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3 Promising Blockchain Stocks to Buy to Become a Crypto Millionaire
With the recent slowdown in cryptocurrency prices, it’s natural to wonder if the glory days are behind us. Far from there! I still believe in blockchain technology and cryptocurrencies like Bitcoin (BTC-USD) have enormous disruptive potential which is only just beginning to be exploited.
Are there any risks? Of course. This is still an emerging and highly speculative space. But the long-term benefit these tokens provide is worth it for investors who want some volatility.
One of the best ways to gain exposure to this space is through blockchain stocks. Unlike cryptocurrencies themselves, these companies benefit from growing mainstream adoption and real-world use cases that are starting to expand globally. Yet their stock prices often move in sync with crypto market fluctuations, giving you crypto-like return potential without direct crypto ownership.
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Of course, do your own due diligence before investing, as these stocks could face heartbreaking corrections if crypto sentiment deteriorates again. That said, here are three to consider.
CleanSpark (CLSK)
Bitcoin mining operation. Bitcoin mining farm. GREE stock.
Source: Michal Bednarek / Shutterstock
CleanSpark (NASDAQ:CLSK) intrigues me as a differentiated Bitcoin mining company focused on the use of renewable energy. The company gets 91% of its energy from renewable sources (a rarity in this industry), which positions this stock well for future growth.
CleanSpark production doubled last year to 6,903 Bitcoins, while its turnover increased by 28%. However, the company also generated $137 million in losses compared to $168 million in revenue. I know some investors are scared by the magnitude of the losses, but we need to understand that mining companies operate differently. CleanSpark strategically retains a large portion of its mined Bitcoin. So if prices appreciate significantly, the value of its assets and the company’s future earnings potential are much higher than its financial data suggests. Currently, CleanSpark holds over 3,000 Bitcoins on its balance sheet.
As CEO Zach Bradford said: “Operationally, our year-over-year hashrate growth has been exceptional, underscoring our commitment to not only growing, but also scaling effectively. We reached a remarkable milestone this year by surpassing a total hashrate of 10 exahashes per second, and this hashrate is among the most efficient in the industry.
For example, CleanSpark recently sign a deal to purchase up to 160,000 new miners from Bitmain. This type of growth, given its current renewable energy mix, gives me great confidence in CLSK stock despite short-term crypto volatility. This company is perfectly positioned for the upcoming Bitcoin halving event.
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Iris Energy (IREN)
Bitcoin on a microprocessor in a motherboard. With copy space and selective focus. 3D rendered banner illustration. Concept for crypto currency, mining, technology, investment, finance, crypto mining stocks
Source: Gaston Cerliani / Shutterstock.com
Going down the market capitalization ladder, Iris energy (NASDAQ:IREN) intrigues me as an emerging Bitcoin miner uniquely leveraging renewable energy assets. This is a higher risk, higher reward play, but it offers huge upside potential if Bitcoin prices reverse their downtrend.
In 2023, Iris mined more than 4,123 Bitcoins from its specialized facilities in Canada, Texas and the United Kingdom. Revenues have increased alongside production, even as Bitcoin prices have fallen from their all-time highs. Now, IREN stock is down nearly 50% over the past month amid the cooldown. However, this extreme downward volatility in its stock price also shows why miners can outperform the price of Bitcoin itself on the upside.
Notably, Iris recently sign a letter of intent to purchase up to 5.3 EH/s of latest generation Bitmain miners, as well as options to acquire an additional 9.1 EH/s in the second half of 2024. This capacity increase will help Iris largely offset the impact of future halving events.
So, in effect, Iris appears poised to negate the negative effects of the upcoming halving (i.e. the reduction in Bitcoin production) while benefiting handsomely from any further Bitcoin or crypto price breakouts. For risk-tolerant investors, I think Iris Energy warrants a speculative position today for its 10X potential if conditions improve.
HIVE Blockchain Technologies (HIVE)
Action GREE: a crypto mining platform
Source: Mark Agnor / Shutterstock.com
Blockchain HIVE (NASDAQ:HIVE) is my top Canadian choice for cryptocurrency mining. In 2023, the HIVE mined 3,260 Bitcoins even as network difficulties skyrocketed. The company achieved this through a combination of growing hashing capacity and importing cheaper energy from Quebec and Atlantic Canada.
I particularly like how HIVE limits shareholder dilution relative to its peers. Company stock issues increased by only 5% Last year. Additionally, the company’s balance sheet remains strong, with enough liquidity to fund operations and service debt through this cycle.
Certainly, HIVE’s mining cost of $22,600 per Bitcoin seems historically high. But its ability to mine about 800 coins each quarter provides enormous operating leverage if the halving and Fed policy push prices even higher than the company’s cost basis.
HIVE also continues to target double-digit hashrate growth in 2024 to capitalize on improving conditions. So while it can certainly be a risky and volatile investment, HIVE stock appears to be well-positioned as a crypto play for when the tide turns again in the crypto sector.
As of the date of publication, Omor Ibne Ehsan did not hold (neither directly nor indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.
Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor who focuses on growth and cyclical stocks that have strong fundamentals, value and long-term potential. He is also interested in high-risk, high-return investments such as cryptocurrencies and penny stocks. You can follow it LinkedIn.
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