Bitcoin Price Surge Helped Boost These Penny Stocks
Thanks to a surge in the price of Bitcoin, Dogecoin, and Ethereum, several penny stocks are heating up today. The early morning session on Friday saw the behemoth cryptocurrencies race to new third quarter highs. Helping give a bump, economic uncertainty and taper talks earlier in the week have traders looking for safe-havens. And, believe it or not, cryptocurrencies have become the new age gold bullion.
With this new gold rush has come a band of bidders looking to buy penny stocks with exposure to this digital arena. Everything from Bitcoin mining stocks to blockchain technology companies are gaining steam and for obvious reason. With this bump in momentum, it could be wise to start putting together a list of penny stocks that could benefit from Bitcoin’s rebound.
Bitcoin & Blockchain Penny Stocks To Watch
Adding more fuel to the fire was Coinbase (NASDAQ: COIN). The cryptocurrency exchange company said this week that it received approval to purchase over $500 million in digital currencies on its balance sheet. The company reported that it would invest 10% of all future profit in crypto. Chief Executive Brian Armstrong said that he expects this percentage “to keep growing over time as the cryptoeconomy matures.”
Coinbase joins a growing list of other companies adding bitcoin investing to their model. Earlier this year we saw other companies including Tesla (NASDAQ: TSLA) and Square (NYSE: SQ) do the same. Will this have a ripple effect (no pun intended) on some of these current & penny stocks today?
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SOS Limited (NYSE: SOS)
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DatChat Inc. (NASDAQ: DATS)
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Sphere 3D Corp. (NASDAQ: ANY)
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Bitfarms Ltd (NASDAQ: BITF)
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Hut 8 Mining Corp. (NASDAQ: HUT)
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Canaan Inc. (NASDAQ: CAN)
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Bit Digital Inc. (NASDAQ: BTBT)
Penny Stocks To Watch: SOS Limited (NYSE: SOS)
Those who’ve read our articles on Bitcoin stocks in the past are likely familiar with SOS Limited by now. The company’s shares have been tightly tied to the prices of cryptocurrencies in general. That’s because SOS conducts cryptocurrency mining operations. Over the last few months, the company has launched thousands of new mining rigs that mine both BTC and ETH.
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The company has also established partnerships with companies like Niagra Development to provide affordable power to sustain its mining operations. With the way that crypto is trading right now, SOS stock is one to watch. Like most of the names on this list, however, be mindful of the underlying cryptocurrency market. Since these stocks tend to move in kind, a drop in Bitcoin price, for example, can trigger a similar response for related stocks.
DatChat Inc. (NASDAQ: DATS)
This is one of the newer penny stocks to watch this month. We mentioned DATS stock earlier in the week as shares had just begun popping following a recent IPO. DatChat is on the blockchain tech side of the coin. The company utilizes blockchain, cybersecurity, and social media for its platform. DatChat offers users the ability to control chat messages and posts. Specifically, anyone with the chat app can delete messages and posts and be protected from anyone taking a screenshot of these messages before getting deleted.
While not much news has come from the company since its IPO, it hasn’t stopped speculative trading activity in the stock. Since the start of the week, DATS stock is up over 40% so far. The latest push above $5 comes on the heels of sympathy momentum in the cryptocurrency and blockchain industries.
Sphere 3D Corp. (NASDAQ: ANY)
Another cryptocurrency-related company we’ve discussed this week is Sphere 3D. The tech company began its foray into the digital currency world and hasn’t looked back. Earlier this summer, Sphere and Gryphon Digital Mining announced a merger. Since then ANY stock has gotten a nice boost thanks to optimism surrounding Bitcoin and other digital currencies. Since this merger is expected to close in the third quarter of 2021, timing has played its own additional role in speculation surrounding the penny stock.
This week, the company not only reported stronger year-over-year earnings, but it also struck a deal with Gryphon to buy another 250,000 Certified Emission Reductions. These will ultimately help support the combined company’s ESG commitments following recent plans to “substantially increase” cryptocurrency mining capacity.
If you’ve followed the Bitcoin mining saga this year, you’ll remember that the strain on the power grid caused some to distance themselves from Bitcoin mining, in general. Higher emissions as a byproduct of larger power requirements didn’t sit well with the ESG community. Now we see companies like Sphere & Gryphon finding ways to responsibly expand mining while also decreasing the environmental impact of doing so.
Former Penny Stocks To Watch: Bitfarms Ltd (NASDAQ: BITF)
Now to the list of former penny stocks to watch right now. Bitfarms was trading below $3 a share at the start of the month. After reaching a high of $7.47, BITF stock pulled back to where it is right now. Much of the excitement has obviously come from related momentum in digital currencies over the last few weeks. What’s more, the company’s recent earnings results revealed significant growth in both gross margin and adjusted EBITDA margin.
The company mined 759 Bitcoin and held just under 1,300 Bitcoin at the end of last quarter. It also received over 3,400 new miners during the quarter, which also helped increase its hash rate, overall. In simple terms, higher hash rates can increase a miner’s chance of “finding” the next block in a blockchain and receiving a Bitcoin reward.
Responding to the favorable results, Emiliano Grodzki, CEO of Bitfarms said, “From the beginning of 2021 through the end of 2022, we expect to have increased our capacity eight-fold and have expanded our geographic resources throughout North and South America while continuing to pursue opportunities elsewhere. We’ve commenced trading on Nasdaq, built out our leadership team with additions and promotions in Canada, the US, and South America, and capitalized on our infrastructure capabilities to build on our relationships and identify potential locations for expanding our geographic presence.”
Thanks to the latest move in Bitcoin and Ethereum prices, BITF stock is back on the watch list.
Hut 8 Mining Corp. (NASDAQ: HUT)
Similar to Bitfarms, Hut 8 also focuses on Bitcoin mining. In addition, the company is also experiencing significant growth. In its recent quarterly report, Hut 8 achieved its second consecutive record quarterly revenue. At the end of Q2, the company had more than 3,820 Bitcoin, which at today’s price is worth more than $180 million. Furthermore, based on its current network, the company anticipates mining 20-25 Bitcoin per day once all of its equipment is hashing.
Hut is also focused on an ESG initiative. It established a recycling program to limit waste and installed low-emission LED lighting in its facilities. Hut 8 also has put a fleet of electric vehicles on-site to further decrease emissions from related operations.
Canaan Inc. (NASDAQ: CAN)
Playing a different role in this ecosystem, Canaan manufactures the picks and shovels of the industry. The company is a Bitcoin mining machine manufacturer providing hardware to its clients. The most recent deal was with Mawson Infrastructure Group (OTC: MIGI), a digital infrastructure provider headquartered in Australia. Mawson’s order was for 17,352 bitcoin mining machines, which will be delivered throughout 2021 and 2022.
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This order was on top of an already existing order for more than 11,700 machines. While there wasn’t a valuation discussed in its press release, it is a significant order for Canaan and one that expands its global reach. Considering the surge in digital asset pricing and an uptick in mining operations as a whole, you can’t forget about the benefits to the entire supply chain; hardware providers included.
Bit Digital Inc. (NASDAQ: BTBT)
Similar to Hut 8, Bit Digital was also trading well below the $5 penny stock threshold earlier this quarter. Since then BTBT stock has skyrocketed to over $20 and currently sits above $10 this week. Mostly benefiting from sector sympathy, Bit Digital has been relatively quiet as far as news is concerned. However, headlines from earlier this quarter have kept the fire burning in the market. The company announced plans for a Bitcoin mining expansion with Digihost. The two will operate a 100 MW Bitcoin mining system for an initial 2-year term.
As previously announced, we anticipate significant purchase activity in the coming months, due to spot market dislocation in China and our unique access to that market. This agreement with Digihost secures a key component of activating this opportunity, and is expected to enable rapid deployment of newly purchased miners.
CEO Bryan Bullett
With an uptick in crypto prices this week, BTBT stock continues to benefit.
Is It Time To Buy Bitcoin Stocks?
Like all penny stocks (and former penny stocks) on this list, it’s important to watch cryptocurrency prices just as closely as the prices of these stocks. As we’ve come to find, a shift in Dogecoin, Bitcoin, Ethereum, etc. can send a ripple effect across the industry as a whole. So if any of these are on your watch list right now, make sure to keep that in mind.
