2 Top Blockchain Stocks to Buy As Bitcoin Soars

The Bitcoin price surge has generated a great environment for equities like HIVE Blockchain Technologies Ltd. (TSX:HIVE) and others.

| More on:
A depiction of the cryptocurrency Bitcoin

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

When the spring kicked off, I’d discussed bitcoin’s price action. Key technicals at the time portended a break-out, but I was admittedly skeptical. Bitcoin has proven the doubters wrong into the summer, which has more than doubled its price since the publication of that article.

Bitcoin and other cryptocurrencies are enjoying what looks like a second boom — the most significant since the run-up to its peak in late 2018. With that, there is renewed interest not just in cryptos, but also blockchain-focused equities. Today I want to look at two equities that are well-positioned to benefit from the ongoing Bitcoin and crypto boom.

Hut 8 Mining

Hut 8 Mining (TSXV:HUT) owns industrial scale Bitcoin mining operations in Canada. Unsurprisingly, Bitcoin mining has shot up as cryptocurrencies have recaptured momentum in 2019. In May I’d discussed Bitcoin halving that was set to take place, which would reduce the rewards for miners going forward.

Hut 8 released some impressive second quarter data this past week. It achieved a record quarterly amount of Bitcoin mined for Q2 2019 of 2,816. The company retained Bitcoin of 3,250, up 24% quarter over quarter. The triple-digit percentage jump in bitcoin value was an obvious boost for Hut 8, as it saw its retained Bitcoin jump from $14.3 million in value as at March 31 to $46 million on June 30.

Shares of Hut 8 had an RSI of 52 as of close on July 10, putting the stock in neutral territory at the time of writing. Bitcoin miners will predictably benefit from the ongoing price bump, and Hut 8 is a company that is thriving in the early summer.

HIVE Blockchain

HIVE Blockchain (TSXV:HIVE) aims to provide infrastructure solutions in the blockchain industry. Shares have surged over 80% in 2019 as of close on July 10.

The company is set to release its fourth-quarter and full-year results for 2019 this month. HIVE reported some struggles in its March 1 third- quarter report as crypto prices were battling volatility. The company minted over 28,000 newly minted Ethereum, a 45% increase for the quarter, and 784 newly minted Bitcoin.

The stock enjoyed an enormous run-up in late March and early April on the back of Bitcoin’s price surge. However, it is still trading well off its 52-week highs set last July when it surpassed the $1 mark. HIVE stock had an RSI of 46 at the time of this writing, putting it outside oversold or overbought territory ahead of its earnings release.

The crypto parallel with precious metals

At the risk of an overly simplistic comparison, in many ways we can look at crypto and blockchain-connected equities like gold and silver producers. These equities, barring major internal moves, will consistently be driven by the spot prices of cryptos and precious metals.

Cryptos and PMs have both performed well as central banks have turned dovish on monetary policy. I expect this trend to continue into 2020, so crypto and blockchain-focused stocks may be worth the gamble in the near term.

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.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned.

More on Investing

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Investing

3 TSX Stocks That Are Perfect to Start Your Retirement Portfolio

Canadians building their retirement portfolios should target dependable TSX stocks like Suncor Energy Inc. (TSX:SU)(NYSE:SU) and others.

Read more »

Increasing yield
Dividend Stocks

3 High-Yield Dividend Stocks to Buy and Hold Forever

Young and old income investors can sleep easy by holding three high-yield dividend stocks for the long term, if not…

Read more »

Dividend Stocks

1 Under-the-Radar Dividend Stock to Buy for Monthly Passive Income

This dividend stock offers investors a whopping 9.02% dividend yield that's remained stable for over a decade.

Read more »

energy industry
Energy Stocks

Warren Buffett Is Going All-In on Oil: Should You?

Warren Buffett is buying oil stocks. In the past, he owned Canadian oil stocks like Suncor Energy (TSX:SU)(NYSE:SU).

Read more »

oil and natural gas
Dividend Stocks

Passive Income: 4 TSX Energy Stocks With Incredible Dividends

TSX energy stocks are gushing cash. Here are four top stocks to own for a combination passive income and capital…

Read more »

Technology
Investing

Restaurant Brands International Stock: My Favourite Dividend Bargain on the TSX

Restaurant Brands International (TSX:QSR)(NYSE:QSR) stock is a dividend juggernaut that's finally starting to get on the right track.

Read more »

TSX Today
Energy Stocks

TSX Today: What to Watch for in Stocks on Thursday, August 18

An overnight recovery in oil and metals prices could help the commodity-heavy TSX benchmark to open slightly higher today.

Read more »

A small flower grows out of a concrete crack.
Investing

3 Top Stocks You Can Still Buy for Under $20 a Share

Canopy Growth stock (TSX:WEED)(NASDAQ:CGC) and these two others are incredible investments to consider as we continue to move out of…

Read more »