1 Stock Could Soar 120% if Oil-Rich Alberta Becomes a Global Crypto Hub

The TSX’s top crypto stock could soar more than 100% very soon if Alberta becomes the international destination for cryptocurrencies.

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

Image source: Getty Images

Oil-rich Alberta is taking a new path that should further bolster its economy in the 21st century. The Western Canadian province has long eyed economic diversification to lessen dependence on the oil and gas sector. Its minister of Jobs, Economy, and Innovation, Doug Schweitzer, said the province wants to be at the front and centre in an area of huge disruption.

Schweitzer was referring to the energy-intensive cryptocurrency industry. The province desires to embrace digital token mining and all other crypto-related endeavours to diversify the economy.

The minister added, “When you take a look at the whole decentralized finance space, crypto, you know, this area is not going away. We know what’s going to be here long term.” Thus, the ultimate goal is for Alberta to become the international crypto hub.

Top digital currency miner

The latest development is excellent news for Hut 8 Mining (TSX:HUT)(NASDAQ:HUT) and growth investors. The $1.51 billion company is one of the world’s largest digital currency miners. Its two data mining sites (Medicine Hat and Drumheller), where industrial-scale Bitcoin mining happens, are both in Alberta.

If Alberta progresses to becoming the international destination for the cryptocurrency industry, HUT should soar exponentially. The crypto stock has, so far, delivered superior returns to investors. In the last 3.01 years, the total return is 514.19% (82.93% CAGR). As of February 7, 2022, HUT trades at $9.09% per share.

Market analysts covering the stock recommend a buy rating. Their 12-month average price forecast is $18.25 (+100.8%), although it could climb by as much as 120% to $20. Hut 8 has a significant growth runway to expand its mining operations, and, therefore, the price estimates appear very conservative.

Significant growth runway

Hut 8’s installed capacity rate is among the highest in the crypto universe. As of January 31, 2022, the company has 5,826 BTC in reserve after mining an average of 308 tokens (9.93 per day) during the month. Moreover, the installed operating capacity (2.36 EH/s) increased by 17% from December 31, 2021. The plan is to deploy additional miners in the Alberta sites to increase overall efficiency and hash rate.

The cryptocurrency mining company is bullish on Bitcoin, blockchain technology, and web 3.0 in particular. Hut 8 has a unique position within the digital asset following the recent acquisition of cloud and colocation data centre business. With a leading high-performance computing platform, management can proceed to bridge the nascent and traditional computing worlds.

A third mining site will soon rise in North Bay, Ontario, and will have an initial 35 MW capacity when it goes online. Hut 8 CEO Jaime Leverton said, “This third location demonstrates our commitment to sustainable technological innovation.” Expect the company to continue expanding its operations, as it strives to remain an industry-leading Bitcoin miner.

The big push

Schweitzer asserted that cryptocurrency is a big part of Alberta’s larger push to attract tech jobs. The commitment to cut red tape and a pro-business approach plus a private sector-driven energy grid should attract more companies in the digital asset sector. Meanwhile, Alberta’s big push to become the top cryptocurrency destination will surely make Hut 8 the next TSX superstar.

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.

More on Investing

consider the options

This Stock Is Miles Ahead of its Industry: Is it a Buy Now?

This company has been making significant waves since the beginning of 2024.

Read more »

Dice engraved with the words buy and sell
Bank Stocks

TD Bank Stock: Buy, Sell, or Hold at the 12-Month Low?

TD is near its 12-month low. Is more downside on the way?

Read more »

financial freedom sign
Stocks for Beginners

Could This Undervalued Stock Make You a Millionaire One Day? 

The TSX has good millionaire-maker stocks if you wait. This futuristic stock might look undervalued once you see its growth…

Read more »

Make a choice, path to success, sign
Tech Stocks

The Best and Worst Canadian Stocks So Far in 2024

The recent rate cut could benefit two Canadian stocks but would not lift two underperforming tech stocks.

Read more »

question marks written reminders tickets
Tech Stocks

Could This Under-the-Radar Canadian Stock Be the Next Shopify?

An under-the-radar Canadian stock could be the next Shopify, given its market-beating and stellar returns thus far in 2024.

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Top 2 REITs to Buy Before Yields Fall Along With Interest Rates

Canadian Apartment Properties REIT (TSX:CAR.UN) is just one REIT that could gain when rates really start to tumble.

Read more »

Printing canadian dollar bills on a print machine
Dividend Stocks

Where to Invest $10,000 in June

Canadian small caps are widely outperforming the TSX, and REITs, including Dream Industrial REIT (TSX:DIR.UN) could recover as interest rates…

Read more »

A glass jar resting on its side with Canadian banknotes and change inside.

CPP Benefits: How to Take Advantage of the Increase!

Canadians should take advantage of the new CPP enhancement and build a passive-income nest egg with dividend stocks like Brookfield…

Read more »