As we have noted, the argument for or against Bitcoin comes down to future prospects for legitimacy as a currency system. The “store of value”, “speculative asset”, and “diversification” arguments are all second-order pathways contingent upon its ability to establish itself as a legitimate, mainstream medium of exchange with widespread network-effect legitimacy.
But, ironically, that legitimacy may ultimately depend on its acceptance in financial asset terms.
Hence, the future is looking pretty bright today as the odds of that acceptance appear to be back on an upward trajectory as the CBOE Global Markets Inc. disclosed this week that it is seeking approval to list and trade shares of what could be the first Bitcoin exchange-traded fund in the U.S., according to a regulatory filing that hit on Monday.
In addition, Citigroup strategists put out their case that Bitcoin could eventually play a significant role in international trade due to its decentralized design, absence of FX baggage, and lack of traceability.
That was followed by news that Goldman Sachs is firing its crypto trading desk back up.
With all of 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) provides high-performance computing solutions to efficiently solve complex problems. With the recent boom in Bitcoin prices, the demand for cryptocurrency mining equipment has propelled the stock to new heights, and for good reason.
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. 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.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 7% in that timeframe.
Canaan Inc. – ADR (NASDAQ: CAN) pulled in sales of $23.6M in its last reported quarterly financials, representing top line growth of -75.3%. 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 perhaps the most obvious pure-play equities focus for the Bitcoin boom, trading as a mainstay for traders in the crypto space.
Shares have launched over the past few months as Bitcoin powers higher. The company’s primary mining facility is located in Massena, New York under a colocation agreement with Coinmint.
Riot Blockchain Inc. (NASDAQ: RIOT) 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 stock has suffered a bit of late, with shares of RIOT taking a hit in recent action, down about -17% over the past week.
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) just announced that, following the signing of hosting agreements with Bit5ive LLC and Scrubgrass Generating Company, LLP, based in Kennerdell, PA, the Company has successfully tripled its active Cryptocurrency mining fleet with the addition of two (2) new POD5IVE datacenters.
According to the release, the Company now operates three POD5IVE datacenter units and anticipates a record acceleration in cash flows, revenue growth, and profitability ahead.
Alonzo Pierce, President and Chairman of ISW Holdings, commented, “We have now tripled our mining activity with two new POD5IVE mining pods. We will continue to significantly add to our fleet over coming quarters. We are also building a valuable track record with our Pods, which will have strong value when we enter our next phase and begin to market the Proceso POD5IVE Datacenter as a self-contained, high-efficiency, low-maintenance cryptocurrency mining equipment solution.”
ISW Holdings Ord Shs (OTCMKTS :ISWH) has already been racking up a series of strong sequential growth quarters in its telehealth segment. Now, with the launch and expansion of its crypto mining operations, one can reasonably expect a sharp acceleration in performance. Given its relatively modest market cap, it could be an interesting stock.
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) 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 4% 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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