3 Reasons HIVE Blockchain Technologies (TSXV:HIVE) Stock Could Surge Higher

HIVE Blockchain Technologies (TSXV:HIVE) stock could surge higher, as Bitcoin gets upgraded and gains more adoption.

| More on:

HIVE Blockchain Technologies (TSXV:HIVE) stock has been an excellent proxy for Bitcoin. The cryptocurrency miner tends to reflect the industry’s momentum, which is probably why it’s lost roughly half its value in recent months. 

However, there are three major catalysts on the horizon that could catapult HIVE stock to fresh all-time highs. Here’s a closer look. 

Cleaner Bitcoin

HIVE operations and mining facilities are based in Sweden, Iceland, and Canada. That makes it one of the cleanest producers of digital assets. The majority of electricity produced in these nations is derived from renewable sources such as geothermal and hydroelectric. 

As Elon Musk intensifies the focus on cleaner Bitcoin mining, producers like HIVE seem well positioned to dominate the industry in the near future.

Bitcoin’s major upgrades

Bitcoin miners like HIVE Blockchain recently signaled their consent for a major upgrade to the network. The Taproot upgrade will be implemented in November and will reduce the space each block on the network occupies. This reduces fees and makes transactions more efficient. It also opens the door for more smart contracts on the Bitcoin network. 

This major upgrade should enhance the digital asset’s value, which is great news for HIVE stock investors.

El Salvador

Last week, El Salvador became the first nation to declare BTC legal tender. The government is now considering whether government employees can be paid in BTC. Lawmakers also believe the adoption of digital assets will reduce the transaction fees of remittances that constitute 20% of the national economy. This move could change the way other nations and regulators treat digital currencies. It also marks the growing adoption of Bitcoin as a legitimate asset class.  

HIVE stands to benefit from this, as its underlying asset gains wider acceptance. 

Fundamentals

Bitcoin isn’t the only asset HIVE is focused on. The company also mines Ethereum and Ethereum Classic, while its reserves are spread across different digital and fiat assets. Diversified mining operations and treasury assets means HIVE can shrug off downturns better than any individual crypto asset. 

Additionally, the company boasts of a tremendous track record in generating consistent revenues. In the third quarter, the company generated a 174% increase in income to $13.7 million. 

As of the end of 2020, the company’s unrealized gain from investments stood at $149 million. Considering Bitcoin’s performance year to date and the fact that HIVE has probably generated more assets since the start of the year, these investments could be worth more by now.

HIVE stock is not cheap by any standards. The stock is currently trading with a price-to-sales multiple of 31 and a price-to-book multiple of 20. However, these three key catalysts could help the company grow into its valuation over time. 

Bottom line

The focus on renewable energy for Bitcoin mining puts HIVE in a favourable position. Meanwhile, growing adoption of the cryptocurrency and an upcoming major update to the network could greatly enhance its value. HIVE stock should be on your radar if you’re optimistic about the future of this sector.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned. 

More on Tech Stocks

a-developer-typing-lines-of-ai-code-while-viewing-multiple-computer-monitors
Tech Stocks

Could Constellation Software Become the Next Berkshire Hathaway?

Constellation Software's (TSX:CSU) capital-allocation strategy is similar to that of Berkshire Hathaway (NYSE:BRK.B).

Read more »

cloud computing
Tech Stocks

3 No-Brainer Tech Stocks to Buy With $1,000 Right Now

These three Canadian tech stocks could be among the best growth opportunities in the market right now.

Read more »

happy woman throws cash
Tech Stocks

3 Growth Stocks That Could Be Long-Term Wealth Creators

These three growth stocks aim to grow their financials at a higher rate than the industry average, thus delivering superior…

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Is POET Technologies a Top AI Stock for Canadian Investors?

Canada has relatively few AI stocks, and the ones it has are different from American AI stocks in terms of…

Read more »

Rocket lift off through the clouds
Tech Stocks

2 Growth Stocks That Could Skyrocket in 2025 and Beyond

Wondering what types of stocks could rapidly rise in 2025? Check out these two stocks with substantial upside if they…

Read more »

up arrow on wooden blocks
Tech Stocks

The 3 Smartest Tech Stocks to Buy With $500 Right Now

Tech stocks can be seen as a bit risky, but these three have far less risk and more stability for…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Tech Stocks

Shopify: A Must-Have Growth Stock for Your TFSA Now (and the Next 10 Years)

Shopify (TSX:SHOP) stock isn't just a top growth company, it's a titan worth owning in your decades-long TFSA fund.

Read more »

cloud computing
Tech Stocks

Best Stock to Buy Right Now: Manulife vs CIBC

Want the best stocks? These two are certainly the best options. But which is the better buy?

Read more »