This under-the-radar cryptocurrency stock could outpace Bitcoin in 2022

Is "crypto-winter" here? Consider this stock as a sneaky long-term play on the cryptocurrency space.

| More on:
A young male Bitcoin investor sits as his desk in front of a monitor with the bitcoin logo on it and a laptop next to him showing a graph of cryptocurrency stocks

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Cryptocurrency Bitcoin (CRYPTO: BTC) has been one of the best investments you could have made over the past several years. It's up roughly sixfold over the past 24 months, and many times more over its lifetime.

Bitcoin's market cap has ballooned to roughly $820 billion, more than a third of all value among cryptocurrencies. Bitcoin's rate of appreciation may slow down at this large size, making a bear market possible for Bitcoin in 2022 if investors cool off toward it.

Meanwhile, technology is creating value in the broader cryptocurrency space, including data analytics company Palantir Technologies (NYSE: PLTR) launching Foundry for Crypto. While Bitcoin's track record of gains is impressive, Palantir's stock could outpace Bitcoin in 2022. Here's why.

Is Bitcoin due for a soft year?

Bitcoin is up more than 29,800% over its lifetime, showing just how ridiculously good of an investment it's been for early investors. The price has continued multiplying, up by roughly six times over the past two years, but just 20% over the past 12 months.

Bitcoin Price Chart

Bitcoin Price data by YCharts

Bitcoin is currently down after setting an all-time high in late 2021. To be sure, nobody can predict the price action of cryptocurrencies. But Bitcoin doesn't have earnings or free cash flow like stocks do, which can be a compass of sorts for valuing them. Bitcoin and other cryptocurrencies are mainly a function of supply and demand.

Suppose investors begin shying away from "buying the dip" because of Bitcoin's negative price momentum. In that case, investors could see a soft 2022 for it and other cryptos, especially after the massive price action seen from 2020 and 2021.

Foundry for Crypto can help the industry

Cryptocurrencies have become popular for several reasons; they operate on blockchain technology, a type of ledger that publicly tracks each transaction as an ongoing chain so that people can't change it.

Blockchain technology means that cryptocurrencies are decentralized; they aren't managed by a single party, like how the government controls the U.S. dollar. The unregulated nature of cryptocurrency is a plus for many crypto investors, but there could be hurdles that slow down how decentralized currencies are adopted by society.

For example, the cryptocurrency space has become a Wild West of sorts, where scams are rampant, and coin "pump and dump" schemes typically leave investors with losses after the founders abandon the project once they make money.

Palantir's Foundry is a software-as-a-service data platform that interacts with data to help users make actionable decisions. It can integrate data, perform analytics, build models, map, and track decision-making. It's almost like Iron Man's power armor; it doesn't function by itself, but it makes a superhero when combined with the user.

Palantir launched Foundry for Crypto to gain exposure to the growth of cryptocurrencies and decentralized applications. Foundry for Crypto lists offerings including anti-money laundering, fraud detection, intelligence for decentralized applications, and analytics across blockchains. It's still very early, and Palantir will need to elaborate on the program's progress over the coming quarters and years. Still, Foundry could prove a valuable tool in a space where security and regulation are lacking. Cryptocurrency is still speculative, but some estimate that it could grow into an enormous field, which could be a massive opportunity for Palantir over the long term.

Why Palantir could soar in 2022

Bitcoin isn't the only asset coming down from a big run; Palantir's stock has struggled, too, amid a marketwide sell-off of tech stocks. Shares are currently near 52-week lows, falling from $45 per share to under $17.

PLTR PS Ratio (Forward) Chart

PLTR PS Ratio (Forward) data by YCharts

Palantir's price-to-sales ratio has declined on a forward basis from nearly 48 to under 17 because the company's revenue keeps growing while the share price drops. Meanwhile, free cash flow has turned positive over the past year, a great sign that the business is on a path to profitability. Adjusted free cash flow was $119 million in Palantir's most recent reporting period, the third quarter of 2021, up from a negative $53 million in 2020.

The stock's reduced valuation could be a great buying opportunity as the business is turning a corner producing free cash flow. Management has maintained a long-term revenue growth projection of at least 30% per year over the next four years.

If the market begins favoring fast-growing companies again, Palantir's improving financials and signs of continued growth in future quarters could make it a big winner in 2022. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Should you invest $1,000 in Douugh right now?

Before you buy Douugh shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Douugh wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Justin Pope has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and recommends Bitcoin and Palantir Technologies Inc. The Motley Fool Australia owns and recommends Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

A woman looks questioning as she puts a coin into a piggy bank.
International Stock News

Is Warren Buffett's Berkshire Hathaway the smartest investment you can make today?

So, with all the uncertainty, is Berkshire Hathaway the smartest investment you can make today?

Read more »

Warren Buffet
International Stock News

7 ways Warren Buffett changed my investing approach

I'm a big fan of Warren Buffett, and have been for many years.

Read more »

iPhone with the logo and the word Google spelt multiple times in the background.
International Stock News

Down 12% this year, should you buy Alphabet stock?

The Google owner is underperforming the Nasdaq Composite, which has rallied in recent weeks.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
International Stock News

Missed out on Apple in 2012? Buying Nvidia stock today could be your second chance

By now, it's clear that artificial intelligence (AI) is the next major technology platform.

Read more »

Robot humanoid using artificial intelligence on a laptop.
International Stock News

3 reasons Amazon stock looks like an incredible bargain right now

Here are three reasons Amazon stock looks like a rare bargain at current levels.

Read more »

Legendary share market investing expert and owner of Berkshire Hathaway Warren Buffett
International Stock News

Warren Buffett's $347 billion warning to Wall Street is ringing out loud and clear. History says this happens next.

Let's take a look.

Read more »

Warren Buffet
International Stock News

Warren Buffett nearly made his biggest investment since 2022. Here's what's holding him back.

Buffett said Berkshire came close to spending $10 billion, and he'd happily spend $100 billion.

Read more »

Happy man working on his laptop.
International Stock News

Here's why Amazon is a brilliant buy now (Hint: It's not e-commerce)

Fortunately for investors, cloud computing is going through a massive boom.

Read more »