TD Ameritrade says investing noobs in blockchain and weed are driving the markets

One of the largest U.S. brokerage firms says in the hottest of hot money sectors is driving new investors into the equity markets.

TD Ameritrade Holding Corporation (TD Ameritrade Holding Corp. Stock Quote, Chart, News: Nasdaq: AMTD) Monday reported its Q1, 2018 results. While the broker’s numbers were up across the board, management noted one trend was driving growth, in particular.

“Trading was at record levels, and investor engagement has continued across all client segments as the market reached new highs,” CEO Tim Hockey said. Enhanced consumer interest in blockchain and cannabis-related securities drove a further surge in engagement in the final weeks of the quarter, particularly among first-time investors. New account growth is at record levels, interest in our digital guidance solutions remains high, and use of our multiple mobile offerings continues to rise. Our fully-staffed service centers are busy, providing education to clients and arming them with the information they need to make informed investment decisions.”

In Canada, marijuana and blockchain stocks are topping the market, with names like Hive Blockchain, Canopy Growth Corp,. Aurora Cannabis, BTL Group, CanniMed Therapeutics and Victory Square Technologies are currently trading turns at the top of the most active stock lists.

Many are comparing today’s activity with past asset bubbles.

“Canada’s stock markets are no strangers to investing fads, with cobalt, lithium and marijuana stocks all bubbling higher this year,” Kristine Owram and Doug Alexander from Bloomberg reported in December. “The country’s TSX Venture Exchange has been dubbed the “wild west,” the penny stocks among its more than 1,700 listings gyrating wildly from one day to the next. Cryptocurrency experts say the fast-evolving bitcoin sector is a classic case of buyer beware, not unlike the dot-com bubble of the late 1990s when shares would spike in value simply because a company had “.com” in its name.”

But one noted banker says the crypt craze shouldn’t be compared to the dot-com bubble because the quality of the issuers is much higher.

““The level of activity in this market of quality plays, quality teams is as high as I’ve seen since the internet age,” GMP Capital CEO Harris Fricker said in December. “Canada’s place in this is dramatically more important than what it was in the first phase of the internet.”

Fricker says the sector is experiencing mania in Canada because universities like The University of Waterloo and University of Toronto are industry “hotbeds”.