4 Crypto Stocks Could Free Fall: Wait for It Before Buying

TSX’s top crypto stocks are falling like Bitcoin but should be excellent buying opportunities when their prices hit rock-bottom.

| More on:
crypto, chart, stocks

Image source: Getty Images

The world’s largest and most popular cryptocurrency is still on a downtrend heading into March. Edris, an anonymous crypto analyst, said a swift recovery of Bitcoin is unlikely after it lost significant support in recent days. On February 23, 2022, BTC dropped to US$37,800.12 or 16.8% from its recent high of US$44,575.20.

Meanwhile, the crypto winter extends to the TSX. As of this writing, Hut 8 Mining (TSX:HUT)(NASDAQ:HUT) and HIVE Blockchain Technologies (TSXV:HIVE)(NASDAQ:HVBT) are down by least 27% year-to-date. Investors in Galaxy Digital Holdings (TSX:GLXY) and Voyager Digital (TSX:VOYG) are also losing by more than 30%.

Given the extreme volatility in the crypto space, it would be best not to take positions now. The four crypto stocks could free fall and your best buying opportunity is when their prices hit rock-bottom.

Faster recovery

Hut 8 Mining has the best chance of recovering faster among the depressed growth stocks. Despite the underperformance so far this year, market analysts’ 12-month average price target is $18.25, a 151.7% jump from $7.25. HUT is an outperformer as it has rewarded investors with a 475.40% (79% CAGR) total return in 3.01 years.

The $1.21 billion digital asset miner aims to revolutionize the future of digital finance. Having two data mining centres in Alberta (Drumheller and Medicine Hat) is an advantage for Hut 8. The oil-rich province wants cryptocurrency to be part of its economic diversification initiative. Alberta could become a destination for crypto companies.

Powering the blockchain ecosystem

HIVE Blockchain Technologies can qualify as a TSX30 winner owing to its +361.54% (66.34% CAGR) gain in the last three years. However, at $2.40 per share, the crypto stock is down 27.5% year-to-date. Based on analysts’ ‘buy’ recommendations, the return potential in one year is $5.03 (151.7%).

The $983.63 million blockchain infrastructure firm claims to have the first-mover advantage. HIVE mines Bitcoin and Ethereum in three stable jurisdictions (Canada, Sweden, and Ireland) using low-cost renewable energy. According to management, it is building sustainable operations to power the blockchain ecosystem, today and in the future.

Focus on the crypto economy

Galaxy Digital operates in the cryptocurrency and blockchain technology industry. The full suite of products of this tech-driven financial services and investment management firm is within the sphere of the digital assets ecosystem. It has five synergistic business lines that drive growth.   

Performance-wise, GLXY has outperformed HUT and HIVE in the last three years with its total return of 666.67% (96.94% CAGR). The stock is in negative territory (-33% year-to-date), although analysts forecast a 174.5% appreciation from it current price of $15.18.

Platform for buying and trading

Voyager Digital is far from mediocre, as evidenced by its humongous return (942.11%) in three years. The overall negative sentiment in the crypto market caused the stock’s nosedive. VOYG trades at $9.90, but its price rose to as high as $25.17 on November 9, 2021, the same period when Bitcoin hit its all-time high.

Analysts see an upside potential of 152.3% or a return to its peak price last year. The $1.61 billion crypto asset brokerage firm operates a digital platform where users can buy and trade digital assets.

Visible growth runways

TSX’s top crypto stocks are down today but not out. All four have visible growth runways as Canada pushes for broader acceptance of cryptocurrencies.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns and recommends Bitcoin and Ethereum.

More on Investing

A cannabis plant grows.
Cannabis Stocks

Canopy Growth Stock Is Rising But I’m Worried About This One Thing

Canopy Growth stock is soaring as the legalization effort makes real progress in both Germany and the United States.

Read more »

young woman celebrating a victory while working with mobile phone in the office
Investing

3 Roaring Stocks to Hold for the Next 20 Years

These top TSX stocks are excellent long-term buys, given their multi-year growth potential and solid underlying businesses.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

grow dividends
Investing

Here’s My Top 3 TSX Stocks to Buy Right Now

Even though the TSX has been rising, there are still some good bargains out there. Here are three top compounding…

Read more »

Target. Stand out from the crowd
Investing

Prediction: This Canadian Growth Stock Could Double by 2030

Alimentation Couche-Tard (TSX:ATD) is a top growth stock that could do well over the next six or so years.

Read more »

Businessman holding AI cloud
Tech Stocks

Could Investing $20,000 in Nvidia Make You a Millionaire?

Nvidia stock has made investors millionaires in the last 10 years. Is it too late to invest to become a…

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

money cash dividends
Stocks for Beginners

Have $500? 3 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

If you're looking for cheap stocks, these three have a huge future ahead of them, all while costing far less…

Read more »