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HIVE Blockchain Technologies Is A Compelling Under-the-Radar Crypto Play

Investors who appreciate the fast pace of Bitcoin (XBT) and Ethereum (ETH) will like HIVE Blockchain Technologies (HVBTF). This stock can serve as a proxy for accounts that do not permit cryptocurrency trading, such as some retirement accounts.

HIVE is involved in green energy, which is a red-hot market in 2021. Plus, HIVE now has a DeFi (decentralized finance) angle, which could enhance the company’s shareholder value even further.

A Quick Look At HVBTF Stock

Recently, HIVE’s stock has experienced lightning-fast price action.

As recently as January of 2020, HVBTF stock was available for just 9 cents. It then soared to a 52-week high of $5.75 in February 2021. However, the share price has retraced to the $3 range since that time. (See HIVE stock analysis on TipRanks)

This sector is prone to bouts of extreme volatility, so investors should be cautious. A small position in the stock could yield substantial returns – just make sure that you’re wearing your seat belt, as it could be a wild ride.

A Green Energy Blockchain Leader

Is it possible to invest in cryptocurrency mining and consider ESG (environmental, social and governance) factors at the same time? Cryptocurrency mining is notorious for using tremendous amounts of energy. Yet HIVE’s investor presentation confirms its commitment to clean, responsible crypto mining.

HIVE conducts its crypto mining operations in cold climates because it is power-efficient, and therefore cost-efficient. The company mines for Ethereum and Bitcoin in Sweden, Iceland and Canada – some of the coldest regions in the world.

This has contributed to improved profitability, with HIVE going from adjusted EBITDA of -$5 million in fiscal year 2019 to $7.8 million in fiscal year 2020. 2020 was the first year in which HIVE achieved profitability, and it has grown from there.

Additionally, all of HIVE’s cryptocurrency mining facilities have been powered by green energy from day one. Further proving its commitment to going green, the company just acquired a massive data center in Canada with access to 50 megawatts of low-cost green power.

Expanding Into DeFi

Along with the company’s robust yet clean mining operations, HIVE is moving aggressively into the DeFi (decentralized finance) space. DeFi refers to financial applications built on blockchain technologies, which are meant to disrupt the traditional world of finance.

The company is not building its own DeFi business from scratch, which would be a costly and time-consuming project. Instead, HIVE is engaging in a share swap with decentralized finance asset manager DeFi Technologies Inc. (DEFI).

As a result of the share swap, HIVE will own around 5% of DeFi Technologies’ outstanding common shares, while DeFi Technologies will own roughly 1% of HIVE’s outstanding common shares.

This partnership, according to the press release, will “provide HIVE with a strategic stake in DeFi Technologies and a broader partnership surrounding the DeFi ecosystem with a specific focus on the Ethereum based MEV space and developments surrounding it.”

MEV refers to the amount of profit that cryptocurrency miners can extract from reordering and censoring transactions on the blockchain. In other words, this transaction will not only diversify HIVE’s business, but could also enhance HIVE’s profit potential as a cryptocurrency miner.

Weighing All Of The Factors

Looking at its TipRanks Smart Score, which is derived from 8 unique data sets, HIVE earns a 5. That means it is likely to perform in line with market averages.  

Takeaway

For HIVE Blockchain Technologies and its shareholders, the deal with DeFi Technologies sounds like a win-win. Investors who are in the market for an ultra-efficient cryptocurrency miner with an ESG angle should find it in HIVE.

To find other compelling plays in this fast-growing space, check out the Cryptocurrency Stock Comparison tool on TipRanks.

Disclosure: On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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