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Bitcoin Stocks in Focus as Bitcoin Nears New All-Time Highs (CAN, HVBTF, ISWH, SOS)

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If you want to understand why Bitcoin has held up so well in its current bull trend, you need look no further than the difference between the public expression of the Bitcoin views held by JPMorgan Chase & Co. (NYSE:JPM) in 2017 versus its perspective on Bitcoin in 2021.

In 2017, JPMorgan CEO Jamie Dimon went on record to say that he would fire any trader that buys or sells Bitcoin “in a second”. It was publicly regarded as dirty, scammy, illegitimate. The domain of criminals and drug dealers and bubble-running greater fools with no sense or sophistication when it comes to financial markets.

In 2021, a recent SEC filing shows that JPM is planning to launch a new product that will give investors exposure to cryptocurrency through a basket of Bitcoin proxy stocks. In other words, Bitcoin is an “asset class” fit to play a role in diversifying portfolios. The domain of proper Wall Street professionals. Legit.

One might even leap to the seemingly strong supposition that this move could be just step one in a multi-step strategy (because they now understand how they can make a lot of money off this thing) to launch a whole set of crypto products and services. And when JPM does it, GS, MS, BAC, C, and the rest of the gang likely aren’t too far behind.

Now that Bitcoin lives on the right side of the tracks, a whole new world of opportunity is available.

With that in mind, we take a look at some of the current leaders among Bitcoin stocks, including: Canaan Inc – ADR (NASDAQ:CAN), HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF), ISW Holdings Ord Shs (OTCMKTS:ISWH), and Sos Ltd – ADR (NYSE:SOS).

 

Canaan Inc – ADR (NASDAQ:CAN) bills itself as a company that provides high-performance computing solutions to efficiently solve complex problems. In 2016, Canaan successfully initiated the production of its first 16nm chip and passed the test to receive China’s national high-tech enterprise certification. In 2018, Canaan achieved major technological breakthroughs to launch the K210, the world’s first-ever RISC-V-based edge artificial intelligence (AI) chip, which is now widely used for access control in situations such as smart door locks and more.

Canaan Inc. is currently focused on the research and development of advanced technology, including such areas as AI chips, AI algorithms, AI architectures, system on a chip (SoC) integration and chip integration. Using the AI chip as its base, Canaan Inc. has established an intellectual value chain. Canaan Inc. also provides a suite of AI service solutions and is able to tailor these solutions to the needs of its partners.

Canaan Inc – ADR (NASDAQ:CAN) recently announced that its revenue visibility has improved substantially in 2021 as a result of attaining purchase orders totaling more than 100,000 units of bitcoin mining machines from customers in North America.

Mr. Nangeng Zhang, Chairman and Chief Executive Officer of Canaan, commented, “We have changed our operations model in 2021. Previously we were selling bitcoin mining machines mostly to individual mining operators who may not have longer-term planning. In late 2020, we shifted our client base to mostly publicly traded companies and bitcoin-focused investment funds which tend to place sizable orders with longer-term commitment. As a result, we can now forecast our revenue much more precisely.”

And the stock has been acting well over recent days, up something like 23% in that time.

Canaan Inc – ADR (NASDAQ:CAN) managed to rope in revenues totaling $23.6M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -75.3%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($56.7M against $24.4M).

 

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.

The stock has suffered a bit of late, with shares of HVBTF taking a hit in recent action, down about -7% over the past week. Shares of the stock have powered higher over the past month, rallying roughly 51% in that time on strong overall action.

HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF) managed to rope in revenues totaling $17.9M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 170.4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($20.8M against $15.4M).

 

ISW Holdings Ord Shs (OTCMKTS:ISWH) is a relative newcomer onto the Bitcoin stock scene, though the company started its journey when it began diversifying its cash holdings into Bitcoin nearly two years ago. That level of involvement jumped dramatically when it signed a partnership agreement with Bit5ive and began designing its POD5IVE datacenter mining pod early last year.

That process has come to fruition with the assembly, shipping, and full operational launch of the POD5IVE, which is now actively mining Bitcoin at the Bit5ive renewable energy crypto mining project in Pennsylvania. The Proceso POD5IVE Datacenter mining solution 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 it is working to expand its mining capacity with the outfitting of three new mining datacenters, each equipped with hundreds of new mining rigs. In the course of the company’s newfound sheen of prosperity, it is also taking steps to reduce dilution risk and pay off toxic notes to keep the virtuous circle in place.

To that effect, the company announced this week that it 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.”

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.

 

Sos Ltd – ADR (NYSE:SOS) is 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) 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.

Even in light of this news, SOS has had a rough past week of trading action, with shares sinking something like -23% 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 50% in that time on strong overall action.

Sos Ltd – ADR (NYSE:SOS) pulled in sales of $14.2M in its last reported quarterly financials, representing top line growth of -38.4%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($52.5M against $0).

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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