Scott Minerd, legendary investor at Guggenheim, came out yesterday with a relatively stunning new forecast for the Bitcoin market:
“Our fundamental work shows that Bitcoin should be worth about $400,000,” Minerd told Bloomberg Television on Wednesday. “It’s based on the scarcity and relative valuation such as things like gold as a percentage of GDP. So you know, Bitcoin actually has a lot of the attributes of gold and at the same time has an unusual value in terms of transactions.”
His point is, effectively, that Bitcoin is a store of value, like gold, because it is scarce and simultaneously “money”. Some might argue that, while Bitcoin is limited in supply, and therefore, scarce, new cryptocurrencies are being born every day, and, since cryptocurrencies can be exchanged for one another, the supply of cryptocurrency is theoretically infinite.
But this is a flawed argument. Gold can be exchanged for bags of sand. Does that mean gold shouldn’t carry a premium value as a scarce store of value because the supply of sand is effectively infinite (they even have it on other planets!)? More to the point, I can’t buy my groceries with Cardanos or CryptoKitty coins. But, thanks to PayPal, I can buy them with Bitcoin.
Another key point to consider is that the total global market cap of Bitcoin is around $400 billion, while gold is an $11+ trillion market. But gold is tough and costly to store and transport, while Bitcoin is easy and cheap to store and transport.
In this battle, gold has one advantage over Bitcoin: faith that it can’t be compromised technologically. However, provided Bitcoin becomes an increasingly secure asset, we may headed for market-cap parity over time between Bitcoin and Gold, which would support Minerd’s target.
With that in mind, as investors search for equity plays to capitalize on this major Bitcoin bull trend – to find instruments that may provide 10x returns over the short run as they are first discovered by the market – we take a look at a recent upstart in the space: ISW Holdings Inc (OTCMKTS:ISWH).
The Pod5ive Solution
ISW Holdings Inc (OTCMKTS:ISWH) is a micro-cap trading on the OTC. But the company has growing revenues, with six consecutive quarters of sequential double-digit percentage topline growth, growing cash on the balance sheet, and several EBITDA positive report cards in the books.
It also has a partnership with Bit5ive, LLC, a global leader in cryptocurrency mining and innovative turnkey mining solutions.
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.
Together, within this partnership, ISWH has designed, assembled, and shipped its “Pod5ive turnkey mining solution” under the brand, Proceso. The Proceso Pod5ive crypto mining pod is described by the company as one of “… the single most elegant, powerful, and efficient data center pods in the world … Designed in partnership with Bit5ive, and geared primarily for the cryptocurrency mining industry, the Proceso S19 Pod5ive 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.”
Off to Pennsylvania
The latest news from ISW Holdings Inc (OTCMKTS:ISWH) covers two key themes. First, the company announced that the prototype Pod5ive has been shipped to Pennsylvania to take part in the Bit5ive 100MW renewable energy mining project.
“We are now moving into our deployment phase at the Pennsylvania location,” remarked Alonzo Pierce, President and Chairman of ISW Holdings. “Next is Bit5ive’s test and approval process given that our Pod5 is a new design. That will lead shortly to full installation and operations as a state-of-the-art crypto mining solution with industry leading specs.”
This is part of the company’s broad roadmap, as noted in the release, which discusses the company’s vision for commercial returns through its cryptocurrency segment as involving a four-phase process.
According to ISWH, the first phase was about integrating leading design solutions and establishing a supply chain to bring in industry-leading parts and equipment. The second phase was about assembling and shipping its initial unit. The third phase is now getting underway and targets revenue generation from participation in the Bit5ive Pennsylvania project while simultaneously building a track record for the Proceso S19 Pod5ive Datacenter as a global best-in-class solution for mining facilities around the world. This will include installation and operational launch of tangible mining activities. Phase four will entail bringing the Pod5 solution to the market as a crypto mining equipment product, backed by support from the Company’s Bit5ive partnership and the track record that comes together following the launch of mining activities over the near term.
For shareholders, the second theme is also important: the company is eliminating shares, dilution risk, and convertible debt in big chunks. This is a good sign because it suggests management may be more confident now than they have been perhaps ever in their ability to grow and self-fund through organic operational returns.
Given that they have already assembled a high-performance crypto mining solution that’s about to be switched on and start printing money with Bitcoin hitting new all-time highs on a daily basis, this shouldn’t come as a shock.
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