4 Cryptos I Wish I’d Bought Last Year
These cryptos have all seen gains of more than 3,000%.
Hindsight is a wonderful thing. With the benefit of hindsight, I’d have bought Bitcoin (BTC) back in 2009 and now be sipping mojitos on a Caribbean island. But unfortunately, we can’t invest with hindsight, and having too many mojitos is bad for your health.
It is interesting to look at how certain tokens have performed in the past year, not least because it reminds us of the extraordinary growth the whole industry has seen. It can help us spot useful trends for the future, and identify market segments worth following.
Here are four coins I’d have bought – or bought more of – on October 1, 2020 with the benefit of hindsight. If you’d bought $1,000 of each, you’d own over $250,000 worth of cryptocurrency today. Not only have they seen significant gains, but they also have strong long-term potential.
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The super-fast smart contract cryptocurrency has astonished commentators in recent months, hitting all-time high after all-time high. Smart contracts are tiny pieces of self-executing code that take blockchains to a whole other level. Rather than simply recording transactions, smart contracts live on the blockchain and act automatically when certain conditions are met.
Ethereum (ETH) was the first smart contract platform, but is struggling with high transaction costs and network congestion. It is working on an upgrade to Eth2, but until then, there’s fierce competition among Ethereum alternatives like Solana to take market share.
Solana has gained over 4,800% since this time last year. Or, to put it another way, if you’d bought $1,000 worth of SOL a year ago, it would be worth almost $50,000 today.
Terra has gained over 12,000% in the past year, catapulting it into the top 50 cryptocurrencies by market cap. Terra is one of the leaders in what are called algorithmic stablecoins. Stablecoins avoid the volatility we see in normal cryptocurrencies, because their value is pegged to another commodity – like gold or the U.S. dollar.
Some, like USD Coin (USDC), are fiat-backed stablecoins. This means that for every USDC issued, there should be $1 in reserve to support the token. Terra’s coins – including Terra U.S. Dollar (UST), Euro (EUT), and Canadian Dollar (CAT) – work differently. They are supported by a pool of LUNA tokens which an algorithm-driven smart contract buys or sells to keep prices in line.
While I’m concerned about the potential impact of regulation on the stablecoin market, Terra’s dramatic growth makes it a coin I wish I had in my portfolio right now.
Like Solana, Fantom is a smart contract crypto platform. What sets it apart is that it uses something called a directed acyclic graph (DAG), which allows for processing transactions in parallel and makes the system more scalable.
It’s also seen huge returns – FTM has risen over 3,000% in the last year. On Oct. 1, 2020, 1 FTM was worth $0.0386, and it’s now trading at $1.21.
If I had a time machine, I’d go back and buy all the cryptos with smart contracts I could find, even though there’s a good chance that only four or five will eventually come out ahead. But smart contracts are simply one of the most exciting parts of blockchain technology. They power the booming decentralized finance (DeFi) industry and the popular world of digital collectibles in the form of non-fungible tokens (NFTs).
Broadly speaking, there are two ways cryptos solve the problems facing older cryptocurrencies like Bitcoin or Ethereum. Either they start from scratch and build a new, improved, blockchain, or they create what’s called a “layer 2” solution, which sits on top of the existing blockchain and processes transactions faster and cheaper.
Polygon is a popular layer 2 solution. It’s unusual because it doesn’t offer just one option – it is a scalability solution aggregator. Developers can choose the route that works best for them. Its price has increased over 5,500% since last year.
Looking to the future
I don’t have a crystal ball, so I can’t tell you which cryptos – if any – might produce similar returns in the future. The coins above are all available from top cryptocurrency apps and exchanges, but bear in mind that these massive gains are no guarantee of future performance.
The cryptocurrency market is notoriously volatile and unpredictable, which is why it’s advisable to only invest money you can afford to lose. But one trend that may be worth watching in the year to come is adoption.
Ethereum may be slow and expensive, but it still hosts the lion’s share of applications because people are used to using it. With so many coins jostling for position and so many different technological solutions, the next stage will be to see which ones can attract significant numbers of users. So, if you’re looking for a way to differentiate one project from another, you might consider the number of projects running on each platform, and the number of developers using it.
If You Invested $1,000 In Riot Blockchain Stock One Year Ago, Here’s How Much You’d Have Now
Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 ETF Trust (NYSE: SPY) total return over the last 12 months is 31.8%. But there is no question some big-name stocks performed better than others along the way.
Riot’s Big Run: One company that has been an excellent investment in the last year has been Bitcoin (CRYPTO: BTC) mining stock Riot Blockchain Inc (NASDAQ: RIOT).
Unlike many other companies, the COVID-19 pandemic in 2020 didn’t hurt Riot’s business. In 2019, Riot reported a $20 million net loss on $6.84 million in revenue. In 2020, its net loss shrank to $12.6 million and revenue grew to $12 million.
In fact, economic shutdowns around the world facilitated a broad shift from cash toward digital payments, creating a tailwind for Riot and other cryptocurrency stocks. The more than $6 trillion in U.S. government stimulus measures also triggered concerns over rising inflation levels.
As a result, cryptocurrency prices soared, which was great news for Riot’s Bitcoin mining business. Riot owns 2,243 BTC, owns a fleet of 24,000 Antminer rigs and has a total hash rate capacity of 2.4 exahashes (2.4 billion billion hash calculations) per second.
At the beginning of 2020, Riot was trading around $1.14. By the beginning of March, the stock was still trading at $1.16 as news of the virus spreading in China prompted concerns about a U.S. pandemic. On March 15, Riot plummeted to its pandemic low of 51 cents as global stock markets tanked.
The good news for Riot investors is that the stock bounced off that level as the S&P 500 began to stabilize and the government started printing money.
By April 6, Riot shares were back over $1.00. By mid-December, surging crypto prices send Riot shares over the $10 level.
Related Link: If You Invested $1,000 In ChargePoint Stock One Year Ago, Here’s How Much You’d Have Now
Bitcoin In 2021, Beyond: Fortunately for Riot investors, new multi-year highs were just the beginning.
On Jan. 19, 2021, influential Tesla Inc (NASDAQ: TSLA) CEO Elon Musk added #Bitcoin to his Twitter bio and tweeted “In retrospect, it was inevitable.” On Feb. 8, Tesla announced it had purchased $1.5 billion in Bitcoin and would begin accepting it as payment for Tesla vehicles.
The Tesla news sent Riot shares skyrocketing to as high as $79.50 on Feb. 17.
Bitcoin pulled back significantly since that peak after Musk reversed course in May and said Tesla would no longer be accepting payment in Bitcoin due to the negative environmental impact of Bitcoin mining. Riot shares dropped back to as low as $20.68 in May.
Bitcoin prices have recently rebounded back above $50,000, but Riot shares have continued to struggle to make new highs, recently trading at $25.73.
Still, Riot investors who bought one year ago and held on have generated huge returns on their investments. In fact, $1,000 in Riot stock bought on October 5, 2020, would be worth about $9,985 today.
Looking ahead, analysts are expecting more gains for Riot in the next 12 months. The average price target among the five analysts covering the stock is $50, suggesting 94% upside from current levels.
Here’s a Top Bitcoin Mining Stock to Buy Now
Bitcoin’s (CRYPTO:BTC) soaring share price – up more than 357% in the past 12 months – has driven a huge increase in interest in mining the coin for profit. Unfortunately, there’s one big hurdle for those who’d like to get in on the action: The cost of the machines used to mine coins runs about $16,000 each – and it’s not as if you need just one of them.
But investors don’t have to lay out a small fortune to start mining. What’s much more accessible is investing in Bitcoin mining companies that already have rigs set up. One such promising venture is Hut 8 Mining (NASDAQ:HUT), which has soared by more than 1,000% in the past year.
Why Hut 8 Mining?
Much of Hut 8’s appeal lies in its plans to scale up its mining operations to perform 2.5 quintillion guesses per second – a measurement known as the hash rate – in search of the mathematical solution needed to mine a new block on Bitcoin’s blockchain. This equates to 1.78% of the network’s hash rate and is a huge improvement over Hut 8’s 1 quintillion (an exahash) per second hash rate last year. The company mines between 12 and 18 Bitcoins per day, worth between $518,000 and $778,000 at recent Bitcoin prices.
During the second quarter of 2021, Hut 8’s revenue increased by a stunning 263.5% from a year earlier to $33.55 million Canadian dollars. At the same time, its operating income increased by 230.2% to CA$8.12 million.
Right now, it owns about 4,450 BTC, valued at about $219.5 million, but unlike other miners, it doesn’t plan on simply selling them as soon as possible. To maximize shareholder returns, Hut 8 lends out the BTC it mines. Coin owners can receive as much as 6.20% interest per year from Bitcoin lending, based on current rates.
If that wasn’t enough, the company plans to take its operations to another level. Hut 8 now has about 144 megawatts (MW) of power capacity, the equivalent of about 86 power turbines operating at low performance. But by 2022, it will expand that number to 209 MW. With more power, the company will be able to operate more mining rigs and, as a result, further increase revenue and earnings.
On top of that, Bitcoin’s network use is about to rise. In November, the long-awaited Taproot upgrade will go live on its blockchain. Taproot will reduce transaction fees and improve the network’s privacy, greatly encouraging its use in the fast-evolving cryptocurrency markets.
Sustainable operations
It’s no secret that the Bitcoin network consumes a lot of energy. In fact, one Bitcoin transaction uses as much electricity as 12 million Visa transactions. As a result, Bitcoin miners that rely on coal power plants for electricity have come under intense scrutiny, especially in China.
Hut 8’s operations are more environmentally sustainable than much of the competition’s. The company’s mining rigs are located in Alberta, Canada, and use electricity generated by a mix of natural gas, wind power, and solar energy. What’s more, Hut 8’s mining rigs cost only $0.022 per kilowatt hour to operate, which is the cheapest among publicly traded BTC mining companies.
Because of its fast revenue growth, Bitcoin lending, solid margins, and sustainability, Hut 8 is a cryptocurrency mining stock that you don’t want to miss out on. Even with the stock trading at 10 times revenue, the valuation is well worth it, considering its future expansion plans and Bitcoin’s pending network overhaul.