ISW Holdings Inc (OTCMKTS:ISWH) is a stock we have covered in the past, and one that now looks increasingly poised for a potential breakout above a range resistance level that has defined the stock over the past five months.
One catalyst that seems destined to be retroactively “blamed” for such an event – were it to occur – is the company’s recent transition into the Crypto mining capital equipment sector. This move took shape through its new joint venture with Bit5ive LLC, a global leader in cryptocurrency mining and innovative turnkey mining solutions.
According to the release, 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.
Which Way the Wind Blows
The key here is really about whether or not this space is back in serious expansion mode. We saw a boom here from 2015 through 2017 and into the first half of 2018. But the bear market in Bitcoin took wind out of its sales both directly by the depreciation in the means to monetize owning and operating crypto mining equipment and due to the flood of used equipment onto the market in the second half of 2018 as mining farms closed down and sold off machines.
But those bear catalysts may have run their course as technology has improved and excitement has returned around crypto mining with crypto prices soaring again and interstitial technology improving to depress coin production pricing in terms of facilities or energy use.
In an excellent signal for ISWH and others in the space, new evidence has emerged in recent days on this front: Core Scientific has purchased some nearly 18,000 Antminer s19s from Chinese ASIC chip manufacturer Bitmain.
Some of the new, best-in-class machines have already been installed in Core Scientific’s data centers, while the rest will come online between now and the end of September. According to the mining firm, this represents the largest shipment of Antminer s19s to the United States, as COVID-19 interrupted supply chains for the newly-introduced model in Q1 of 2020.
According to coverage in livebitcoinnews.com, “Russell Cann – chief customer success officer of Core Scientific – claims that the company can quickly grow to encompass roughly 450MW of power at its present headquarters. In addition, approximately 46 percent of the company’s mining equipment will run via renewable energy sources such as natural gas.”
The big point we wish to make here is simply that this is not the kind of story that you see in a bearish context for mining equipment names. ISWH is now a part of that industry and is likely well set up to benefit from the rising tide as companies like Core Scientific strive to build out their mining resources.
The price of Bitcoin is one standard indication of this backdrop, with BTC appreciating as much as 125% since the middle of March. Even more impressive, Ethereum has run as much as 400% during the same time.
Investors searching for a store of value (digital gold) during a period of massive fiat currency debasement due to the coronavirus pandemic is certainly helping to foster further strength in these moves. But, ultimately, the cyclical underpinnings of the mining equipment space for the crypto sector appear to be lined up for a strong path ahead for companies lined up to benefit from a coming surge in demand for that equipment.
“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.”
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