Bitcoin has been red hot. Scorching. The trend continues to be driven by growing mainstream acceptance that crypto is here to stay.
The evidence keeps growing. There’s an ETF for Bitcoin now: the ProShares Bitcoin Strategy ETF (NYSEArca:BITO). Many more are coming according to recent SEC filings from major ETF houses. Mastercard Inc (NYSE:MA) just announced that you can earn Bitcoin reward points and then partnered with Bakkt Holdings Inc (NYSE:BKKT) to “bring crypto payments to the masses”. Tom Brady is even doing ads for a crypto exchange.
In other words, Bitcoin is now mainstream. Undeniably.
But that has other implications. For example, there is a lake in New York state – Seneca Lake. It’s one of New York’s beautiful Finger Lakes. Residents in the area now say the lake is getting nearly as warm as a bathtub. The cause? A massive bitcoin mining facility tucked up against the lake. It is generating so much heat that it’s changing the temperature of a lake large enough to be visible from space.
Crypto mining is also generally environmentally damaging as private equity firms buy up old fossil fuel power plants and create bitcoin mining farms on surrounding land – in goes oil, gas, and coal; out comes digital money.
That could create some interesting opportunities for innovation in the future. But any way you shake it, Bitcoin is here to stay. That has implications for investors. One interesting angle on the theme is in the stock market. Equities are still the most accessible and may be the most explosive. Just look at BKKT – shares of the stock started this week at under $10. By Tuesday morning, they were kissing $60.
With that in mind, we take a look below at some of the most interesting opportunities in the crypto stock space.
Riot Blockchain Inc (NASDAQ:RIOT) focuses on mining Bitcoin, and through Whinstone, its subsidiary, hosting Bitcoin mining equipment for institutional clients. The Company is expanding and upgrading its mining operations through industrial-scale infrastructure development and latest-generation miner procurement.
Riot is headquartered in Castle Rock, Colorado, and the Whinstone Facility operates out of Rockdale, Texas. The Company also has mining equipment operating in upstate New York under a co-location hosting agreement with Coinmint, LLC.
Riot Blockchain Inc. (Nasdaq:RIOT) recently announced the development of 200 megawatts of immersion-cooling technology at its Whinstone facility, which to the Company’s knowledge is the Bitcoin mining industry’s first industrial-scale immersion-cooled deployment of Bitcoin mining hardware. According to the release, the development of 200MW of immersion-cooling at industrial-scale is a direct result of the Company’s focus on Bitcoin mining infrastructure development, led by Riot’s leadership team at Whinstone.
“After months of research and development, utilizing partnerships across industries, Riot is proud to be a pioneer in the use of cutting-edge immersion-cooling technology at an unprecedented scale,” said Jason Les, CEO of Riot. “By leveraging technology, industry-leading low power costs, and economies of scale, Riot intends to continue driving operating and capital efficiencies for its self-mining business and its institutional clients. Due to these efficiencies, we anticipate observing an increase in the Company’s hash rate and productivity through 2022, without having to rely solely on purchasing additional ASICs.”
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 RIOT shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -8% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Shares of the stock have powered higher over the past month, rallying roughly 10% in that time on strong overall action.
Riot Blockchain Inc. (Nasdaq:RIOT) managed to rope in revenues totaling $34.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 1668.7%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($220.2M against $37.5M).
KULR Technology Group Inc (NYSEAMERICAN:KULR), like RIOT, is suddenly vying for leadership in the new pursuit of a more sustainable, less heat-intensive path for the whole of the someday-trillion-dollar cryptocurrency mining industry.
KULR has a 30-year history tied to carbon fiber thermal energy management technology for aerospace and defense applications. This company has already built custom heat management technology for two NASA JPL space missions (Mars Perseverance Rover and the mission to put a human back on the Moon’s surface by 2025) and its tech is currently in use on the International Space Station. KULR has also already won over 30 NASA contracts, and has inked deals with the DoT and USAF.
KULR Technology Group Inc (NYSEAMERICAN:KULR), in other words, has already established itself as a world leader in providing safe and reliable cutting-edge solutions to keep specialized equipment cool during energy intensive operations under potentially extreme conditions. Now, it would appear, it is turning its focus to crypto mining equipment. It seems, on its face, like a legit application. But the devil will obviously be in the details. And, at this point, we don’t have a whole lot to go on.
Last week, the company tweeted out: “Working on something quite a ₿it special at the $KULR facility. Stay tuned for more!”, which is an obvious tease for something more to come that could make the stock the next speculative gem in a space that is booming among the usual suspects. Since then, the company has interacted over its official Twitter account with people asking follow-up questions, so we know a bit more.
One tweet pointed out that a pic in the original tweet was “the Antminer S9 #Bitcoin Miner” and that the company was testing its thermal management systems in the KULR facility. Another, in response to a question about the enormous heat and energy issues involved in BTC mining, noted that “the more normalized cryptocurrency gets the sooner the sector will need to address those concerns!”
KULR Technology Group Inc (NYSEAMERICAN:KULR), it seems clear, is working on some sort of application for its top-tier heat management tech in the crypto mining space. And the big miners clearly have a major incentive to appear actively engaged in their evolution toward a fully safe and sustainable future or the industry simply won’t survive in a world where investment capital is increasingly at the mercy of the ESG movement. This could add up to very interesting times ahead for this stock.
HIVE Blockchain Technologies Ltd (NASDAQ:HIVE) has powered about 1,000% higher over the past year, but has consolidated over the past 6 months. The company engages, according to its materials, in building a bridge from the blockchain sector to traditional capital markets.
HIVE owns state-of-the-art, green energy-powered data center facilities in Canada, Sweden, and Iceland. The company touts its shares as a source of exposure to the operating margins of digital currency mining, as well as a portfolio of cryptocurrencies such as ETH and BTC.
Hive Blockchain Technologies Ltd. (Nasdaq:HIVE) recently announced the purchase of 6,500 next generation Bitcoin miners. These new machines have an aggregate hash power of 585 Petahash per second (PH/s). The integration of these miners into HIVE’s systems will be made in tranches over the next 130 days. They will be placed in existing facilities, and in newly constructed data centres at our campus in New Brunswick, Canada.
Frank Holmes, Executive Chairman of HIVE stated “We are pleased to be building on our strategic alliances with leading ASIC manufacturer Canaan to achieve our goals and drive value for our shareholders, with executing on a transaction that increases our cash flow and green mining capacity. Frank continued, “HIVE currently has approximately 1.2 Exahash per second (EH/s) of Bitcoin mining capacity, and with this new purchase, HIVE’s Bitcoin ASIC pipeline will be at 2 EH/s by December 2021, and 3 EH/s by March 2022. In addition to this, we are expanding our current active Ethereum mining capacity from approximately 4,000 Gigahash per second (GH/s), to 6,000 GH/s in new facilities in Sweden.”
If you’re long this stock, then you’re liking how the stock has responded to the announcement. HIVE shares have been moving higher over the past week overall, pushing about 5% to the upside on above average trading volume. Shares of the stock have powered higher over the past month, rallying roughly 44% in that time on strong overall action.
Hive Blockchain Technologies Ltd. (Nasdaq:HIVE) managed to rope in revenues totaling $45.7M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 401.5%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($145.8M against $11.9M).
Other core players in the cryptocurrency and crypto mining space include Marathon Digital Holdings Inc. (Nasdaq:MARA), Canaan Inc. ADR (Nasdaq:CAN), MicroStrategy Inc. (Nasdaq:MSTR), and Coinbase Global Inc. (Nasdaq:COIN).
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