Comparing Hive Engine Tokens To Penny Stocks

This was an idea that floated in my head ever since I joined Hive-almost a month ago, I'm still learning and exploring the ecosystem-so I decided to write a bit about it to see where it stands. There are some similarities and differences between them. Both have a low market cap and are trading less than 5 dollars. Penny stocks are volatile and speculative but I'm not sure if HE tokens are. To me, they are projects that are being built and it will take some time before they mature. Everything seems steady and there's no huge price fluctuations.

In The Early Stages

Most penny stocks are in start-up phase and the share price is mainly driven by news, PR or speculation. It's hard to measure the current value so the future value is predicted based on information available which in the beginning is scarce. The true value of the company is not readily known. Investors invest hoping that the price will be much higher in the mid to long term while traders hope for a quick price jump in the short term. Same can be said of HE tokens, they're in the building phase, some have reach some maturity (Leofinance) while others are on their way. The true value can't be known yet so we can just speculate. It's new so anything can happen.

Risk/Reward Ratio

More risk equals more rewards and less risk equals less rewards. With share price sometimes below $1 dollar you can scoop 10,000+ shares and 10X your investment if the price moves above the $1 dollar range. Same thing with HE tokens, you can buy 10,000 tokens at 4 cents per token and double your investment if the token price climbs to 8 cents. But this things work well for traders because you have to exit before the price dips again. Investors can do that too but they usually don't, it's the long term that matters.

Low Market Cap

Penny stocks have a low market cap ranging from 50M to 100M+. That's way higher than HE tokens market cap. They also have a higher trading volume than HE tokens and more spread. A spread is the difference between the bid price and the ask price. However they're both in the low market cap territory. You could say that penny stocks are around the 80% aiming to exit the territory while HE tokens are hovering around the 15% mark.

Conclusion

Investment wise, Hive Engine Tokens look more steady and profitable in the long term. Penny stocks are quite volatile. Trading penny stocks is easier and the reward is higher than HE Tokens. However, when it comes to engagement HE tokens have a low barrier to entry that penny stocks. The only way to accumulate penny stocks is by investing capital. With HE Tokens, capital is not the only option. You can also get busy and work to earn some tokens. The models are intrinsically different.

Could it be that Hive itself is the best comparison to penny stocks and not HE tokens? Let me know in the comments, I would love to hear your feedbacks.

Thanks For Reading!

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