It’s hard. Investors in search of ways to play a long-term thesis that cryptocurrency mining will drive big returns generally have few clear avenues to pursue. You can pick a specific coin and stock up. But you miss the mark. The hard part is finding publicly traded equities that directly benefit from an expansion in demand for the tools needed to mine crypto.
However, as of a couple weeks ago, there is a new choice on the menu that offers up some interesting features: ISW Holdings Inc (OTCMKTS:ISWH).
ISWH is a diversified player, with strong exposure to a number of different sectors and industries, including home healthcare, wellness, renewable energy, logistics and supply chain management, data center colocation, and now cryptocurrency mining capital equipment.
This last category comes about as a function of the company’s recent announcement that it has signed a joint venture agreement with Bit5ive LLC, a global leader in cryptocurrency mining and innovative turnkey mining solutions.
“We are incredibly excited to expand our current portfolio and move into what we believe is a sector poised for strong technological and financial growth,” stated ISW Holdings President and Chairman Alonzo Pierce. “This new joint-venture agreement enables us to collaborate with the experienced team at Bit5ive to innovate the infrastructure needed to run profitable, efficient crypto mining projects, and to take advantage of the incredible growth projected for the crypto market.”
The Long View
The opportunity for pick-and-shovel plays in the crypto mining space may be more remarkable now than ever before, especially if major coins are powering into new long-term bullish trends with the shift to a fiscally centered global policy foundation. The central banks are in overdrive right now, but it is fiscal stimulus that is beginning to grab a hold of the policy steering wheel.
So far in 2020, according to Bank of America analysis, we have seen $8 trillion in global monetary policy stimulus (the central banks). But we have seen $10 trillion in fiscal stimulus during the same period. Why? Because, with interest rates in the developed world already at 0%, and quantitative easing no longer psychologically “shocking” enough to change patterns of behavior by investors, consumers, or borrowers, the central banks have mostly played out their hands.
This was true even before the COVID-19 pandemic closed its grip on the world economy. Now, that problem has only one solution: what Wall Street folks call “the helicopter drop”, which means huge government checks sent out to big populations.
That represents fiscal stimulus at its most naked.
If you think we, as a society, are simply going to pay that $10 trillion back over coming years as straightforward debt, think again. It will be monetized – a complicated word that means we will pay it off by “printing” new currency.
The Plot Thickens
The general public probably isn’t aware of this yet. But that idea will become more and more clear over time. And as that happens, the desire to protect the value of savings by diversifying out of fiat currencies with stores of value like gold and cryptocurrencies will grow. As it does, the desire to possess the means to access more cryptocurrency will also grow, giving rise to increasing demand for premium mining machines.
According to ISWH’s most recent release, its new venture partner, Bit5ive, is an official distribution partner of Bitmain, the industry-leading fabless manufacturer of computing chips and distributor of Antminers to more than 30 countries in Latin America, Central America, and the Caribbean. In addition, Bit5ive is the producer and distributor of POD5 and Power Skid 2.5, the most efficient and successful infrastructure for crypto mining hardware. Bit5ive is quickly becoming one of the largest U.S.-based companies in the cryptocurrency mining and bitcoin farm industry.
But it gets even more interesting: This venture also pairs up very well with the company’s recent partnership with Proceso, LLC.
According to information obtained the ISW Holdings website: “it is no secret that power supply is a major driving force of businesses. An increased need to power the technology and systems that run our complex world makes renewable energy more important than ever. Knowing the importance of renewable energy, we have partnered with Proceso, LLC. to pursue its interest in creation of high-density processing and mobile datacenters delivering via its network of brokers, partners, suppliers, and clients. We are working towards providing a better alternative to fossil fuels and quality of development currently used in datacenters. With Proceso’s future locations in Houston, Texas, Colorado, and Pennsylvania, we intend to build and power our data centers in these locations with renewable energy. This will help companies lower the cost of power to their clients, including providing hosting and colocation services to various growing industries such as cryptocurrency mining and the gaming industry.”
That should give you a relatively complete idea of how the puzzle pieces could be coming together here.
To return to the issue covered at the start, there are very few options for implementing a crypto-centric equity investment thesis. Most companies that make the important tools of the trade are not publicly traded. And the coins themselves can be unpredictable in value, volatile, and faddish. But ISW Holdings Inc (OTCMKTS:ISWH), with its Bit5ive partnership in place, is an interesting new option on the table.
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