Forget Bitcoin: 1 Beaten-Down Growth Stock to Watch in 2022

Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) could be a top battered growth stock in Canada to buy in 2022 for Bitcoin-like gains.

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A depiction of the cryptocurrency Bitcoin

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Bitcoin (CRYPTO:BTC) and the cryptocurrency trade really heated up last year, but in 2022, the stakes are as high as ever. Indeed, more people are embracing a wider range of cryptocurrencies as a means of payment. And with the rise of decentralized financial (or DeFi for short), crypto users will be able to earn interest and take out loans with their digital tokens in a similar way they do with cash at some sort of large financial institution.

There’s no question that crypto, Bitcoin, and the future of the blockchain are exciting. Blockchain technology in particular is intriguing and could play a growing role in our daily lives in the future. That said, Bitcoin and today’s slate of cryptocurrencies aren’t guaranteed to be the “gold standard” of the future. In fact, Ether or a token that doesn’t yet exist could take the lead at some point over the next decade. If that happens, it’s hard to tell what Bitcoin’s fate will be. Further, governments may begin to really crackdown on Bitcoin, given its energy consumption and its role in governments losing a bit of control.

Bitcoin remains a highly risky investment

In any case, the risk/reward is as high as ever. Although many pundits may see Bitcoin continuing to climb to higher highs over a wide range of potential catalysts, I think it’s nearly impossible to project where any cryptocurrency is headed next, given it’s not backed by real assets. In my books, cryptocurrencies are less of a proven diversifier, although I wouldn’t be against holding 2-4% in crypto to further diversify your portfolio. Instead, I view crypto as more of a trade for those with incredibly high risk tolerances. Bitcoin and all the sort are ridiculously volatile, and they’re only suitable for those speculating with disposable income that isn’t make or break for one’s retirement prospects.

Although Bitcoin is unlikely to crumble like a paper bag in 2022, it really can’t be ruled out! Cryptos have a history of vicious cyclicality. And the best times to be a buyer are when nobody wants to touch them! Who knows if they’ll enter a cyclical downturn anytime soon? Regardless, growth stocks still strike me as a better bet, especially those that can outgrow recent rate-induced pressures on high-multiple names.

Lightspeed stock: Freshly sold off — better bet than Bitcoin?

Enter Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD), a commerce enabler that’s had to fight off short-sellers over at Spruce Point Capital in recent months. Indeed, Spruce Point exacerbated the weakness in the name, surrendering a huge chunk of the gains posted in the past year.

At writing, LSPD stock is down over 67% from its high. That’s excessive, to say the least, on short allegations that I don’t find extremely convincing. Sure, there are concerns, but as of yet, the smoking gun that some seek isn’t there at the moment. Given the trend of shorts targeting Canadian companies, especially those with tremendous momentum behind them, I think the risk/reward is far more compelling with LSPD than Bitcoin at this juncture.

Could Lightspeed be inflating its metrics? Is the growth all that it can be? Perhaps some metrics may have been more on the aggressive side. But I wouldn’t count the name out just because a firm has cried wolf.

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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool owns and recommends Bitcoin and Ethereum. The Motley Fool recommends Lightspeed Commerce.

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