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).
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.
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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.
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.
Think Hive is the next big thing? Then you definitely need to read this:
Before you consider Hive Blockchain, you may want to hear this.
Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now... and Hive Blockchain wasn't one of them.
The online investing service they've run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.
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 Chris MacDonald has no position in any of the stocks mentioned. David Gardner owns shares of Tesla. Tom Gardner owns shares of Tesla and Twitter. The Motley Fool owns shares of and recommends Tesla and Twitter.