3 Risky Crypto Stocks Investors Should Avoid

Bitcoin, the largest cryptocurrency, has been trading in a tight range due to the volatile economic backdrop. Furthermore, with a disappointing global growth forecast, the crypto market could be bracing for more volatility. Amid this backdrop, we think crypto stocks Block, Inc. (SQ), Silvergate Capital (SI), and MicroStrategy (MSTR) are best avoided. Keep reading….



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The ongoing war in Ukraine and the 40-year high inflation are affecting the prices of cryptocurrencies. Furthermore, the leading cryptocurrency, Bitcoin, fell below $23,000 recently after the second quarter. GDP report. Bitcoin has not been above $50,000 since the end of December 2021. The cryptocurrency has been trading in a tight range of $22,000-$25,000.

Bitcoin fell again on Thursday in US labor market figures, which indicated a weakening market. On top of it, adding to the volatility in the crypto market is the IMF forecast that economic growth will slow from 6.1% last year to 3.2% this year.

The economy in general could affect the performance of the risky asset in the short term. Therefore, we believe that Block, Inc. Crypto Stocks (square), Silvergate Capital Corporation (YES) and MicroStrategy Incorporated (MSTR) might be better to avoid now.

Block, Inc. (square)

SQ provides tools that enable merchants to accept card payments and provides reporting and analytics and overnight settlement. The company’s hardware product offerings include magnetic stripe readers and contactless and chip readers, and it offers software products, including Square Point of Sale, Square Appointments and Square for Retail.

For the fiscal second quarter ended June 30, SQ’s total net income decreased 5.9% year over year to $4.4 billion. Adjusted net income decreased 56.8% from the prior year quarter to $110.74 million. Adjusted net income per share was $0.18, down 63.3% from the same period last year.

Analysts expect SQ revenue for fiscal 2022 to rise marginally year over year to $17.76 billion.

The stock is down 66.3% over the past year and 44.5% year to date to close its last trading session at $89.70.

S.Q. POWR Ratings reflect this gloomy picture. The stock is rated F overall, which equates to a strong sell on our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

SQ has a Stability grade of F and a Growth, Courage and Sentiment grade of D. In the 109-stock Financial Services (Company) industry, is ranked No. 103. The industry is ranked D. Click here to view additional POWR ratings for SQ (Impulse and Quality).

Silvergate Capital Corporation (YES)

SI is the banking holding company for Silvergate Bank that provides banking products and services to businesses and individual customers in the United States. The company accepts deposit products and offers loan products.

SI’s total interest expense increased 262.7% year over year to $1.04 million in the fiscal second quarter ended June 30. Total non-interest expense increased 42% from the prior year period to $30.55 million.

The stock is down 30.7% year-to-date and 8.1% in the past six months to close its last trading session at $102.68.

SI’s overall D rating translates to Sell in our POWR rating system. The stock is rated F for Value and Stability and a D for Quality.

SI is ranked #41 out of 42 Pacific Regional Banks industry stocks. To view additional POWR ratings for growth, momentum and sentiment for SI, Click here.

MicroStrategy Incorporated (MSTR)

MSTR is a provider of business analytics software and services. The company’s offerings include MicroStrategy, an enterprise platform that provides a modern analytics experience. It also offers MicroStrategy support that helps customers and improves the overall experience.

For the fiscal second quarter ended June 30, MSTR’s total revenue decreased 2.6% year over year to $122.07 million. Non-GAAP net loss and non-GAAP loss per share were $1.05 billion and $92.81, up 262.8% and 212.9% from the prior year period.

The EPS consensus estimate of $0.49 for the quarter ending September 2022 indicates a 73.7% year-over-year decline. Also, the consensus revenue estimate for the same quarter of $127.58 million reflects a marginal decrease from the prior year period.

MSTR shares are down 53.9% over the past year and 43.2% year to date to close its last trading session at $309.31.

It’s no surprise that MSTR has an overall F rating, which equates to a strong sell on our proprietary rating system. The stock has a Sentiment and Quality rating of F and a Value, Momentum and Stability rating of D. At F rating, 154 shares software application industry, ranks last.

In addition to the POWR rating grades we have listed above, you can see the MSTR growth rating here.


SQ shares were trading at $91.01 per share on Friday morning, up $1.31 (+1.46%). Year-to-date, SQ is down -43.65%, versus a -12.34% rise in the benchmark S&P 500 index over the same period.


About the author: Anushka Dutta

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.

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The charge 3 Risky Crypto Stocks Investors Should Avoid first appeared in StockNews.com

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