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Is a Bitcoin ETF Inevitable, and What to do about it? (SQ, OSTK, ISWH, HVBTF)

Want to know how to jet Bitcoin to $100K or higher? Introduce a full-fledged ETF that allows less sophisticated retail market participants to get a piece of the action.

Will it happen? The short answer is Yes. The long answer is Yes definitely. The stars are probably aligning in that direction and the signs are popping up everywhere.

The main factor is simply that Wall Street has started to figure out how to make money off of growing excitement about Bitcoin. Several years ago, this wasn’t the case, so they told the world it was just phony money and the plaything of black-market commercial interests – nothing respectable.

However, this time around, the whole gang is on board. JPM, GS, MS, BAC… they have all established some sort of revenue stream related to cryptocurrencies. That has legitimated the whole process and means, as we see it, it’s just a matter of time before regulators fall into line and we have a true-blue Bitcoin ETF.

One possible lead is the shift in the ticker symbol for the ClearShares Piton Intermediate Fixed Income exchange-traded fund from “PIFI” to “BTC”. That follows news that Grayscale Investments LLC, the company behind the world’s biggest cryptocurrency trust (GBTC), has purchased a stake in ClearShares days after reiterating a desire to convert its fund into one.

Put two and two together and we have a ball rolling.

As such, we take a look here at some of the stocks poised to benefit from continued interest in the crypto bull trend, including: Square Inc (NYSE:SQ), Overstock.com Inc (NASDAQ:OSTK), ISW Holdings Ord Shs (OTCMKTS:ISWH), and HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF).

 

Square Inc (NYSE:SQ) bills itself as a company that provides payment and point-of-sale solutions in the United States and internationally.

The company’s commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions.

Square Inc (NYSE:SQ) made big headlines back in October when it announced that it had purchased approximately 4,709 bitcoins at an aggregate purchase price of $50 million. Bitcoin was trading at just over $10k at the time, and it has already nearly doubled.

Most recently, the company announced an Early Access Programme in Ireland, offering exclusive access to an integrated suite of tools to seamlessly sell in-person and online. This limited-space programme is now seeking SMEs across Ireland who want access to the only comprehensive solution of its kind.

“Since starting with Square we have been able to unlock big improvements for our business, from e-commerce to payments,” said Chris Arnold, owner of Lennox Street Grocer, one of the first businesses to beta test Square in Ireland. “In addition to their fair, transparent pricing, we’ve been really impressed with the ability to have fractional quantities in our point of sale, and the increased transaction speed for tap payments – both make it easier for our buyers to check out both in-store and online, so we never miss a sale. Using the lockdown to switch to Square was a smart choice as we look to the future and post-pandemic growth.”

Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week. Shares of the stock have powered higher over the past month, rallying roughly 7% in that time on strong overall action.

Square Inc (NYSE:SQ) managed to rope in revenues totaling $3.2B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 140.5%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($3.9B against $4.1B, respectively).

 

Overstock.com Inc (NASDAQ:OSTK) bills itself as a an online retailer and technology company based in Salt Lake City, Utah. The stock has become a mainstay among crypto traders given its partnerships and investments in the space.

In addition, its also-ran e-commerce website sells a broad range of new products at low prices, including furniture, décor, rugs, bedding, home improvement, jewelry, and more. The online shopping site, which is visited by nearly 40 million customers a month, also features a marketplace providing customers access to millions of products from third-party sellers.

Overstock.com Inc (NASDAQ:OSTK) recently announced, via its tZERO segment, a leader in blockchain innovation and liquidity for digital assets, that its subsidiary, tZERO ATS, a FINRA member broker-dealer that operates an alternative trading system (ATS), has signed an agreement with Realio, a technology ecosystem for institutional-grade digital assets.

According to the release, this partnership will connect Realio’s global network of real estate and private equity issuers, with an existing pipeline of over $300M in assets to be tokenized, to the tZERO ATS, enabling issuers to elect to provide secondary trading for their digital securities. This is subject to tZERO ATS’s due diligence and applicable regulatory requirements.

If you’re long this stock, then you’re liking how the stock has responded to the announcement. OSTK shares have been moving higher over the past week overall, pushing about 15% to the upside on above average trading volume. OSTK shares have been relatively flat over the past month of action, with very little net movement during that period.

Overstock.com Inc (NASDAQ:OSTK) generated sales of $684M, 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 -6.5% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($520.9M against $327.6M).

 

ISW Holdings (OTCMKTS:ISWH) has made a serious cryptocurrency mining investment over the past year and now has strong and growing mining capacity and equipment deals in the works, with operations in partnership with Bit5ive in Pennsylvania and a coming footprint in Georgia.

When Bitcoin was still at $10k/coin, ISWH was engaged in a long-term strategy to drive shareholder value in the space with its POD5IVE strategy. Based on publicly available information, the company is on track for very strong growth in 2021 based on the launch and ramp-up of its crypto operations.

ISW Holdings (OTCMKTS:ISWH) conducts mining through its Proceso POD5IVE mining pod, a fully self-contained high-PUE mining solution designed, assembled, and installed in partnership with Bit5ive at the Bit5ive 100 MW renewable energy cryptocurrency mining facility in Pennsylvania.

It has since tripled its fleet of mining pods. Each pod is powered by 280 mining rigs and is capable of driving roughly $2.9 million in annualized revenues (at current cryptocurrency price levels).

ISW Holdings continues to build out its own mining capacity, with plans to bring multiple additional pods online this year. However, data from pod mining operations is also being collected for the purpose of marketing the POD5IVE datacenter to other businesses and individuals interested in a self-contained industry-leading cryptocurrency mining solution.

ISW Holdings (OTCMKTS:ISWH) also continues to make good on its Anti-Dilution Initiative, which was established in 2020. To date, the Company has reduced outstanding shares by nearly 25%, reduced authorized shares by 88% down to 60 million, and eliminated over $3.4 million (or 94%) of outstanding convertible debt. As noted in its recent corporate update, the Company anticipates at least threefold growth in topline performance in 2021 versus 2020 as its expanding crypto mining operations fully ramp up.

 

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.

Its 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 provided an update on its fiscal year end coin inventory as it continues to HODL coins. According to the release, as previously announced since the beginning of the calendar year 2021 HIVE has been a Holder of all mined Bitcoin and Ethereum coins and has been banking them in cold wallets.

According to management, “As at the completion of our most recently completed fiscal year ended March 31, 2021, we held over 320 Bitcoin and over 20,030 Ethereum coins. Our strategy is to continue holding coins, as we feel that it will benefit our shareholders. The dollar value of our crypto assets at fiscal year-end was approximately US $60 million and cash was US $36 million.”

Even in light of this news, HVBTF has had a rough past week of trading action, with shares sinking something like -8% 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.

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).

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