For many investors, the sticky nature of the Bitcoin boom is finally starting to kick in. To call it a bubble is to basically directly state that “most people” are overly leveraged to its current price level. For the true believers, that’s a laughable idea at this point.
“Most people” have heard of Bitcoin, but don’t have any exposure to its upside potential. Furthermore, Gold – it’s supposed asset class competitor and proxy as a ‘store of value’ – is still worth over six times as much as bitcoin on a global market cap basis, implying upside potential to somewhere over the $300k level.
More to the point, JPMorgan analysts have already started to point to a potential upside target in the $146k range. That’s almost a triple from here.
Outside of Bitcoin, none other than billionaire luminary and tech VC sage Mark Cuban recently put out a piece suggesting that Ethereum’s smart contracts were set to completely disrupt software, banking, and healthcare companies.
Long story short, the move has been big. But other than the sheer shock value of the move so far, there isn’t a lot of evidence against it going considerably higher from here. And, as market veterans will attest, the trend is your friend.
Hence, with that in mind, it may still pay to make friends with this trend. As such, we take a look at equity plays levered to this trend, including: HIVE Blockchain Technologies Ltd (OTCMKTS: HVBTF), MicroStrategy Incorporated (NASDAQ: MSTR), ISW Holdings Ord Shs (OTCMKTS: ISWH), and Riot Blockchain Inc. (NASDAQ: RIOT).
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 that it has made a monumental step by smashing through its updated 2021 ASIC capacity goal of 2,000 Petahash per second (PH/s) with the purchase of 10,500 next generation miners with an aggregate operating hash power of 711 PH/s, taking our total future capacity to 2,474 PH/s or 2.474 Exahash per second (EH/s).
According to the company’s release, the addition of these 10,500 next generation miners, increases HIVEs aggregate operating hash rate from Bitcoin mining to an estimated 2.474 EH/s or 2,474 PH/s by the end of 2021. This new equipment, sourced through our growing network, is coming from 2 different sources to reduce our dependency on one supplier, and reduce supplier delivery risk. The first supplier is providing 9,000 next generation miners with an aggregate hash rate of 666 PH/s. This equipment is expected to be delivered in 5 tranches, with 1,000 miners in June, and 2,000 miners in each of the months of September, October, November, and December 2021.
Even in light of this news, HVBTF has had a rough past week of trading action, with shares sinking something like -12% 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. Shares of the stock have powered higher over the past month, rallying roughly 81% 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).
MicroStrategy Incorporated (NASDAQ: MSTR) is Michael Saylor’s company, with Saylor being one of the most fervent bitcoin bulls on the planet, having committed huge portions of the company’s free capital to the digital currency over the past year.
MicroStrategy provides modern analytics on an open, comprehensive enterprise platform used by many of the world’s most admired brands in the Fortune Global 500. Optimized for cloud and on-premises deployments, the platform features HyperIntelligence, a breakthrough technology that overlays actionable enterprise data on popular business applications to help users make smarter, faster decisions.
MicroStrategy Incorporated (NASDAQ: MSTR) most recently announced that it had purchased an additional approximately 19,452 bitcoins for approximately $1.026 billion in cash at an average price of approximately $52,765 per bitcoin, inclusive of fees and expenses. According to the release, as of February 24, 2021, the Company holds an aggregate of approximately 90,531 bitcoins, which were acquired at an aggregate purchase price of approximately $2.171 billion and an average purchase price of approximately $23,985 per bitcoin, inclusive of fees and expenses.
“The Company remains focused on our two corporate strategies of growing our enterprise analytics software business and acquiring and holding bitcoin,” said Michael J. Saylor, CEO, MicroStrategy Incorporated. “The company now holds over 90,000 bitcoins, reaffirming our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, can serve as a dependable store of value. We will continue to pursue our strategy of acquiring bitcoin with excess cash and we may from time to time, subject to market conditions, issue debt or equity securities in capital raising transactions with the objective of using the proceeds to purchase additional bitcoin.”
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action MSTR shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -20% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
MicroStrategy Incorporated (NASDAQ: MSTR) pulled in sales of $131.3M in its last reported quarterly financials, representing top line growth of -1.7%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($60.8M against $285.6M, respectively).
ISW Holdings Ord Shs (OTCMKTS: ISWH) 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 the Company has paid off and cancelled a major convertible debt note by allocating $363k to settle the outstanding obligation and remove it from the books.
“As our financial reality has shifted over recent months, we have an opportunity to drive value for our shareholders in many ways, including eradicating dilution risk by being proactive in addressing outstanding liabilities,” noted Alonzo Pierce, President and Chairman of ISW Holdings. “Without this action, the note would have had the potential to convert at a 50% discount to current share pricing. We weren’t comfortable with that potential outcome, so we deployed capital to eliminate that risk.”
The Convertible Note that has now been cancelled presented a dilution risk for shareholders upon potential conversion into equity at as much as a 50% discount to market pricing for shares. Management is committed to preventing dilution risk as part of its official anti-dilution strategic initiative, introduced last year. The Company has regularly and consistently taken steps to eliminate, cancel, or pre-empt dilution risks such as those presented by convertible debt notes since announcing this initiative.
This announcement follows the Company’s recent moves to energize its initial POD5IVE crypto mining unit and to acquire the means to assemble and energize two additional mining pods, each powering full-scale mining operations involving hundreds of high-performance mining rigs.
Pierce added, “This is just the beginning on so many levels, and we will continue to protect our shareholders and advance their interests around every corner. We are approaching every decision from the perspective of driving long-term value. We have a number of very exciting announcements coming as we continue to expand operations at a rapid rate, but we know that none of this would be possible without the steady strong-handed support of our valued shareholders.”
ISW Holdings Ord Shs (OTCMKTS :ISWH) has demonstrated strong growth, 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.
Riot Blockchain Inc. (NASDAQ: RIOT) 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.”
The stock has suffered a bit of late, with shares of RIOT taking a hit in recent action, down about -27% over the past week.
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).
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