The cryptocurrency stock sector became one of the market’s hottest in 2021 and 2022, when bitcoin was hitting all-time highs.
All of the major cryptocurrencies crashed in 2022… but now that they’ve found support, this sector is a threat to heat up again.
Cryptocurrency stocks include all of the following:
To be successful in the stock market, you need to understand the different sectors in the market. Each sector has its own characteristics and trends that can impact your trading strategy. Understanding these sectors can help you identify potential trading opportunities and make informed decisions. If you’re looking to understand the different sectors in the stock market, here’s a comprehensive guide on stock market sectors.
The cryptocurrency sector is part of the financial services sector, which is cyclical — meaning that stocks tend to follow the direction of the larger economy. Prior to the crypto crash of 2022, crypto boosters theorized that the crypto sector would be resistant to larger economic currents, with crypto acting as a hedge against inflation. At least for this cycle, crypto proved even more susceptible to market turmoil.
Even though it’s fallen from all-time highs, this sector is still worth watching. At its best, every crypto stock acts like a penny stock.
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The Best Cryptocurrency Stocks in October 2024 — Sector Leaders
Let’s unpack what the ‘best cryptocurrency stocks’ should mean to you. I definitely don’t mean that they’re the best stocks to invest in.
I don’t think that any stocks are ‘safe.’ What I look for is volatility, and the best cryptocurrency stocks have plenty of it!
Your job as a trader is to profit from volatility, do NOT fall in love with any trade or asset as a trade is not profitable until you lock in your profits & getting emotional can muddy the waters. Similarly, it's difficult to cut losses fast if you become too emotionally involved
— Timothy Sykes (@timothysykes) December 7, 2021
When you’re learning about a sector, pay attention to the sector leaders. Their charts can tell you a lot about the health of the sector.
I trade smaller-cap stocks than these. Market capitalization plays a crucial role in understanding the size and risk associated with a particular company. It can help you diversify your portfolio and make informed decisions. If you’re interested in learning more about how market capitalization can impact your trading strategy, here’s a detailed guide on market cap.
When these large-cap stocks are running, their momentum can affect their entire sector and create the sympathy plays I like to trade!
Coinbase Global Inc [NASDAQ: COIN]
Founded in 2012, Coinbase is the leading cryptocurrency exchange platform in the United States. The company intends to be the safe and regulation-compliant point of entry for retail investors and institutions into the cryptocurrency economy. Users can establish an account directly with the firm, instead of using an intermediary, and many choose to allow Coinbase to act as a custodian for their cryptocurrency, giving the company breadth beyond that of a traditional financial exchange. While the company still generates the majority of its revenue from transaction fees charged to its retail customers, Coinbase uses internal investment and acquisitions to expand into adjacent businesses, such as prime brokerage, data analytics, and collateralized lending.
PayPal Holdings Inc. [NASDAQ: PYPL]
Paypal Holdings Inc is a technology platform that enables digital payments and simplifies commerce experiences on behalf of merchants and consumers all over the world.
The crypto angle here comes courtesy of PayPal and subsidiary Venmo’s crypto services. These apps have the most users in the peer-to-peer money movement space, which could position them as leading cryptocurrency platforms in the future.
Riot Platforms Inc. [NASDAQ: RIOT]
Riot Platforms Inc is focused on building, supporting, and operating blockchain technologies. Distributed blockchain technology is a decentralized and encrypted ledger that is designed to offer a secure, efficient, verifiable, and permanent way of storing records and other information without the need for intermediaries. It serves as a medium of exchange, store of value, or unit of account. The company’s segments include Bitcoin Mining; Data Center Hosting and Engineering. It generates maximum revenue from the Bitcoin Mining segment.
The Best Cryptocurrency Penny Stocks in October 2024
The best cryptocurrency penny stocks are constantly changing. Most of these companies won’t become the next Apple. I’m keeping them on watch to see if they match my preferred setups.
NOTE: I have NO intention of trading these stocks unless they suit my favorite setups. This is only a watchlist.
To find the best cryptocurrency penny stocks requires a top-level stock screener. I use the one in StocksToTrade — I helped design it, so it has all the tools and customizations I look for to create my stock watchlists.
Try StocksToTrade for 14 days and see how it helps your watchlist skills — only $7!
These are the penny stocks I’m watching in October 2024:
Bitfarms Ltd. [NASDAQ: BITF]
Bitfarms is a global, publicly traded Bitcoin mining company. Bitfarms develops, owns, and operates vertically integrated mining farms with in-house management and company-owned electrical engineering, installation service, and multiple onsite technical repair centers. The company’s proprietary data analytics system delivers best-in-class operational performance and uptime. Bitfarms currently has 10 farms, which are located in four countries: Canada, the United States, Paraguay, and Argentina. Powered by predominantly environmentally friendly hydro-electric and long-term power contracts, Bitfarms is committed to using sustainable, locally based, and often underutilized energy infrastructure.
Bit Digital Inc. [NASDAQ: BTBT]
Bit Digital Inc is engaged in the bitcoin mining business. Its mining platform operates with the primary intent of accumulating bitcoin which may sell for fiat currency from time to time depending on market conditions. It generates revenue from cryptocurrency mining.
Hut 8 Mining Corp. [NASDAQ: HUT]
Hut 8 Mining Corp is North America’s innovation-focused digital asset miner. Located in energy-rich Alberta, Canada. Hut 8 has one of the highest installed capacity rates in the industry and holds more self-mined bitcoin than any crypto miner or publicly-traded company globally. It is executing on its commitment to mining and holding bitcoin and has a diversified business and revenue strategy to grow and protect shareholder value regardless of bitcoin’s market direction.
How to Trade Cryptocurrency Stocks
Learning how to trade cryptocurrency stocks starts with your education.
Before you delve into the world of cryptocurrency stocks, it’s pivotal to grasp the wide array of stocks available in the market. From growth stocks to value stocks, from large-cap to small-cap, each type has its own unique characteristics and potential for returns. Understanding these differences can significantly enhance your trading strategy and decision-making process. To get a comprehensive understanding of the various types of stocks, check out this detailed guide on different types of stocks.
You also need to learn what penny stocks are, how they work, and how to identify their patterns.
My FREE penny stock trading guide is a good start.
From there, if you want to take it to the next level, consider joining my Trading Challenge.
Once you’re ready to start trading, you need a few key things…
Choose the Right Broker
To trade stocks, you need a brokerage account. Your broker is the gateway between you and trades. Choose a good one … Do your research and check out this guide for more tips.
Check out this quick startup guide to choosing a broker:
Get a Powerful Stock Platform
A stock screener can help you narrow down the many stocks available to trade. I use StocksToTrade, which can also help with the next item…
Build Your Watchlist
Before every trade, you need to perform a detailed stock analysis.
There are two key types of stock analysis: fundamental analysis and technical analysis.
See how I build my watchlists every Sunday by signing up to my NO-COST weekly watchlist!
StocksToTrade can help you do both: it has awesome charting software and links to stock news, SEC filings, and even social media mentions.
With day trading penny stocks, technical analysis — reading the charts — matters more. Chart patterns show me how a stock’s performed over weeks, months, or even years. That helps me on the next step…
Follow Your Trading Plan
A trading plan is where you plot out entry and exit points, risk, and profit goals. Ideally, you base the plan on careful research and stick to it.
Track Every Trade
You need to keep a METICULOUS trading journal. This is where the science of trading comes in.
How do you know what strategies work for you, and which don’t? You look at your trading journal.
How do you know when you’ve been overtrading and need a timeout? You look at your trading journal.
If you’re not careful, your emotions can determine your trading approach. Before long, you’ll be wearing the same socks that you were wearing on your “big day.” That isn’t trading anymore — that’s gambling.
Rinse and Repeat
Real trading is a job. It isn’t a boring, 9-5 job, but it’s still something that rewards consistency and discipline.
Follow these rules throughout your trading career. That will separate you from the constant flow of newbies trying to get rich quick, and protect you from the scammers trying to sell trading shortcuts.
