We recently compiled an extensive list of the 20 Best Cryptocurrency Stocks to Buy According to Hedge Funds. In this comprehensive analysis, we delve into the standing of CME Group Inc. (NASDAQ:CME) among other prominent cryptocurrency stocks.

Cryptocurrency has surged as a significant political topic in the United States amidst ongoing election campaigns. Alex Thorn, the Head of Firmwide Research at Galaxy Digital, characterized August as a challenging and seasonally unfavorable period for Bitcoin. He highlighted that historically, eight out of the last eleven Augusts have seen Bitcoin’s value decline. Nevertheless, political developments have also significantly influenced the crypto landscape.

Thorn suggests that many perceive Donald Trump’s potential victory as beneficial for the cryptocurrency market. Trump, who is currently running for President, has invigorated the crypto community by promising a strategic plan to establish the United States as the ‘crypto capital of the planet.’ Simultaneously, Kamala Harris has shown support for policies aimed at expanding the cryptocurrency industry. Thorn believes that Trump’s victory would likely propel the crypto market upwards due to anticipated regulatory easing. Conversely, he views Harris’s potential win as having a more neutral impact, given her advisors’ alignment with the Biden administration’s crypto policies.

Looking ahead to September, historically another weak month for cryptocurrencies, Thorn notes that the subsequent months—October, November, and December—are typically the most bullish for crypto, driven by seasonal factors. Despite the eagerly anticipated Federal Reserve interest rate cuts on the horizon, crypto market investors remain cautious. JPMorgan’s Head of Global and European Equity Strategy has downplayed the potential for a crypto bull market. While September has historically been a challenging month for U.S. stocks, the upcoming rate cut could be an exception.

In an interview with CNBC, Anthony Pompliano, CEO of Professional Capital Management, discussed recent Bitcoin price movements. He pointed out two significant events: the German government selling off Bitcoin through various exchanges and Mt. Gox releasing coins onto the market. Pompliano described Bitcoin as highly illiquid, with many holders maintaining a long-term investment perspective. At the beginning of 2024, over 70% of Bitcoin had not moved for more than a year, although some of it started to circulate as prices increased, typical in a bull market. Pompliano predicts that this percentage may decrease to between 50% and 55%, but at least half of Bitcoin will remain with long-term holders. The critical question is whether these holders can withstand the pressures from these significant events. Pompliano concludes that time, rather than a pro-crypto candidate in the upcoming elections, will be the ultimate catalyst for Bitcoin’s performance. Despite a typically slow summer season, prices usually rise again in September and beyond.

Our Methodology:

To compile our list of the 20 best cryptocurrency stocks to buy according to hedge funds, we analyzed ETFs and online rankings to create an initial list of 40 companies engaged in the crypto sector. We then narrowed it down to the top 20 stocks with the highest number of hedge fund holders as of Q2 2024.

At Insider Monkey, we focus intensely on the stocks that hedge funds are heavily invested in. The rationale is straightforward: our research indicates that by mimicking the top stock picks of leading hedge funds, we can outperform the market. Our quarterly newsletter strategy selects 14 small-cap and large-cap stocks each quarter and has achieved a 275% return since May 2014, surpassing its benchmark by 150 percentage points (see more details here).

CME Group Inc. (NASDAQ:CME) emerges prominently in our analysis. The firm operates as a leading derivatives marketplace where clients can trade futures, options, cash, and OTC markets across four exchanges: CME, CBOT, NYMEX, and COMEX. These exchanges offer global benchmarks in major asset classes. Founded in 1848 as the world’s first futures exchange in Chicago, CME Group has expanded its offerings to include managing cryptocurrency exposure through Bitcoin, Micro Bitcoin, Ether, and Micro Ether futures and options.

CME Group Inc. (NASDAQ:CME) boasts a highly diversified product portfolio, enabling it to adeptly navigate varying macroeconomic conditions. It is uniquely positioned as the sole global exchange providing customers with electronic access to all benchmark products across Energy, Metals, Agricultural, and Environmental markets. The increasing demand for risk management has bolstered CME Group’s robust financial performance.

In Q2 2024, CME Group reported record revenue of $1.5 billion and achieved the highest Q2 average daily volume (ADV) in its history with 25.9 million contracts traded daily. This includes a record non-U.S. average daily volume of 7.8 million contracts. The firm experienced year-over-year growth across all asset classes, leveraging the growing need for risk management to sustain strong financial results.

As of Q2 2024, CME Group’s stock is held by 59 hedge funds, placing it among the 20 best cryptocurrency stocks to buy according to hedge funds. GuardCap Asset Management is its largest shareholder with an investment worth approximately $698 million.

Overall, CME ranks 8th on our list of best cryptocurrency stocks to buy according to hedge funds. While we recognize CME’s investment potential, we believe that certain undervalued AI stocks hold even greater promise for delivering higher returns within a shorter timeframe. For those interested in an undervalued AI stock trading at less than five times its earnings, we recommend checking our report on the cheapest AI stock.

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