One can imagine several ways to think about the long-term path for Bitcoin and the Cryptocurrency space following Elon Musk’s sudden about-face on Bitcoin acceptance for Tesla cars on Wednesday afternoon.
The crypto bears will say that it is a potential silver bullet to the heart: Bitcoin’s most important advocate and missionary turning down coins at the dealership checkout counter, and for a reason – environmental sustainability – that resonates so powerfully with millennials, who are known to be the most important demographic for Bitcoin’s long-term prognosis… How can that turn of events be shrugged off?
Here’s how: Bitcoin is the network-effect leader in the space. And network effect is a huge factor. The value of Bitcoin is wrapped up in the fact that it’s the most established and most well-known — and most widely accepted. Its real-world financial infrastructure — in networks, applications, and brain-space — is miles ahead of competing for digital payment coins.
At the end of the day, it may be that “Bitcoin is inevitable”, as many of its hardcore HODLers like to say, and it will simply roll right over this speedbump on psychological and financial momentum and commitments already made. If this had happened a year or two ago, it may have been something closer to an existential risk. But at this point, the river may indeed be too wide to turn or dam.
As a case in point, news broke yesterday afternoon that Steve Cohen’s Point72 Asset Management, and its $22 billion in AUM, is now sniffing around and wants to get involved in crypto investment projects. They will be following tight on the heels of their rival, Millennium Management, and its extensive activity in crypto-related vehicles, including the Grayscale Bitcoin Trust (OTC US: GBTC). CoinDesk recently also reported that Harvard, Yale, and other prominent college endowment funds have recently started buying crypto directly on exchanges.
To cap it off, Coinbase Global Inc (NASDAQ: COIN) posted blowout results yesterday after the bell, guiding Q2 numbers significantly above estimates in the process.
The combination paints a picture that could represent a major opportunity in crypto-related stocks after the group has suffered a sharp pullback. This includes Marathon Patent Group Inc (NASDAQ: MARA), Riot Blockchain Inc (NASDAQ: RIOT), ISW Holdings (OTC US: ISWH), and HIVE Blockchain Technologies Ltd (OTC US: HVBTF).
HIVE Blockchain Technologies Ltd (OTC US: HVBTF) owns state-of-the-art green energy-powered data center facilities in Canada, Sweden, and Iceland which produce newly minted digital currencies like Bitcoin and Ethereum continuously on the cloud.
Its deployments provide shareholders with exposure to the operating margins of digital currency mining as well as a portfolio of crypto coins.
HVBTF recently announced that it has sold its Norwegian subsidiary Kolos Norway AS to the local municipality Narvik under a share purchase agreement. Under the agreement, the Company transferred all of the shares of Kolos to the municipality of Narvik, along with a US $200,000 payment. This allows the Company to focus on its datacentres located in Sweden and Iceland which mine Ethereum continuously on the cloud.
“HIVE would like to express our appreciation to the local community of Narvik, who has been supportive of the challenging position that the Company was facing,” said Executive Chairman, Frank Holmes. Mr. Holmes further stated “we are unfortunate that it has come to this, but glad that the property has been retained by the local community so that the community can focus on developing this greenfield property for many uses. This deal was made before myself or our CFO had assumed executive duties. We are pleased that our management team can now continue to focus on more immediate needs like upgrading our current facilities while expanding existing operations in Sweden, Iceland and Canada.”
Even in light of this news, HVBTF has had a rough past week of trading action, with shares sinking something like -18% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way.
HIVE Blockchain Technologies generated sales of $17.9M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 3.2% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($20.8M against $15.4M).
ISW Holdings (OTC US: ISWH) is a relative newcomer in the crypto space, getting things ramped up last year in May and June with its partnership with Bit5ive LLC, designing and assembling its Proceso POD5IVE mining pod, a fully self-contained high-PUE mining solution designed, assembled, and installed in partnership with Bit5ive at the Bit5ive 100 MW renewable energy cryptocurrency mining facility in Pennsylvania.
It has since tripled its fleet of mining pods. Each pod is powered by 280 mining rigs and is capable of driving roughly $2.9 million in annualized revenues (at current cryptocurrency price levels). ISW Holdings continues to build out its own mining capacity, with plans to bring multiple additional pods online this year. However, data from pod mining operations is also being collected for the purpose of marketing the POD5IVE datacenter to other businesses and individuals interested in a self-contained industry-leading cryptocurrency mining solution.
ISWH shares have been sliding along with the rest of the space. But, just this morning, the company put out news that could help to provide strong support with its announcement that its Board of Directors has officially approved a significant share buyback program for immediate activation. The size of the Buyback program has been initially set at up to $250k, but may be expanded in the future.
“We have substantial cash reserves, strong growth expectations, and expanding productive resources targeting rapidly growing end markets, as well as an absolute commitment to delivering shareholder value over the long term,” stated Alonzo Pierce, President, and Chairman of ISW Holdings.
According to the release, ISWH has strengthened its balance sheet considerably over recent quarters through non-toxic fundraising and cash flows from operations. At this point, the company believes its equity to be undervalued relative to growth potential given recent investments in cryptocurrency mining capacity and telehealth operations.
Pierce added, “We feel our shares no longer properly reflect the prepotency and growth potential inherent in our investments and market positioning. Our commitment is to the utilization of available resources toward the maximization of shareholder value within the purview of the Company’s mission. At this point, that implies the deployment of some portion of cash reserves toward the repurchasing of ISWH shares.”
ISW Holdings has reduced outstanding shares by nearly 25% and eliminated over $3.4 million (or 94%) of outstanding convertible debt in recent months. As noted in its recent corporate update, the Company anticipates at least threefold growth in topline performance in 2021 versus 2020 as its expanding crypto mining operations fully ramp up. It has also shown topline and bottom-line growth over recent quarters from its Telehealth and Home Healthcare division.
Riot Blockchain Inc (NASDAQ: RIOT) has become one of the most recognizable stocks in the crypto space, but shares have been sliding sharply of late. The company is expanding and upgrading its mining operations by securing the most energy-efficient miners currently available. The company also holds certain non-controlling investments in blockchain technology companies.
Riot is headquartered in Castle Rock, Colorado, and the company’s mining facility operates out of upstate New York, under a co-location hosting agreement with Coinmint.
RIOT recently announced its April production and operational updates, including its unaudited Bitcoin production for April 2021 and its latest miner delivery status.
According to its release, in April 2021, Riot produced 206 BTC, an increase of approximately 91% over its pre-halving April 2020 production of 108 BTC. Through April 2021, the Company produced a total of 697 BTC, an increase of approximately 79% over its pre-halving BTC production during the same period of 2020 of 389 BTC. As of April 30, 2021, Riot holds over 1,771 BTC, all of which were produced by its mining operations.
And the stock has been acting well over recent days, up something like 11% in that time. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -24%.
Riot Blockchain pulled in sales of $5.3M in its last reported quarterly financials, representing top-line growth of 340.7%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($235M against $2.4M).
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