• Trading View

Blockchain Penny Stocks to Watch in 2020

Chris Dios - October 24, 2019

Bitcoin Stocks Currency

Bitcoin blew up the stock market in 2017 but, since then, the crypto craze has cooled. However, there’s no stopping blockchain, the technology behind bitcoin.

This technology has the potential to transform the world we live in, and the best blockchain penny stocks are hoping to capture a chunk of that market share. Here are some of the bitcoin penny stocks:

  • 1. Riot Blockchain Inc. (NASDAQ: RIOT)
  • 2. HIVE Blockchain Technologies Ltd. (OTC: HVBTF)
  • 3. DMG Blockchain Solutions Inc. (OTC: DMGGF)
  • 4. Cryptanite Blockchain Technologies Corp. (CRBTF)

Many of these companies had a rough 2019, but swinging bitcoin sentiment has affected valuations. The plus side is, you can get these stocks for a lot cheaper than you would’ve been able to just a year or two ago.

From a value perspective, these companies have more investment potential than they did at the peak of the crypto craze. Here are our picks for the most interesting opportunities in blockchain penny stocks for 2020.

Bitcoin is commonly referred to as ‘digital gold’ but it’s not as stable as the real thing. Gold is a great Safehaven investment that can be a hedge against volatility and inflation.

US E-Cigarette Ban Stokes Fears Trump Could Target Bitcoin

Best Blockchain Penny Stocks

Here are the top penny stocks in the blockchain sector. For more cheap penny stocks, be sure to check out our monthly rankings.

If your budget is a little bigger, check out our best stocks under 10 dollars here.

If you’ve never traded penny stocks before, you should do some research first. You can find everything you need to know about penny stocks in our trader education articles.

Learn how to invest in penny stocks here, and don’t forget to check out our best penny stocks monthly rankings.

Riot Blockchain Inc. (NASDAQ: RIOT)

Riot operates the largest crypto mining network of any publically-listed company. Its Oklahoma City mining operations include Bitcoin, Bitcoin Cash, and Litecoin.

Additionally, Riot develops blockchain technology and it has made several investments in crypto-related technologies. The firm’s portfolio of crypto startups includes Coinsquare, Tesspay, and Verady.

blockchain mining rig
Hive has the largest crypto mining network of any publically-listed company. Above: HIVE Blockchain crypto-mining rigs.

This stock tends to move in the same direction as the price of Bitcoin because of its massive mining operation.

When Bitcoin goes up, Riot makes more money, so it’s understandable why share prices tend to follow the crypto market. However, its asset portfolio and blockchain development business provide additional revenue streams for the company.

HIVE Blockchain Technologies Ltd. (OTC: HVBTF)

Formerly known as Leeta Gold Corp, HIVE operates several blockchain-related businesses.  Based in Canada, HIVE partners with other blockchain companies to operate its flagship businesses.

The company partners with Genesis Mining Ltd. – the world’s largest cloud bitcoin miner (according to HIVE’s website) – to operate a crypto mining facility in Iceland. HIVE’s Icelandic mining operation primary produces Ethereum.

The company is also deploying blockchain mining rigs in Sweden and Norway.

HIVE seems to be maturing into a profitable company, despite falling Bitcoin prices. It recently reported a healthy financial quarter of positive cash flow.

If HIVE is profitable with crypto at such low prices, it could be a big winner if the prices pick up.

DMG Blockchain Solutions Inc. (OTC: DMGGF)

DMG is another Canadian-based blockchain services company. The firm operates several blockchain businesses, including mining, and it’s developing creative ways to monetize its blockchain assets.

It even leases bitcoin mining capacity and hosting to other blockchain developers. Taking a page from the cloud computing sector, DMG calls this option “Mining-As-A-Service” or MAAS.

The company purchased Blockseer in 2018. Blockseer is one of the leading blockchain audit and analytics platforms.

Its technology helps promote a more open and legitimate blockchain environment, these services could be in high demand as regulators attempt to tame the crypto market.

cryptocurrency infrastructure
DMG recently launched a blockchain network for cannabis supply chains. Above: part of DMG’s blockchain infrastructure.

If one overhyped asset class isn’t enough, DMG must have figured that two would really break the bank.

In September 2019, the company launched Wazabi, the first-ever AI-powered blockchain solution for cannabis supply chains. Share prices jumped 12% when the news broke.

Cryptanite Blockchain Technologies Corp. (CRBTF)

This is one of only consumer-oriented blockchain stock on our list. Cryptanite owns and operates ChargaCard, a p2p payment processing network that is developing end-to-end payment solutions.

Company statements say it’s designing “next-generation decentralized applications for mass-market adoption”.

Cryptanite also offers a p2p trading network that’s available on Google Play and Apple App Store.

The Cryptanite app allows users to purchase various digital tokens, including Bitcoin and Ethereum, and deposit them into digital wallets that are built into the app.

Since the network is peer-based, the company never acts as a custodian of funds so, theoretically, it’s less susceptible to hacking than a typical, centralized exchange.

Best Stocks Under 10 Dollars

Are penny stocks a little too speculative for your tastes? Then check out our monthly rankings for the best stocks under 10 dollars. These stocks are still cheap, but they are a bit more stable and the companies are usually more established.

What is Blockchain?

Blockchain is a technology that uses cryptography to create a decentralized network for storing and transmitting information.

Decentralized systems are less susceptible to attacks from hackers and it’s much harder to manipulate data. Here’s an example that can help you understand blockchain technology.

blockchain penny stocks
A basic infographic describing the inner-workings of blockchain technology.

Centralized Systems

Bill and I are accountants. We both are in charge of the books for our company. There’s only one book that has a full account of all the business transactions.

Bill gets greedy and wants to cook the books to pull money out of the company. If he manipulates the books, I might not be able to figure out why the numbers are off.

All he has to do is change the records in the accounting book to hide the money he stole.

In order to figure out exactly what’s wrong, I have to do a full audit of the business’s accounts, receipts, bank statements, and all other financial transactions just do determine what went wrong and where it happened.

This example is similar to a centralized system that holds data all on one server.

When everyone is referencing one set of data in one place, it can be easily manipulated if the proper security procedures aren’t in place.

Decentralized Systems (Blockchain Networks)

It’s the same scenario as before. Bill and I are accountants, and Bill gets greedy.

This time, we each have our own set of accounting books that we update as transactions come in. If Bill changes something in his book, all I have to do is look at mine to see what’s different.

Bill would have to break into my desk, steal my copy of the ledger, and change the data to match his in order to hide his deceit. That makes things a lot more complicated for any would-be thief.

Now imagine a million copies of the books that are constantly updated with actual transaction data. There’s no way Bill can break into a million desks and alter the data in a million different accounting books.

The transparency and decentralized nature of the network make it makes it less inherently vulnerable to manipulation.

This is a very basic description of blockchain networks, but it’s the core premise of the technology.

Blockchain: Not Just For Crypto

Newcomers to the crypto space often confuse blockchain and bitcoin, but cryptocurrency is only one use of this decentralized network technology.

Blockchain networks can track virtually real-world objects, personal data, and virtually anything else you can think of. The technology could transform the way businesses track assets, monitor supply chains, and much more.

Blockchain could be a gamechanger for virtually every corner of the economy. The public, private, and military sectors all want to master this technology, so mass adoption could fuel torrential growth in this niche industry.

Closing Thoughts

Blockchain technology has a long way to go before it adopted on a mass scale, but these companies are making progress. A small speculative investment now could pay off big time if the technology takes off.

These blockchain stocks could be ready to make a comeback in 2020.

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Chris Dios is an American writer and entrepreneur based in the Greater NYC area.

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