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Penny stocks

Investing in Bitcoin Pot Penny Stocks: Welcome to the 21st Century

By , Associate Editor, Money Morning@DavidGZeiler

A world in which you could invest in pot penny stocks was virtually unimaginable 20 years ago, as was a world with a digital currency like Bitcoin.

Heck, digital currencies and investing in pot penny stocks were hard to imagine just five years ago.

But now investing in Bitcoin pot penny stocks is a reality.

It's become possible because now you can buy marijuana legally in many states, and Bitcoin has risen from an obscure experiment to a promising new form of money.

And a few tiny, enterprising companies have combined the two by coming up with ways to allow people to buy marijuana with Bitcoin.

So it is now possible to invest in Bitcoin pot penny stocks - penny stocks that tap into both of these hot 21st century trends.

Let's take a look at why each of these trends presents powerful investing opportunities, particularly when combined.

First, there's the acceleration toward the legalization of marijuana, which has driven several pot penny stocks much higher this year. For example, GreenGro Technologies Inc. (OTCMKTS: GRNH) is up 547% year to date, and Hemp Inc. (OTCMKTS: HEMP) is up 190%.

Today you can legally buy cannabis in both Colorado and Washington. The number of states that allow medical marijuana has already reached 18, with eight more considering it.

Hemp Chief Executive Officer Bruce Perlowin told Bloomberg News investors in pot penny stocks are looking for "the next Microsoft."

"The demand for marijuana is insatiable," said Perlowin. "You have a feeding frenzy for the birth of a new industry."

And there's Bitcoin.

As the Bitcoin price rocketed last year from less than $14 to more than $1,100, the business community took note.

As Bitcoin use grows, more and more companies are springing up to exploit the unique capabilities of the digital currency, and that means we're seeing more Bitcoin penny stocks coming to market.

Most Bitcoin businesses at this point are startups in which only venture capitalists can invest, but a few are penny stocks.

Tapping into both the growing market for marijuana and the potential of Bitcoin is an intriguing investing prospect, to say the least. Here are three Bitcoin pot penny stocks that seek to profit from this magic formula...

Three Bitcoin Pot Penny Stocks to Watch

But before we get to those Bitcoin pot penny stocks, we need to note the caveats that apply to penny stocks in general.

First, penny stocks typically are not very liquid, meaning the volume of shares traded every day is fairly low. That means it can be hard to exit a stock when things turn against you, which can lead to even bigger losses.

That low volume, coupled with their extremely low prices, can make penny stocks subject to wild price swings. And that leaves them vulnerable to manipulation by unscrupulous "pump-and-dump" operators.

Plus, most are lightly regulated because they trade "over the counter" (OTC) as opposed to on a major exchange such as the New York Stock Exchange. That means fewer required public filings, which gives investors less information.

And yet along with the high risk comes the potential for huge rewards. A Bitcoin pot penny stock, if it succeeds, could rise 200% or 300%.

Or it could go under. It's just the nature of the beast. So if you're planning on investing in Bitcoin pot penny stocks, make sure you allocate only a tiny portion of your portfolio - money you're comfortable losing entirely.

Now, here are those three Bitcoin pot penny stocks:

Do you see any potential in these Bitcoin pot penny stocks? Share your thoughts on Twitter @moneymorning or Facebook.

Once you know exactly what to look for, penny stocks can be a very rewarding part of your investing strategy. Here's how to find the best penny stocks on the market while avoiding the losers...

About the Author

David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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