Bitcoin: Has It Hit An Inflection Point?
Crypto bulls are very worried in 2021 as Bitcoin is once again underperforming relative to stocks. Some market watchers, however, say July has historically not been a good time for crypto investors. Despite the recent collapse, it looks like cryptos have reached a critical juncture, if not an inflection point. Is there any significant change, positive or negative, happening in space?
Potential inflection points
Besides its volatile nature, government actions, like banning cryptocurrency trading and mining or introducing regulatory changes, could lead to a negative inflection point. Carsten Murawski, professor of finance at the University of Melbourne in Australia, says authorities want to control digital currencies.
Likewise, central banks view cryptocurrencies as threats to financial stability. He added that they don’t want parallel currencies to float. For Fidelity’s Tom Jessop, the pandemic has been a catalyst for wider acceptance or adoption. He said there was an acceleration in institutions studying and evaluating the crypto universe. They may soon be implementing digital assets.
As we are still in the early stages, uncertainties persist, making BTC fragile and very risky. Alternative investments, for now, are crypto, blockchain or technology stocks. While it may reflect fluctuations in Bitcoin, TSX assets are more secure.
Best Bitcoin Miner
Hut 8 Mining (TSXV: HUT) (NASDAQ: HUT) may be the first choice, as the company engages in Bitcoin mining. The crypto stock is also listed on the US stock exchange. At $ 6.04 per share, current investors are up 73% year-to-date, although the price hit $ 11.09 in mid-March 2021.
The $ 860.77 company is proud to be one of the oldest, largest and most innovative digital asset mining pioneers in North America. Besides Bitcoin mining, Hut 8’s management team has extensive experience in blockchain, software, investment banking, venture capital, and government.
Hut 8’s diverse mobile production platform is located in Alberta (Medicine Hat and Drumheller), with low-cost power contracts guaranteed. The growth in activity is visible, given the record quarterly revenue of $ 32.5 million in the first quarter of 2021 (quarter ended March 31, 2020), or 156% compared to the first quarter of 2020.
Blockchain super growth wave
HIVE Blockchain Technologies (TSXV: HIVE) is off to an explosive start in 2021, as is BTC. From $ 2.50 on January 4, 2021, the price climbed 172% to $ 6.80 on February 19, 2021. Similar to real crypto, the rally did not hold up. As of July 9, 2021, HIVE is trading at $ 3.11 per share.
The first-mover advantage belongs to HIVE. The $ 1.25 billion company is a pure blockchain investment. As a blockchain infrastructure company, its goal is to connect blockchain and cryptocurrencies to traditional capital markets. In addition, HIVE has a low working capital requirement. He can sell his mined coins strategically to maximize his profits.
HIVE believes that Ethereum, and not BTC, will continue to be the backbone of this new financial ecosystem. Management expects to ride the wave of blockchain super growth through Ethereum. They want investors to know that this crypto has a lot more developers than any other blockchain platform.
Gateway to the world of new technologies
Jessop of Fidelity believes Bitcoin is the gateway to the new technological world, mainly due to more use cases. It could be a new operating system for financial services. You have a way to potentially move value around the planet in a more efficient and automated way. There would be some features that are not possible in a traditional setting.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We are straight! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we post sometimes articles that may not conform to recommendations, rankings or other content.
Foolish contributor Christophe Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.