In the World of Crypto, These 2 Stocks Stand Out

Crypto investing is risky, but regular investors have safer alternatives in two TSX stocks.

| More on:
Diagonal chain made of zeros and ones. Cryptocurrency and mining.

Image source: Getty Images

Bitcoin (CRYPTO:BTC) had an explosive start to 2021, but its highly volatile nature came out in December. The world’s most popular cryptocurrency closed the year below US$50,000, although it climbed to as high as US$67,566.83 on November 8, 2021. In the new year, don’t expect Bitcoin and other cryptocurrencies to be less volatile.

The crypto world still lacks regulation and faces scrutiny by governments and central banks. Some market observers predict that Bitcoin’s price could decline sharply in the early months of 2022. Others say Ether is the better crypto, because it outperformed Bitcoin last year.

Regular investors should pass on Bitcoin and Ether. If you want exposure to the cryptocurrency market this year, Hut 8 Mining (TSX:HUT)(NASDAQ:HUT) and HIVE Blockchain Technologies (TSXV:HIVE)(NASDAQ:HVBT) are the logical choices. While the crypto-related stocks mirror Bitcoin’s wild price swings at times, they are safer alternatives.

Industrial-scale Bitcoin mining

Hut 8 Mining delivered parabolic returns in 2021. The crypto stock finished the year at $9.93 per share for a total return of 184.53%. Note, however, that the price zoomed to $19.80 on the day Bitcoin hit its all-time high. Market analysts recommend a buy rating and forecasts an upside potential of 93.85% ($19.85).

This $1.86 billion company engages in industrial-scale Bitcoin mining operations in two sites (Drumheller and Medicine Hat) at Alberta. According to management, Hut 8 has successfully navigated the bull and bear Bitcoin market cycles. Currently, it holds the highest number of self-mined Bitcoin in North America.

In Q3 2021, Hut 8 generated $50.3 million in revenues, a whopping 874% increase versus Q3 2020. The net income for the quarter reached $23.4 million compared to the $900,000 net loss in the prior-year period. Management said it raised $220 million in gross proceeds from the cross-listing on the NASDAQ in September 2021.

Hut 8’s mining capacity should increase further when its third mining site goes online soon. The facility in North Bay, Ontario will have 35 MW of capacity and should enable Hut 8 to generate power using a blend of by-product steam, hydrogen and natural gas. Its CEO, Jaime Leverton, said, “This third location demonstrates our commitment to sustainable technological innovation.”

HODL strategy

HIVE Blockchain Technologies’s primary goal is to bridge the blockchain and cryptocurrencies to traditional capital markets. It’s also the first publicly traded crypto miner. The stock’s total return in the last three years is 1,082.14% (127.12% CAGR), although the return last year was only 38.49%. As of December 31, 2021, the share price is $3.31.

This $1.43 billion company mines digital currencies such as Bitcoin, Ethereum, and Ethereum Classic. Apart from enjoying a first-mover advantage, HIVE is a low-cost operator, because it has access to low-cost green or renewable energy. Its mining operations are in Canada, Iceland, and Switzerland.

HIVE creates long-term shareholder value with its unique “hold-on-for-dear-life” (HODL) strategy. The company only sell mined coins at the best price for maximum profits. In Q2 fiscal 2022 (quarter ended September 30, 2021), revenue from digital currency mining increased 305% versus Q2 fiscal 2021 due to higher cryptocurrency prices.

Risky investments

Crypto investing is for people with high-risk appetites. Avoid Bitcoin and other digital assets in 2022 if you can’t afford to lose your money.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns and recommends Bitcoin and Ethereum.

More on Cryptocurrency

bulb idea thinking
Energy Stocks

Get In On the Action – How to Invest In the Hottest Trends Now

Are you looking to make a fortune from stock markets? Then you have to invest in the hottest trends that…

Read more »

cryptocurrency, crypto, blockchain

After a Rollercoaster February, Is Galaxy Digital Stock a Buy?

Galaxy (TSX:GLXY) stock soared by 30% before dropping by 21%, so what's been going on, and should investors get in…

Read more »

consider the options

Should You Buy Galaxy Digital Stock Right Now?

Galaxy Digital Holdings is down 80% from all-time highs, but should you buy this cryptocurrency stock right now?

Read more »

New virtual money concept, Gold Bitcoins
Tech Stocks

These 2 Stocks Carry a Lot of Risk, But Their Upside is Huge

If you want windfall gains, you have to risk losing what you invest. These two stocks with disruptive technology could…

Read more »

cryptocurrency, crypto, blockchain

Is Hut 8 Stock a Buy in December 2022?

Hut 8 Mining Corp. (TSX:HUT) stock has been throttled in the face of a crypto bear market. It still looks…

Read more »

cryptocurrency, crypto, blockcahin

HIVE Blockchain Stock Fell 18% In October – Is It Time To Buy? 

Hive Blockchain (TSXV:HIVE) stock is down with the crypto market but ready for a BTC rebound.

Read more »

crypto, chart, stocks

2 Top Cryptocurrencies to Buy in October 2022

Ethereum and Solana are two of the most popular cryptocurrencies in the world that are well poised to deliver substantial…

Read more »

Hand arranging wood block stacking as step stair with arrow up.

2 Cryptocurrencies to Buy for Potential Recovery

The largest and most liquid cryptocurrencies may not always be the first to recover, and you may have to go…

Read more »