Are Traders Looking To Buy More Risk? Penny Stocks & Cryptocurrency In Focus
This year has been quite the whirlwind for everything from penny stocks to cryptocurrency. Even the market, in general, has climbed to record levels as retail traders have taken them by storm. The massive growth that online brokerages like Robinhood, Fidelity, and Webull saw last year is a clear example of this trend.
Look at some of the penny stock brokerage growth statistics of 2020. Retail traders chose simple apps like Robinhood to do their buying and selling. The simplistic platform allows users to buy and sell everything from penny stocks to Dogecoin easily. This has made it popular among new traders.
Using social media as a favored form of due diligence (DD), outlets like Reddit and Twitter became the new “Forbes” and “Wall Street Journal.” This mob mentality and urge to fight “the hedgies” was the focus for retail traders. This is where we saw stocks like GameStop (NYSE: GME) and Koss Corp. (NASDAQ: KOSS) go on meteoric rises in price.
But as new traders became more familiar with the markets, they learned that stonks don’t always go up. Most of the Reddit penny stocks from earlier in the year have cooled off. Broader markets have chugged higher. Now, it appears that these same Robinhood traders are looking for higher risk and higher volatility assets.
We’re not only talking about penny stocks but also cryptocurrencies like Dogecoin, Bitcoin, and others. The fact that these currencies can break out so quickly has attracted the same high-volatility traders that bought the big hype stocks in January. The biggest downside is that not all of the top cryptocurrencies to buy right now are accessible using a standard broker.
Dogecoin Ignites Rally In High-Risk Penny Stocks
Dogecoin quickly grew in popularity on social media. Earlier this year, one Doge could be picked up for less than a penny. Last week the Shiba-Inu-themed token reached a high of nearly 50 cents. In turn, this ended up triggering a green light for higher-risk asset classes. Clearly, penny stocks have come into focus.
Not many other investment vehicles in the stock market today offer the potential for massive gains in such a short period of time. In the case of penny stocks, even a shift in a few cents could equate to triple-digit returns. By definition, we’re talking about stocks under $5. Are all penny stocks guaranteed to see such gains? No, and for that reason, research is key.
While you may think that a boom in cryptocurrency would trigger a direct focus on tech, the momentum has been far-reaching. In this case, it may be more about penny stocks in general than individual sectors or industries. In this article, we’ll look at a few trending names to watch at the start of the week.
- SOS Limited (NYSE: SOS)
- Ebang International Holdings Inc. (NASDAQ: EBON)
- Sino-Global Shipping America Ltd. (NASDAQ: SINO)
Penny Stocks To Watch #1: SOS Limited (NYSE: SOS)
You can’t talk about cryptocurrencies like Dogecoin or Bitcoin without mentioning companies that mine digital currencies. SOS announced a crypto mining strategy early on in 2021. After raising around $25 million, it started rolling it out. Over the last few months, we’ve seen SOS establish key join-ventures to build upon its blockchain and big data business.
We’ve also seen the company seek out to acquire a controlling interest in power plants. The obvious goal here is to grow its crypto-mining operations, specifically in North America. With fresh capital raised at the end of March ($125 million), SOS has set itself on a course to develop its cryptocurrency mining, cryptocurrency security, and insurance businesses.
Last week, SOS announced that it produced 42 Bitcoins and 916 Ethereum during the first quarter of the year. It also received over 5,400 cryptocurrency mining rigs. With things like Dogecoin turning attention to digital currency, penny stocks like SOS, that focus on mining, could be in the spotlight at the top of the week.
2. Ebang International Holdings Inc. (NASDAQ: EBON)
Last week we discussed Ebang International as the company had just given a shareholder update outlining several key initiatives. The foremost focus is Ebang’s entry into the cryptocurrency-related business. The initial goal is to become a prominent blockchain company.
Last year Ebang was granted an exclusive license of the AsicBoost patent. This is a method that can increase the performance of Bitcoin mining by approximately 20%. “In February 2021, we completed the design phase of a chip for simultaneous Litecoin and Dogecoin mining. In March 2021, we completed the design phase of the 6 nm ASIC chip; and in April 2021, we launched our cryptocurrency exchange platform Ebonex,” explained Dong Hu, CEO and Chairman.
This year, the company has also set out to achieve several key milestones. These include the rollout of 6 nm ASIC chips and developing 5 nm ASIC chips. Ebang also aims to expand its cryptocurrency exchange operations. Also, the company looks to build crypto mining farms to mine Bitcoin, Litecoin, and, yes, Dogecoin. Given the excitement in this niche over the weekend, EBON could be on the list of cryptocurrency penny stocks to watch right now.
3. Sino-Global Shipping America Ltd. (NASDAQ: SINO)
Normally when you think of cryptocurrency stocks to buy, shipping companies don’t usually make the list. However, Sino-Global is unique in that aspect. Believe it or not, we aren’t talking about the company to emphasize momentum from “reopening efforts.” Today, SINO stock is on the list for its relationship to digital assets.
The last few quarters have seen the company expand its operations into cryptocurrency mining. It has been building its assets, including signing deals with power center companies and companies involved with non-fungible tokens (NFTs). The company even accepts Bitcoin as a form of payment for its shipping operations.
Late last month, Sino announced several digital asset-related updates, including a purchase agreement for over 1,700 digital currency operation servers. It also launched an NFT exchange to offer a digital asset exchange platform for this new trend in digital tokenization.
With the growing excitement for these types of speculative assets, SINO could be one of the shipping penny stocks to watch for a different reason right now. Furthermore, despite its lower volume pullback recently, SINO stock is still up over 130% in 2021.