Why the Squeeze May be Brewing for Crypto Stock Bears (ISWH, HVBT, MSTR, MARA, RIOT, PYPL, BTBT, GBTC)

The recent move to ratify Bitcoin as legal tender for El Salvador is one key news event shaping the cryptocurrency marketplace this week. Traders need to take this into account because other countries may follow suit, translating to a new major source of demand from sovereign balance sheets.

However, another storm may be brewing for bitcoin shorts to panic about as new nations adopt ground rules for the cryptocurrency market to establish its growing global role.

According to a recent article at CNBC.com, Ukraine just went down a path for a stable role for cryptocurrency in the country. In a nearly unanimous vote, Ukraine’s Parliament voted in a new standard that makes crypto legal and pushes the bill to the presidential desk where it can be signed into Ukrainian law on firm ground.

The key point here is this: Ukraine is the fifth country in five weeks to take this step. For bitcoin bears, this is an extremely bad sign. These steps are not easy to reverse. And an expanding geopolitical footprint for bitcoin is like the spread of a virus – it has more and more places to find safe harbor if the world’s biggest economic powers decide someday that they don’t want it around, which is the biggest bear argument going. 

That argument appears to be growing increasingly vulnerable, which may be fostering a growing short squeeze risk given the strong component of short interest now in place in the Bitcoin futures market.

This also carries major implications for top cryptocurrency stocks, and we take a closer look at a few of the more compelling names below.

 

HIVE Blockchain Technologies Ltd (NASDAQ:HVBT) engages in building a bridge from the blockchain sector to traditional capital markets. 

The company has established itself as a mainstay player in the emerging crypto mining industry with projects in Canada, Sweden, and Iceland.

HIVE Blockchain Technologies Ltd (NASDAQ:HVBT) recently announced that it ordered 3,000 premium MicroBT WhatsMiners with a total hashrate of 294 Petahash per second (PH/s), with an average efficiency of approximately 34 Watts per Terahash (W/TH), additionally the Company now has HODL over 1,000 Bitcoins in its cold wallets. The Company notes that 294 PH/s would generate approximately 67 Bitcoin per month based on current difficulty levels.

Currently the Company has over 1 Exahash of Bitcoin mining capacity operating, which produces over 225 Bitcoin per month on a run-rate basis at current difficulty levels. The Company believes the difficulty will continue to rise.

Frank Holmes, Executive Chairman of HIVE said, “The continuing work and success that our team has been able to achieve with our strategic partners during these challenging times due to the global shortages in chips and logistics delays in shipping equipment from Asia due to Covid 19 has been remarkable. As a result, we are able to increase our 2022 run-rate revenue by almost 25% with this acquisition, while positioning HIVE to realize a good ROI on capital invested, by making ASIC acquisitions at very attractive $/TH prices, all in pace with the development of our green and clean operating infrastructure. We are not saddled with needing to buy carbon offsets which helps our margins because we are focused on mining buy sourcing geothermal and hydroelectric energy.”

It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things. Shares of the stock have powered higher over the past month, rallying roughly 3% in that time on strong overall action. 

HIVE Blockchain Technologies Ltd (NASDAQ:HVBT) 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 exceeding current liabilities ($20.8M against $15.4M).

 

ISW Holdings (OTC US:ISWH) is one of the big momentum stories in the cryptocurrency space over the past couple months, rising by 500% since May, and nearly doubling in the past few weeks following news of its landmark partnership agreement with Bitmain Technologies as it establishes a rapidly growing footprint in both hosting and mining coins.

ISWH has also recently announced it has filed for a name and ticker change to “BlockQuarry”. The company frames itself as an emerging leader with a growing commitment to blockchain infrastructure, cryptocurrency mining, and collaborative hosting, with partnerships with Bit5ive, Minerset, and Bitmain already in place and an expanding role as a key player in the space.

ISW Holdings (OTC US:ISWH) announced this morning that it will be featured as a presenting company at the H.C. Wainwright 23rd Annual Global Investment Conference, which is being held virtually from September 13 – 15, 2021.

According to its release, ISW Holdings President and Chairman, Alonzo Pierce, will be present to discuss the Company’s vision as an emerging force in the cryptocurrency space, and how it plans to continue to drive growth through a combination of pod-based mining and hosting services across multiple scalable sites. 

Robert Colazzo, CEO of ISW’s partner, Bit5ive LLC, North America’s largest provider of collective management services and mining equipment, will also be present to discuss the plans the partners are beginning to implement in the Southeastern US, including the path to fully launching their POD-CITY vision, involving 200 MW of power and 56,000 state-of-the-art miners.

ISW Holdings (OTC US:ISWH) advisor and Chief Innovation Officer at Bit5ive, Arnaldo Detres, will also discuss POD-CITY, the Company’s progress in Pennsylvania, and broad views on the cryptocurrency marketplace, according to the release.

 

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 its August production and operations updates, including its unaudited Bitcoin production for August 2021 and its miner deployment status.

According to its release, in August 2021, Riot produced 441 BTC, an increase of approximately 451% over its August 2020 production of 80 BTC. Year to date through August 2021, the Company produced a total of 2,051 BTC, an increase of approximately 221% over its production during the same 2020 period of 639 BTC. As of August 31, 2021, Riot held approximately 3,128 BTC, all of which were produced by its self-mining operations. The Company currently has a deployed fleet of approximately 22,050 miners, with a hash rate capacity of 2.2 EH/s.

The stock has suffered a bit of late, with shares of RIOT taking a hit in recent action, down about -19% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -21%. 

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).

 

Other key players in the space include MicroStrategy Incorporated (NASDAQ:MSTR), Marathon Digital Holdings Inc (NASDAQ:MARA), Paypal Holdings Inc (NASDAQ:PYPL), Bit Digital Inc (NASDAQ:BTBT), and Grayscale Bitcoin Trust (Btc) (OTCMKTS:GBTC).

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Published by Lisa Ray

Lisa has a Bachelor of Arts in journalism from Purdue University and 3 years of experience in the publishing field.