Cryptocurrencies are all the rage lately. So it’s no surprise investors are taking a closer look at related penny stocks. I get the appeal. These small, lesser-known companies offer a way to get in on cutting-edge blockchain tech on the cheap. A chance to find a diamond in the rough before it hits the big time.
But investing in penny stocks is definitely not for the risk-averse. Share prices go up and down with the latest Bitcoin news and internet hype. While the potential for major gains is there, these stocks can also plummet fast without much warning. It’s definitely a rollercoaster ride you’ll need a strong seatbelt for.
My two cents? Tread carefully. Start by making a list of multiple penny stocks to watch. That’s so if one company’s face-planting, it won’t tank your watchlist. Also, make sure to do your homework. Look at financial statements, read industry publications, and learn about the technology and companies. Keep an eye on market sentiment too – it shifts quickly in crypto land. Patience and care are vital. This is a long-term game with wild swings in between.
Bitcoin News & Bullish Breakouts
As we know, “Crypto Winters” are a real thing. They can see long bouts of bearishness in the crypto market. That can translate quickly into crypto and blockchain penny stocks. On the other hand, when Bitcoin prices are jumping, chances are, there are several catalysts to be on watch for.
Expectations of approval for Bitcoin ETFs have intensified. Meanwhile, Bitcoin gained as much as 3.6%. This anticipation has brought Bitcoin to an 18-month high as the SEC has a six-day deadline to approve or deny ETFs starting today.
In addition, legislative Bitcoin news headlines are also playing their part. The proposed “Keep Your Coins Act” by Senator Ted Budd, which aims to protect the rights to self-custody crypto assets, might be viewed as a step towards more favorable regulation, potentially increasing investor confidence.
All-in-all, BTC prices are surging. As a result, momentum is building up in crypto and blockchain penny stocks. In this article, we look at a handful of the most active penny stocks today that could be benefiting from this move. The thing to remember with crypto trends is that sentiment can shift quickly depending on the price of the currencies themselves.
Penny Stocks To Watch
- Hut 8 Mining (NASDAQ: HUT)
- CleanSpark (NASDAQ: CLSK)
- Bit Digital, Inc. (NASDAQ: BTBT)
- Bitfarms (NASDAQ: BITF)
Hut 8 Mining (HUT)
Hut 8 Mining Corp. is a digital asset miner that specializes in high-performance computing infrastructure. Other than the sympathy sentiment in the stock market this week, HUT stock has also benefited from increased attention after releasing news.
Hut 8 announced progress on its all-stock merger with USBTC, set to create Hut 8 Corp. They aim for economical Bitcoin mining and diversified revenue, with a focus on ESG practices. Regulatory approvals and USBTC stockholder assent are pending. Hut 8 operates data centers and Bitcoin mining sites in Canada, priding itself on a robust Bitcoin treasury.
The news also comes shortly after its latest mining update for October. Jaime Leverton, CEO of Hut 8 explained, “Between being granted approval to submit a stalking horse bid for approximately 310 MW of natural gas power plant assets in Ontario, including our former North Bay site, and our work to close our proposed business combination with US Bitcoin Corp., we are making headway toward creating a new Hut 8 that we believe will have vertically integrated mining operations with revenue generating optionality; diversified fiat revenue streams in high performance computing, hosting, and managed services; and a significant North American footprint, which would position us well to capture upside as we head into the next halving.”
CleanSpark, Inc. provides advanced software, controls, and technology solutions. It also mines Bitcoin and is coming off of a milestone acquisition. Last month, it purchased 4.4 EH/s Antminer S21 bitcoin mining machines.
“Integrating the S21 into our mining operations is in line with our commitment to using the most efficient mining technology,” said Zach Bradford, CEO. “The efficiency of the S21 should not only increase our capacity but should also drive down energy costs per bitcoin mined, enhancing our competitive edge within the global mining landscape. Importantly, our scale has positioned us with strong bitcoin production at solid margins, and as a result we expect to fund the majority of the purchase through operating cashflows.”
CleanSpark released an update this week on their Bitcoin mining operations for October 2023. The company mined 633 Bitcoin, thereby increasing its total Bitcoin holdings to 2,311. Additionally, it reported that the hashrate surpassed 10 exahashes per second (EH/s) during the month, which is a significant computational power indicating an enhanced mining capacity.
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Analysts covering the penny stock include JPMorgan (Overweight, $5.50 target), Cantor Fitzgerald (Overweight, $10 target), Chardan Capital (Buy, $11 target) and HC Wainwright (Buy, $14 target).
Bit Digital, Inc. (BTBT)
Bit Digital, Inc. is a New York City-based company. They specialize in digital asset infrastructure and cloud computing. Their operations span the US, Canada, and Iceland.
In the recently published October 2023 update, Bit Digital reported producing 111.6 BTC, marking a 14% decrease from the previous month. This decline was attributed to several factors, including increased network difficulty and a mandatory maintenance outage. Additionally, there was a relocation of miners due to the end of a hosting agreement.
The company’s treasury held 511.1 BTC and 16,022.5 ETH. These had a fair market value of about $17.7 million and $29.1 million, respectively. The BTC equivalent of their digital asset holdings was approximately 1,394.4, or around $48.3 million. Furthermore, Bit Digital had cash and cash equivalents totaling $24.4 million.
In the realm of Proof-of-Stake (PoS), Bit Digital had around 12,752 ETH staked. This was in both native and liquid staking protocols. Of this, 12,352 ETH were natively staked, and 400 ETH were in liquid protocols. The company earned a blended Annual Percentage Yield (APY) of roughly 4.25% on its staked ETH in October 2023. The total staking rewards for the month amounted to approximately 46.08 ETH.
Bit Digital has diversified its operations beyond bitcoin mining. They have established Bit Digital AI. This new business line provides specialized cloud-infrastructure services for AI applications.
Bitfarms Ltd. is a Bitcoin mining company. They are vertically integrated and based in Toronto and Brossard, Québec. In Q3 2023, Bitfarms reported revenues of $35 million and a net loss of $19 million. Their operations saw an increase in hashrate and mining capacity, reaching 6.1 EH/s. They also initiated a Synthetic HODL™ strategy with the purchase of BTC call options, boosting their treasury BTC holdings to 760 BTC.
The financial results of Q3 2023 reflected a steady revenue of $35 million, identical to Q2 2023, with a reduced net loss from the previous quarter. Gross mining profit and margin slightly decreased. Bitfarms sold 1,018 BTC, repaid equipment-related debt, and raised funds through an equity offering program. The company maintained a strong liquidity position with significant cash and BTC holdings and executed strategic purchases and miner installations to enhance production capacity.
These details suggest a company actively managing its resources amid the volatile crypto market. The expansion and upgrade of mining capabilities signal a forward-looking approach. However, the net loss indicates the financial challenges of maintaining profitability. For investors, the bullish case would focus on expansion and diversification, the bearish case on the net losses and operational costs, and the balanced case would weigh these aspects to assess the potential impact on Bitfarms’ stock performance.