved in crypto mining across North America. This crypto stock has shot up 103% in 2021. Its shares have climbed 570% in the year-over-year period.
The company unveiled its second-quarter 2021 results on August 12. Hut 8 has been adamant about holding Bitcoin for the long term. In Q2 2021, 100% of self-mined Bitcoin was deposited into custody. As of June 30, 2021, Hut 8 held 3,824 Bitcoins. Total revenue came in at $33.5 million in Q2 2021 — up from $9.23 million in the prior year. Adjusted EBITDA in the year-to-date period has increased to $30.6 million compared to a marginal loss in the first six months of 2020.
Better yet, this crypto stock still possesses a favourable P/E ratio of 20.
