Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Will HIVE Blockchain (TSX:HIVE) Stock Ever Recover?

Stock MarketsJul 20, 2021 13:45
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
Will HIVE Blockchain (TSX:HIVE) Stock Ever Recover?

At the time of writing, Bitcoin has dropped below US$30,000. The cryptocurrency has effectively wiped out all its 2021 gains. That’s bad news for BTC miners like Hive Blockchain Technologies (TSXV:HIVE). Unsurprisingly, HIVE stock is down 64% from its all-time high in February. Investors who caught the crypto ride late are now sitting on serious losses.

Will HIVE Blockchain and Bitcoin ever recover? Here’s a closer look.

Bitcoin cycles Bitcoin has been around for 12 years now, which means its cyclicality is well-known. The token is prone to multi-year boom-bust cycles. Every boom takes the price of each token to new highs, but every bust is shallower than the previous one. In fact, Bitcoin sets a new floor in every cycle.

From 2016 to 2017, the price of each BTC rose from roughly US$1,000 to US$19,000. When the bubble burst, Bitcoin dropped precipitously and stayed range-bound for several years. However, it never dropped below US$3,000. A higher floor had been set.

In this recent cycle, the price of each token reached a peak of US$63,000 earlier this year. It has lost over half its value since then. However, most veteran investors and industry experts don’t believe the price will ever reach close to US$3,000 again. That’s because a new batch of permanent holders has been added to the network over the past year. A higher floor has been set.

Mainstream adoption Signs of mainstream adoption are everywhere. Exchange-traded funds (ETFs) in Canada, such as Purpose Bitcoin ETF (TSX:BTCC.B), have attracted hundreds of billions of dollars in investor capital. Several ETFs are pending approval in the United States, which could prove to be even popular.

Hedge fund billionaires such as George Soros and Steven Cohen have recently entered the market too. They’ve been approved to buy or trade cryptocurrencies, alongside other institutional investors.

In short, investors with very deep pockets and extremely long time horizons have now entered the market for Bitcoin, putting a floor on the price and supporting the business model of BTC mining.

HIVE stock While Bitcoin’s popularity and growing adoption are great for HIVE Blockchain in the long run, the company also has several positive catalysts in the near term. China’s clampdown on Bitcoin miners has effectively eliminated more than half the industry’s competition.

Mining Bitcoin is now easier and much more profitable than it was just a few months ago. HIVE could be set for a record quarter, despite the lower market value of BTC.

Long-term investors should keep an eye on Bitcoin’s growing adoption and mainstream usage. The next boom cycle could push the value of this cryptocurrency much higher. By then, HIVE stock may have fully recovered.

Bottom line Bitcoin’s price is cyclical, which means it could recover over the long term. Meanwhile, HIVE Blockchain faces less competition and greater profitability in the near term. This could be an opportunity to add the growth stock to your portfolio.

The post Will HIVE Blockchain (TSX:HIVE) Stock Ever Recover? appeared first on The Motley Fool Canada.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned.

This Article Was First Published on The Motley Fool

Will HIVE Blockchain (TSX:HIVE) Stock Ever Recover?
 

Related Articles

TSX Today: 4 Things to Watch for on September 27
TSX Today: 4 Things to Watch for on September 27 By The Motley Fool - Sep 27, 2021

The S&P/TSX Composite Index, the main Canadian stock market performance gauge, took a breather on Friday last week after losing 59.27 points to close 0.29% lower at the...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email