DPW Holdings Inc (NYSEAMERICAN: DPW) is screaming for the top in the market today. While the company didn’t issue any news this morning, there’s good reason for the excitement in the stock. Here’s what’s going on:
Skip to What You Want to Read
- DPW Holdings Benefits From the Sharp Rise in Bitcoin
- Experts Argue That Bitcoin Gains Will Continue
- Risks to Consider Before Buying DPW Stock
- Final Thoughts
DPW Holdings Benefits From the Sharp Rise in Bitcoin
As mentioned above, DPW Holdings stock is headed up in the market this morning, but with no press releases or SEC filings, many are wondering why. The answer is simple.
Bitcoin has seen a sharp rise in value as of late and DPW is becoming a major player in Bitcoin.
The company not only mines the cryptocurrency, but just yesterday, said that it would begin providing business loans secured by Bitcoin.
It’s important to keep in mind that while DPW is a major player in bitcoin mining, it also plays a role in various areas of the cryptocurrency. Perhaps most importantly, the company’s subsidiary, Coolisys Technologies develops technology to provide highly efficient energy at incredibly high levels, which is needed for the mining process. So, not only does the company mine and operate around cryptocurrency, its subsidiary will likely win in a big way when it comes to providing power solutions for large mining operations.
Experts Argue That Bitcoin Gains Will Continue
With Bitcoin driving DPW Holdings through the roof, it’s important that anyone invested in the stock also pay attention to what’s going on with Bitcoin.
So, why is it that the cryptocurrency is flying, and perhaps more importantly, will it continue?
Bitcoin is ultimately a bet against the centralized banking system as we know it. You know, the system where when things get tough, money is printed, often leading to hyper-inflation, and further financial troubles.
Well, that idea of the central banking system is what’s sending DPW stock and Bitcoin skyward.
The COVID-19 pandemic has been a painful reality for the masses. In order to spur economic growth, there have been a couple of stimulus packages passed, putting the United States in trillions of dollars of more debt.
With more stimulus on the horizon, experts are arguing that the current currency system simply won’t be able to sustain very much longer. Instead, these experts suggest that the decentralized cryptocurrency model will hold its ground, leading to further dramatic price gains.
Risks to Consider Before Buying DPW Stock
Regardless of which stock you buy, if you’re buying stock, you’re taking risk. It’s all part of the game. DPW stock is no exception to that rule. Before diving in, investors should consider the following risks:
- Penny Stock Risks. DPW is a penny stock. Trading in penny stocks generally comes with added risk. In particular, as with most penny stocks, DPW experiences quite a bit of volatility, making the timing of entrances and exits pretty difficult. Moreover, the company’s business model is largely unproven, only serving to add to the risk.
- Losses. DPW Holdings currently operates at a loss. If the company can’t work its way to profitability prior to the cash it has on its balance sheet running dry, it will likely sell newly-issued shares to raise funds. This process dilutes value for existing shareholders and often leads to declines.
- A Speculative Bet. While DPW has operations outside of the cryptocurrency space, the vast majority of its value comes from the rise in Bitcoin. However, cryptocurrency is still a very speculative play and comes with added risks.
Ultimately, there are risks to consider with any stock you choose to invest in. However, even with the risks in mind, DPW stock may be an overwhelmingly strong play.
The fact of the matter is that cryptocurrency is gaining steam, and the company was one of the early adopters of the technology. As the trend continues, the sky’s the limit for both Bitcoin, and those that mine and operate in the industry, including DPW stock.