Cryptocurrencies, and crypto miners specifically, are red hot right now. Undoubtedly, investing in crypto and blockchain is an exciting prospect given the recent waves of decentralization and the long-term growth focus so many investors have today. These stocks might be considered the new meme stocks (or old meme stocks, depending on how you look at them).
Here’s my take on why Hive Blockchain Technologies (TSXV:HIVE) is gaining so much attention right now.
HIVE is a speculative way to play the cryptocurrency space
Social media platforms like Reddit and Twitter have started playing a significant role in how people invest. When a subreddit or a group starts promoting a stock, its price inflates, prompting more trades in these sectors. In Canada, however, these “stonks” have usually flown under the radar.
Retail investors buying stocks based on what’s “hot” on social media have stormed into penny stocks and cryptocurrency investments. This trend has been accelerated by Tesla’s recent US$1.5 billion investment in Bitcoin.
For investors looking to speculate, Canadian crypto miner Hive Blockchain is one of the best domestic ways to do so. Like other commodity-based businesses, cryptocurrencies are a highly volatile investment. Accordingly, it’s no surprise Hive is doing well in this heated, speculative bull market.
Since HIVE mines both Bitcoin and Ethereum, this diversification alleviates some of the risk associated with volatility tied to just one commodity. With mining assets set up worldwide, HIVE’s future looks quite promising, meme stock or not.
The Bitcoin market is lucrative, but dangerous
In the words of fellow contributor Joey Frenette, cryptocurrencies “are only worth as much as someone else is willing to pay for it.”
Despite their decade-old existence, there are still many controversies associated with cryptocurrencies. However, with several ETFs, funds, and crypto mining stocks finding a place on the TSX index, it appears big money is now piling into this trade.
Additionally, with Elon Musk’s Tesla and Jack Dorsey embracing Bitcoin, this cryptocurrency now has some real credibility. Indeed, Bitcoin appears to have successfully moved away from its rather negative reputation of supporting illicit transactions on the dark web to becoming a mainstream option for average investors.
For investors who genuinely believe in the future of blockchain and Bitcoin, buying and holding miners is a better option than holding cryptos in a wallet. At least, it’s a more liquid option and much easier to trade for the average investor. While I’m not bullish on cryptos in general, I still think HIVE is an intriguing option for risk takers and millennial investors.
Bottom line
Crypto investing is still highly speculative. Accordingly, investors shouldn’t gamble more than they’re willing to lose on these investments. However, for those with a bit of “funny money” to put on this sector, Hive is an interesting option today. If more social media-savvy investors rally together, this stock can soon find itself on a wild ride.
That said, momentum works in both directions, so trade carefully.
