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Crypto Stocks Enter a New Age (CAN, RIOT, ISWH, MARA)

The Cryptocurrency boom that got full-throated traction last fall has only accelerated, and the key point in play is legitimacy.

Something like Bitcoin is ultimately only of value to the extent it can plausibly function as “money”. You can throw out all other ideas and notions. People overcomplicate the situation frequently. Is it a store of value? Is it a functional digital commodity? Is it an alternative to gold? Is it an inflation hedge?

The reality is quite simple: if you can’t trade it for other forms of money, or for goods and services, then it doesn’t have value. Hence, it follows the same basic philosophical rule as any other currency – the US Dollar included. And that’s all about faith.

And faith is ultimately tied into mutually reinforced legitimacy. It isn’t about laws, rules, regulations, or anything else. It’s just about whether or not we, as a society, are willing to act “as if” it has value. With recent moves from Tesla, JPMorgan, PayPal, Microstrategy, and Square, that faith is getting easier and easier to come by, and players in the space are starting to reap the benefits.

With that in mind, we take a look at some of the top speculative plays in the Bitcoin stock space, including: Canaan Inc – ADR (NASDAQ:CAN), Riot Blockchain Inc (NASDAQ:RIOT), ISW Holdings Ord Shs (OTCMKTS:ISWH), and Marathon Patent Group Inc (NASDAQ:MARA).

 

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) most 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. According to the release, many of those purchase orders were placed with prepayment and will likely occupy the Company’s current manufacturing capacity entirely for the full year of 2021 and beyond. With those fully committed purchase orders, the Company now enjoys a much higher degree of revenue visibility and more precise forecast.

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 47% in that time. Shares of the stock have powered higher over the past month, rallying roughly 46% in that time on strong overall action.

Canaan Inc – ADR (NASDAQ:CAN) generated sales of $23.6M, 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 -6.2% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($56.7M against $24.4M).

 

Riot Blockchain Inc (NASDAQ:RIOT) is a mainstay for traders in the crypto space at this point, and for good reason.

Shares have vaulted higher as Bitcoin has powered ahead over recent months. The company’s primary mining facility is located in Massena, New York under a colocation agreement with Coinmint.

Riot Blockchain Inc (NASDAQ:RIOT) most recently announced the appointment of Jason Les as Chief Executive Officer, and that Hannah Cho has been appointed to the Company’s Board of Directors, as an independent director. Mr. Les has been deeply involved with Bitcoin since 2013, with significant experience in both mining and as an engineer studying protocol development and contributing to open-source projects.

“In early 2020, Riot made the strategic decision to completely focus on expanding its mining capabilities, which has positioned the Company well to take advantage of significant opportunities in the current Bitcoin environment,” said Benjamin Yi, Chairman of the Board of Directors.

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 60% in that timeframe.

Riot Blockchain Inc (NASDAQ:RIOT) generated sales of $2.5M, 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 26.8% on the top line. 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) has been a lesser known but highly impressive component to the Bitcoin stock basket over the past two months. Shares of ISWH are up over 2,000% since December, and for good reason.

The company formed a joint venture partnership with Bit5ive in May 2020 to build and deliver an elegant, powerful, and efficient data center pod design. The Pod5 Datacenter is the result. 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) announced another big catalyst this morning with news that the company is in the process of 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”.

The Company previously announced that it is currently launching its initial Pod5 Cryptocurrency Mining Pod, a fully self-contained high-PUE mining solution designed, assembled, and installed in partnership with Bit5ive at its 100 MW renewable energy cryptocurrency mining facility in Pennsylvania. 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 very 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.

 

Marathon Patent Group Inc (NASDAQ:MARA) mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets. The company currently operates its proprietary Data Center in Hardin MT with a maximum power capacity of 105 Megawatts.

Once fully deployed, the Company will have 21,500 Antminer Bitmain S-19 Pro Bitcoin Miners in operation at this facility. The Company also owns 2,060 advanced ASIC Bitcoin Miners at a co-hosted facility in North Dakota.

Marathon Patent Group Inc (NASDAQ:MARA) most recently announced that it and DMG Blockchain Solutions Inc. have entered into a non-binding memorandum of understanding to form Digital Currency Miners of North America, which will be a U.S.-based non-profit entity whose mission is to create a better mining environment for North American miners, to help improve their financial performance, and to create North America’s first cooperative mining pool.

According to the release, Marathon Patent Group and DMG’s U.S. subsidiary, Blockseer, are working together to establish DCMNA, a non-profit entity focused on North American digital currency opportunities, including decentralizing the Bitcoin hashrate and providing more transparency for North American miners. DCMNA’s principal initiative is to create North America’s first cooperative mining pool by licensing Blockseer’s mining pool to all DCMNA members in a cooperative structure. Mining partners who are members will receive rebates based on the hash rate they contribute to the overall pool, thus improving the mining profitability of DCMNA members.

And the stock has been acting well over recent days, up something like 44% in that time.

Marathon Patent Group Inc (NASDAQ:MARA) generated sales of $835K, 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 191.9% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($17.7M against $1.1M).

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