The Real Meaning of the Crypto Investment Boom (OTC US: HVBTF) (NASDAQ: RIOT) (OTC US: ISWH) (NYSE: SOS)
February 19, 2021 at 08:16 AM EST
Bitcoin. Is it “the new gold”? Is it a store of value? Is it a functional medium of exchange? Is it a digital collectible?
Everyone has an opinion on the cryptocurrency world at this point, which makes the current boom very different from the one we saw several years ago. The other very important difference is, this time, Bitcoin has found mass adoption and institutional legitimacy, with wide participation by major corporate entities (Tesla, JPMorgan, PayPal, Square, BNY Mellon, Goldman Sachs, Blackrock, MicroStrategy, and many others).
That “Buy-In” from established organizations – without pushback from regulators – is probably the most important lens through which to see this powerful breakout trend.
One important point to keep in mind: If Bitcoin is “the new gold”, then one might think in terms of market-cap parity between Bitcoin and Gold. If one assumes a constant gold price, then that would imply an upside price target for Bitcoin of $535,000, or another 1,000% upside for the most prominent cryptocurrency.
In such a world, one can assume a massive rush of new cryptocurrency mining businesses looking for equipment and coin. But this isn’t an easy game to enter, which would confer extra value on those companies that have already established major operations in the space.
With that in mind, we take a look at some the current leaders among Bitcoin stocks, including: HIVE Blockchain Technologies Ltd (OTCMKTS: HVBTF), Riot Blockchain Inc. (NASDAQ: RIOT), ISW Holdings Ord Shs (OTCMKTS: ISWH), and Sos Ltd – ADR (NYSE: SOS).
HIVE Blockchain Technologies Ltd (OTCMKTS: HVBTF) owns state-of-the-art green energy-powered data centre facilities in Canada, Sweden, and Iceland which produce newly minted digital currencies like Bitcoin and Ethereum continuously on the cloud.
The company’s deployments provide shareholders with exposure to the operating margins of digital currency mining as well as a portfolio of crypto coins.
HIVE Blockchain Technologies Ltd (OTCMKTS: HVBTF) recently announced an agreement to expand the footprint of its Sweden GPU mining datacenter by an immediate 2 MW, at an estimated cost of $9 million, by the end of April 2021.
According to the release, by the end of 2021 the company is planning a 30% increase in its Ethereum mining capacity. The immediate expansion of the operating footprint would be accomplished through an infrastructure re-fitting of a portion of its existing facility in Boden, Sweden at an estimated cost of US$ 250,000 and the purchase of new generation GPU chips and associated mining rigs to house them at an estimated cost of US$ 8.75 million.
And the stock has been acting well over recent days, up something like 95% in that time. Shares of the stock have powered higher over the past month, rallying roughly 111% in that time on strong overall action.
HIVE Blockchain Technologies Ltd (OTCMKTS: HVBTF) pulled in sales of $17.3M in its last reported quarterly financials, representing top line growth of 9.2%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($22.1M against $12.6M).
Riot Blockchain Inc. (NASDAQ: RIOT) focuses on cryptocurrency mining of bitcoin. 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 Blockchain Inc. (NASDAQ: RIOT) recently announced that it will achieve an estimated hash rate capacity of 1.06 Exahash per second with the deployment of the newly received 2,002 S19 Pro Antminers.
“Exceeding 1 EH/s in hash rate capacity marks a major milestone for the Company,” said Jason Les, CEO of Riot. “While we are proud of this accomplishment, we view it as the successful completion of just one of many steps of our ongoing growth plan. Riot continues to receive and deploy next-generation miners from Bitmain and remains on schedule to more than triple our currently deployed capacity by the fourth quarter of 2021.”
And the stock has been acting well over recent days, up something like 70% in that time.
Riot Blockchain Inc. (NASDAQ: RIOT) pulled in sales of $2.5M in its last reported quarterly financials, representing top line growth of 41.6%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($39.1M against $1.3M).
ISW Holdings Ord Shs (OTCMKTS: ISWH) is another emerging mainstay play in the cryptocurrency stock space. The company has commercial activity now as a miner and a mining equipment producer, with its Proceso Pod5 Datacenter mining solution.
Designed in partnership with Bit5ive, and geared primarily for the cryptocurrency mining industry, the Pod5 Datacenter offers next-generation dynamic self-management functionality, plug-and-play operation, virtually non-existent maintenance needs, and an industry best-in-class 1.06 Power Usage Effectiveness score.
ISW Holdings Inc (OTCMKTS: ISWH) recently announced that its Pod5 unit has just been switched on and is now live, set to generate nearly $3 million in annual revenues (at current BTC pricing). That announcement was followed by news that ISWH is sharply expanding its mining resources, now in negotiations toward the purchase of an additional large number of miners (between 300 and 900) in preparation for what it calls its “coming Phase 3 expansion in mining volume”.
That expansion involves assembling, equipping, and powering up additional Pod5 units, each of which houses 300 miners and is capable of driving roughly $2.9 million in annualized revenues at current cryptocurrency market pricing. Management is targeting the acquisition of 900 new miners capable of equipping three (3) new Pod5 units, which would lead to an additional $8.64 million in annualized revenues from mining activities at current market prices.
“We have managed to stick to the basic framework of our initial plan and timeline despite some inevitable delays related to the pandemic and supply chain issues as well as availability of mining machines,” commented Alonzo Pierce, President and Chairman of ISW Holdings. “We have been able to execute and stay on our path in the larger strategic vision we put in place for our cryptocurrency segment. In line with that vision, we are now ready to invest, expand, and grow, and to start directly capitalizing on the strong investments we made starting in May of last year. This next expansion in firepower is just the start.”
ISW Holdings Ord Shs (OTCMKTS: ISWH) has demonstrated strong growth in its telehealth segment, with seven consecutive quarters of sharp sequential growth. Its most recent quarter put the company on an annual run-rate to pull in more than $1.5 million in revenues not counting what appears to be significant growth brewing in its crypto mining and mining equipment segment over coming months as it continues to scale up operations.
Sos Ltd – ADR (NYSE: SOS) promulgates itself as an emerging blockchain-based and big data-driven marketing and solution provider, with a nationwide membership base of approximately 20 million in China. Recently, SOS started to get ready to roll out its cryptocurrency mining business and plans to develop insurance and security management solutions for digital assets and cryptocurrencies.
The core infrastructure of the company’s marketing data, technology, and solutions to insurance and emergency rescue services is built on big data, blockchain-based technology, cloud computing, AI, satellite, and 5G network, etc. SOS Limited, through its operating subsidiary, SOS Information Technology Co., Ltd. is a high-technology company providing a wide range of services to its corporate and individual members, including marketing data, technology, and solutions for emergency rescue services.
Sos Ltd – ADR (NYSE:SOS) most recently announced that it has entered into a securities purchase agreement with certain accredited investors to purchase $86,000,000 worth of its American Depositary Shares and warrants in a registered direct offering priced at-the-market under the NYSE rules.
According to the release, under the terms of the securities purchase agreement, the Company has agreed to sell 8,600,000 ADSs and warrants to purchase 4,300,000 ADS. The warrants will be exercisable immediately upon the date of issuance and have an exercise price of $10.00. The warrants will expire five years from the date of issuance. The purchase price for one ADS and one corresponding warrant will be $10.00. The gross proceeds to the Company from the registered direct offering are estimated to be $86,000,000 before deducting the placement agent’s fees and other estimated offering expenses.
And the stock has been acting well over recent days, up something like 168% in that time. Shares of the stock have powered higher over the past month, rallying roughly 398% in that time on strong overall action.
Sos Ltd – ADR (NYSE: SOS) generated sales of $14.3M, 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 165.9% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($52.5M against $0).
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