Forget Bitcoin: Go for Gold in 2020

Bitcoin has fallen sharply in the second half of 2019, while stocks like Kirkland Lake Gold Ltd. (TSX:KL)(NYSE:KL) have provided better and more consistent returns.

The rise of Bitcoin has been one of the hottest topics in the investing world over the past two years. Back in May, I’d discussed its recent surge that managed to carry it to a 52-week high into the early summer. It has been hard to avoid skepticism when it comes to Bitcoin and other cryptocurrencies since its fall from grace. Bitcoin has plunged steadily over the past six months as of late-morning trading on December 12. Stocks that are connected to the spot price of Bitcoin and the crypto market in general have also taken a major hit.

HIVE Blockchain provides infrastructure solutions in the blockchain industry. When there is a spike in trading activity in this volatile market, providers of this key service naturally see a bump in activity. HIVE Blockchain stock has dropped 54% over the last three months at the time of this writing. This has put its shares well into the red for the full year.

More storm clouds may be on the horizon for HIVE. Its market cap has fallen precipitously in the second half of 2019, and this has inspired some analysts to drop coverage altogether. Shares were trading a penny off its 52-week low on December 12. The stock last had an RSI of 39, putting it outside technically oversold territory. Even for the risk-hungry investor, there is little reason to risk a gamble on HIVE Blockchain as we look ahead to the new year.

Bet on gold instead

I’ve liked gold over Bitcoin, even when the digital currency was at its peak, but the yellow metal appeared to cement its status as the preferred asset in 2019. The yellow metal has suffered a retreat from its summer high, but it has still put together a great year. In September, I’d discussed why gold has a chance to soar even higher on the back of global developments next year. Those include rising trade tensions and slowing growth for the world’s largest developed economies.

Kirkland Lake Gold (TSX:KL)(NYSE:KL) has been one of the best gold stocks to own over the past decade. Shares have surged 56.9% in 2019 so far. The stock has achieved average annual returns of 19% over the past 10 years.

The company released its third-quarter 2019 results on November 6. It reported record net earnings of $176.6 million, or $0.84 per basic share, in the quarter. This was up 69% from the prior year. Revenues grew by 71% to $381.4 million, which also represented a 36% increase from Q2 2019. EBITDA soared 148% year over year to $296.4 million, and operating cash flow climbed 145% to $316.8 million.

Shares of Kirkland Lake are still trading at the high end of its 52-week range. The company has benefited from huge earnings growth over the past year, and it has expanded operations at several of its key mines. This stock has performed well, even in the face of headwinds for the spot price of gold. Positive price momentum can take it to new heights in the next decade.

Fool contributor Ambrose O'Callaghan owns shares of KIRKLAND LAKE GOLD LTD.

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