Avoid the Dogecoin Trap! Buy This 1 Bitcoin Stock Right Now Instead

Jitendra Parashar
·4 min read
Diagonal chain made of zeros and ones. Cryptocurrency and mining.

Dogecoin has become one of the hottest cryptocurrencies in the last few months. Its rising popularity has attracted many stock investors’ attention. The two software engineers founded Dogecoin nearly eight years ago to make fun of the wild speculation in the crypto market.

Let’s discuss why you should avoid investing your hard-earned money in highly volatile digital assets like Dogecoin.

Avoid the Dogecoin trap

Dogecoin’s logo has an image of the Shuba Inu dog breed that gained popularity several years ago due to the Doge internet meme. At the time of writing, Dogecoin had a market cap of over US$65 billion. Interestingly, it was significantly higher than the market cap of most Canadian publicly listed companies, including TC Energy, Canadian Imperial Bank of Commerce, and BCE.

I don’t consider this meme-based cryptocurrency worth investing in, as its high market volatility is enough to wipe out small investors’ portfolios within a few days.

Invest in this Bitcoin stock instead

I find blockchain technology really interesting and promising. However, Dogecoin might not be the right way to gain from it. While cryptocurrencies like Bitcoin and Ethereum could be a much better alternative to Dogecoin, their extreme volatility makes them unsuitable for small investors.

Investing in cryptocurrency mining stocks like Hut 8 Mining (TSX:HUT) could be another great way to get exposure to the surging cryptocurrency market.

Hut 8 Mining

Hut 8 Mining is one of the oldest and largest cryptocurrency mining companies in the world. It has its headquarters in Toronto, with its primary focus on developing blockchain infrastructure and Bitcoin mining data centres.

Hut 8 mined about 2,798 Bitcoin in 2020 — about 68% lower than the 8,618 Bitcoin in 2019. This resulted in a 50.4% drop in its revenue for the year to $40.7 million. In May 2020, the Bitcoin halving event took place that reduced the block reward to half around. This factor, along with a sharp decline in Bitcoin prices in early 2020, affected Hut 8’s Bitcoin mining.

On the positive side, analysts expect its revenue to rise by nearly 368% in 2021 to more than $190 million. Similarly, its adjusted net profit is expected to rise by about 460% this year to about $33 million with a solid bottom-line margin of 17.3%.

Buy its stock now

After posting a record high of near US$64,895, the Bitcoin prices have seen a correction in the last month. That’s one of the reasons why the shares of Hut 8 Mining have declined by 35% in the last 30 days. Bitcoin’s price could start soaring again in the coming months due to its rising utility across the world that could trigger a rally in Hut 8 stock. The company will announce its Q1 2021 results on Thursday.

Foolish takeaway

Despite its recent weakness, Hut 8 stock is currently trading with 61% year-to-date gains after posting solid 226% gains in 2020.

Its better-than-expected Q1 earnings and revenue could help its stock turn positive again. That’s why investors with a medium- to high-risk appetite may want to add its stock to their portfolio right now. Buying its stock for the long term seems to be a much safer option than directly buying meme-based cryptocurrencies like Dogecoin.

The post Avoid the Dogecoin Trap! Buy This 1 Bitcoin Stock Right Now Instead appeared first on The Motley Fool Canada.

Looking for SAFER HIGH-GROWTH TECH STOCKS? Here’s a FREE LIST for you:

Looking for the Next Potential Netflix? We’ve Got You Covered with These 3 Free Stock Picks

Motley Fool Canada's market-beating team has just released a new FREE report that gives our three recommendations for the Next Gen Revolution.
Click on the link below for our stock recommendations that we believe could battle Netflix for entertainment dominance.

Click Here to Get Your Free Report Today!

More reading

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

5 Years From Now, You’ll Probably Wish You’d Grabbed These Stocks…Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. You aren’t on the list to receive our newest stock picks — but it’s not too late. 2021

  • Up next
  • Up next
  • Up next
  • Up next

Latest Stories

  • TikTok may be banned in the US. Here's what happened when India did it

    NEW DELHI (AP) — The hugely popular Chinese app TikTok may be forced out of the U.S., where a measure to outlaw the video-sharing app has won congressional approval and is on its way to President Biden for his signature. In India, the app was banned nearly four years ago. Here's what happened: WHY DID INDIA BAN TIKTOK? In June 2020, TikTok users in India bid goodbye to the app, which is operated by Chinese internet firm ByteDance. New Delhi had suddenly banned the popular app, alongside dozens o

  • Household Cavalry horses bolt through central London smashing into vehicles and leaving soldier injured

    WARNING: Article contains footage some readers may find distressing

  • German debt ratio likely to rise slightly in 2024 - finance ministry

    The German debt-to-GDP ratio is likely to rise slightly this year but then fall steadily until 2028, the finance ministry said on Wednesday. The ministry expects the debt-to-GDP ratio at 64% in 2024, according to projections for the EU Commission, which were approved by the cabinet on Wednesday. In 2023, the debt-to-GDP ratio was at 63.6%.

  • Spanish men using self-ID gender law to access female care services

    Spanish feminist organisations have raised the alarm about abuses of the country’s ultra-liberal self-identifying gender law, pointing to cases in which men with a history of abuse are switching gender to access services reserved for female victims of violence.

  • Nepal asks visiting Qatari emir to help free Nepali student held hostage by Hamas

    Nepal's president asked the emir of Qatar, who is on a two-day visit to the South Asian country, to help release a Nepali student held hostage by Palestinian militant group Hamas, officials said on Wednesday. President Ram Chandra Poudel met with Sheik Tamim bin Hamad Al Thani at the president’s house in the capital, Kathmandu. Al Thani said he would do everything possible to help release Bipin Joshi, the Nepali president’s press advisor, Kiran Pokharel, told The Associated Press.

  • Rescue and clean up efforts after floods hit China

    STORY: Video from Chinese state-run media showed buildings submerged in water while rescuers in bulldozers cleared debris in streets, after floods swamped cities in southern China's densely populated Pearl River Delta.The province, once dubbed the "factory floor of the world”, is prone to summer floods. Its defenses against disruptive floods were severely tested in June 2022 when Guangdong was pounded by the heaviest downpours in six decades.Since Thursday (April 18), Guangdong has been battered by unusually heavy, sustained and widespread rainfall, with powerful storms ushering in an earlier-than-normal start to the province's annual flooding season in May and June. Rains are expected to affect Guangdong for the rest of April.

  • Migration and trauma explored in shortlisted Women’s Prize For Fiction novels

    Now in its 29th year, the prestigious prize is open to original fiction written in English by women from anywhere in the world.

  • Stock market today: Global shares track Wall Street rally, led by a 2.4% jump in Tokyo

    HONG KONG (AP) — World shares advanced Wednesday, led by a 2.4% rally for Tokyo’s benchmark Nikkei 225 index that was powered by strong gains for semiconductor makers. European markets opened higher. Germany’s DAX was up 0.4% to 18,200.49 and the CAC 40 in Paris edged less than 0.1% higher to 8,109.21. In London, the FTSE 100 rose 0.4% to 8,078.50. The future for the S&P 500 was up 0.2% and that for the Dow Jones Industrial Average was virtually unchanged. In Asian trading, Japan’s benchmark Nik

  • Prince Louis' birthday photos all have this in common – did you notice?

    Prince William and Princess Kate's son, Louis, celebrated his sixth birthday with a new photo - and Kate Middleton has a habit of including the same detail in the annual portrait

  • TV show win is great for business, say B&B owners

    The owners and manager of The Bumble Barn are already seeing the benefits of winning Four in a Bed.

  • Volkswagen aims to maintain 15% market share in China in 2030, country chief says

    Volkswagen aims to preserve its market share in China at about 15% in 2030, the head of its China business said, betting heavy investment there will help it maintain its competitiveness against local electric vehicle (EV) rivals. Volkswagen ceded its title of best-selling car brand in China to Chinese EV giant BYD in late 2022, and the group's market share in China fell to 14.5% last year from 19.3% in 2020 as combustion-engine sales declined. Group board member and China chief Ralf Brandstaetter told reporters Volkswagen was confident it could maintain or slightly increase this share.

  • A third Whataburger in Charlotte? Records show latest expansion for Texas burger chain

    The Texas burger chain is rapidly expanding in the Carolinas.

  • Army horses on the loose bolt through central London

    A number of soldiers and horses were hurt in the incident on Wednesday morning.

  • PMQs - live: Angela Rayner set to clash with Oliver Dowden amid council house row

    Battle of the deputies as Dowden and Rayner set to clash at PMQs

  • Volkswagen revamps its approach in China in bid to overtake upstart EV makers

    BEIJING (AP) — As auto giant Volkswagen AG races to catch up with upstart Chinese competitors, it has drivers like 26-year-old Ren Yiling in mind. She is young and wants to play video games in her car. The digital features of her Zeekr 001, a European-designed electric car from China's Geely Holding Group, appeal to her. She uses her smartphone to help her parents adjust their seats and tells an animated voice assistant to open the window or play music. “I once sung karaoke in the car when trave

  • Watch: Boeing 737 makes emergency landing after wheel explodes

    A Boeing 737 was forced to make an emergency landing in South Africa on Sunday after one of its wheels came off shortly after takeoff.

  • I’m An Emergency Physician. Here’s How Dangerous This Supreme Court Abortion Ruling Could Be.

    The high court will hear arguments to determine whether some states can ban abortions even in emergency situations.

  • 10 Kitchen Items You Need To Toss Out ASAP

    Its time to make space in your kitchen.

  • Hugh Grant reveals Bridget Jones 4 has 'a lot of heart'

    The Notting Hill actor played Bridget's on-off love interest Daniel Cleaver in 2001's Bridget Jones's Diary and the 2004 sequel, The Edge of Reason. However, he opted out of the third film, 2016's Bridget Jones's Baby, and Daniel was seemingly killed off, but a teaser at the end revealed he had survived a plane crash, allowing Grant to return. When asked why he signed up for Bridget Jones: Mad About the Boy, he told Access Hollywood, "Because it's a really good script... This one has a lot of heart as well as being very funny.

  • Q1 2024 Preferred Bank Earnings Call

    Q1 2024 Preferred Bank Earnings Call