For sure, there's no shortage of Bitcoin companies. Hundreds of Bitcoin companies have launched in the past few years. And while hundreds of millions of dollars of venture capital has poured into these companies, none has reached the stage where it's ready for an initial public offering.
But we do have an array of Bitcoin penny stocks.
Some of these came about through reverse mergers, in which a private company buys a publicly traded company to acquire the stock symbol. Others were penny stocks in a completely different business that decided to jump on the Bitcoin bandwagon after the digital currency gained notoriety in 2013.
And sometimes they shift gears again when things don't go well – like SolPower Corp.
A little over a year ago, this software company changed its name to Bitcoin Collect. Its stated goal was to "totally dominate the Bitcoin space" with its Bitcoin-based payment cards. Four months later, the company abandoned Bitcoin and changed its name to Good Vibrations Shoes.
The company's new goal is to "augment the lives of people with diabetes, swelling and cold, achy feet."
The strange saga of SolPower is just one reason investing in penny stocks can be so dicey. But there are several other risks investors need to keep in mind when they venture into these murky waters.
The Risks of Investing in Penny Stocks
Penny stocks typically are not very liquid, meaning the volume of shares traded every day is fairly low. So it can be hard to exit a stock when things turn against you, which can lead to even bigger losses.
That low volume – and 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.
Still, penny stocks have a lot of fans. That's because along with the high risk comes the potential for huge rewards. A Bitcoin penny stock, if successful, could rise 200% or 300% in a very short time.
On the other hand, many will implode. It's the nature of the beast. So if you're planning on investing in Bitcoin stocks, please proceed with maximum caution and allocate only a small portion of your portfolio.
That said, here are some of the Bitcoin penny stocks you can buy…