Why Digi and Bullish Remain Compelling Long-Term Bets Despite Crypto Market Volatility

In an era where crypto markets oscillate between euphoria and despair, contrarian investors are increasingly turning their attention to infrastructure and exchange plays that offer resilience amid chaos. Digi International and Bullish, two companies operating at the intersection of technology and digital assets, exemplify this trend. While broader crypto indices remain volatile, these firms are building durable business models that could outperform in the long term.

Digi: A Case Study in Operational Resilience

Digi International's fourth-quarter fiscal 2025 results underscore its ability to thrive in uncertain environments. The company not only exceeded earnings expectations-posting an EPS of $0.56, a 9.8% beat over forecasts-but also delivered $114 million in revenue, a 3.97% outperformance according to earnings data. What stands out, however, is its strategic shift toward recurring revenue. Annual Recurring Revenue surged 31% year-over-year to $152 million, now accounting for 35% of total revenue. This transition from transactional sales to multi-year subscriptions reflects a disciplined approach to cash flow stability, a critical advantage in volatile markets.

Digi's leadership, under CEO Ron Konezny, is also positioning the company to capitalize on the industrial Internet of Things (IoT) and edge computing. By integrating AI into its products and exploring "tiny language models" for edge devices, Digi is enhancing customer ROI while future-proofing its offerings. Adjusted EBITDA of $108 million-a 11% year-over-year increase-further highlights its operational efficiency. With a long-term goal of reaching $200 million in ARR and adjusted EBITDA by 2028, Digi's trajectory suggests a business that is not merely surviving but strategically adapting to macroeconomic headwinds.

Bullish: Regulatory Wins and Institutional Appeal

While Digi operates in the physical infrastructure space, Bullish is carving out a niche in crypto exchanges tailored for institutional investors. The company's recent acquisition of a New York BitLicense-a regulatory milestone-has positioned it as a rare public play in a sector starved for institutional-grade solutions. This license allows Bullish to offer spot trading and custody services to advanced traders in New York, a critical market for capital inflows.

The market has taken notice. Bullish's shares rose 5% following the regulatory approval, and Cathie Wood's ARK Invest significantly increased its stake by purchasing over $8 million worth of shares across two ETFs. KBW has initiated coverage with a "market perform" rating and a $55 price target, citing U.S. expansion as a key growth driver. These endorsements signal confidence in Bullish's ability to navigate regulatory complexity-a trait that could become increasingly valuable as crypto markets mature.

Contrarian Logic in a Volatile Market

The broader crypto landscape remains a rollercoaster. Recent reports note a "downward spiral" despite brief recoveries, yet underlying adoption trends suggest resilience. As one analysis observes, digital currencies are "gaining broader acceptance in financial and investment ecosystems," even amid sharp fluctuations. For investors willing to look beyond short-term noise, companies like Digi and Bullish represent undervalued plays on foundational infrastructure and regulated exchange services.

Digi's diversified revenue streams and Bullish's institutional focus provide insulation from the kind of speculative selloffs that plague pure-play crypto assets. Both companies are betting on the long-term utility of their platforms-whether through IoT-driven industrial solutions or institutional-grade crypto trading-rather than the whims of market sentiment.

Conclusion

In a market where fear often overshadows fundamentals, Digi and Bullish offer compelling narratives for contrarian investors. Digi's operational discipline and ARR growth, coupled with Bullish's regulatory progress and institutional backing, position them as durable long-term bets. As the crypto ecosystem evolves, these firms may prove to be the bedrock of a more stable and institutionalized future.