Legitimacy, mainstream acceptance, and constrained supply continue to power the Bitcoin trend higher. Regulatory clarity is a huge issue in this action as well, as US watchdogs appear to have gotten on board with the digital currency despite China’s crackdown over the summer.
Bitcoin ETFs are a good signal of that regulatory glide path. The ProShares Bitcoin Strategy ETF (NYSEARCA:BITO) will have company as VanEck’s Bitcoin Strategy ETF (XBTF) is expected to be available soon. But BITO was the breakthrough. There are now many ETFs coming that pursue a similar model.
Mastercard Inc. (NYSE:MA) also recently presented a key signal through its agreement with Bakkt Holdings Inc. (NYSE:BKKT), which stands to open up just about any consumer transaction to Bitcoin accessibility.
All of that speaks to removal of barriers to demand for Bitcoin.
At the same time, the supply side picture is entirely known – which is a unique factor in the Bitcoin marketplace. We know exactly how many Bitcoins will ever exist – it’s programmatic monetary policy. It’s a certainty. And we also know, as of recent data, that the frozen – or illiquid – supply of Bitcoin just hit a new four-year high, surpassing its high earlier this year. That means that the largest percentage of second-market Bitcoin in four years is now no longer transacting openly, which implies that new demand will have a larger upward price impact than at any time since late 2017, when BTC ran from under $3k to over $16k in a few months.
All of this augurs well for the Bitcoin market, and it may translate into outsized opportunities for investors interested in stocks with exposure to the world’s leading digital currency. With that in mind, we take a look at a few of the most interesting stories in the Bitcoin stock space.
MicroStrategy Inc. (Nasdaq:MSTR) engages in the provision of enterprise analytics and mobility software. The firm designs, develops, markets, and sells software platform through licensing arrangements and cloud-based subscriptions and related services.
The company is well known to bitcoin enthusiasts for its large dedication to holding its sizeable cash reserves in the form of bitcoin. The company now holds 114,042 bitcoins, currently collectively worth around $5.1 billion.
MicroStrategy Inc. (Nasdaq:MSTR) recently announced financial results for the three-month period ended September 30, 2021 (the third quarter of its 2021 fiscal year). “MicroStrategy delivered strong third quarter results that demonstrated successful execution on both our operational and digital asset strategies. Overall demand for the MicroStrategy platform continued to increase, and we are pleased with the growing interest and adoption of our cloud solutions,” said Michael J. Saylor, CEO, MicroStrategy.
“We also significantly expanded our bitcoin holdings in the quarter, adding nearly 9,000 bitcoins to our holdings after successfully raising capital in the quarter through our at-the-market equity offering. Today, MicroStrategy is the world’s largest publicly traded corporate owner of bitcoin with over 114,000 bitcoins. We will continue to evaluate opportunities to raise additional capital to execute on our bitcoin strategy.”
And the stock has been acting well over recent days, up something like 8% in that time. Shares of the stock have powered higher over the past month, rallying roughly 22% in that time on strong overall action.
MicroStrategy Inc. (Nasdaq:MSTR) managed to rope in revenues totaling $125.4M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 13.4%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($57.6M against $275M, respectively).
ISW Holdings (OTC US:ISWH) has been on fire for most of the past year, powering as much as 1,000% higher since May after jumping onto the scene in the cryptocurrency space with a series of game-changing partnerships that now include Bit5ive, Bitmain, and Minerset, among others.
The company is establishing a mining and hosting model at large scale that’s just getting off the ground, as evidenced by its press release out this morning highlighting the company’s large performance gains in Q3, which include Total Revenues up over 2,400%, Assets up over 5,000%, and Liabilities down over 70%, all thanks to the company’s growth as a crypto player along with its stringent anti-dilution policy.
ISW Holdings (OTC US:ISWH) also recently filed for a name and ticker change to “BlockQuarry”, which further helps to bolster the story given the increasingly retail-investor-oriented nature of this equity bull market.
According to the company’s release, the three months ended September 30 exceeded management expectations for growth in the Company’s assets due to positive gains from mining operations as well as greater than anticipated expansion in equipment. This was primarily due to the triggering of a performance incentive clause in the Company’s agreement with Minerset, LLC that granted the Company an additional 150 Bitmain S19 95TH/s state-of-the-art miners carrying a market value of approximately $1.7 million.
“Q3 was a landmark quarter in Company history,” remarked Alonzo Pierce, President and Chairman of ISW Holdings. “We switched on our mining fleet and saw our first substantial mining and hosting revenues hit the books. We also broke ground on our massive cryptocurrency hosting infrastructure and nearly finished the phase 1 build-out to deploy the first 20 MW to on-site Pods. In the process, we have seen a huge growth in the tangible value of the Company, as assets grew considerably while we continued our campaign to stamp out dilution risk through elimination of toxic notes and strict adherence to financing through a combination of cash from operations and non-toxic funding sources. As a result, we were in the best overall shape in our history coming into Q4, which is set to deliver on a much larger scale into year end.”
ISW Holdings (OTC US:ISWH) saw big performance gains in its Q3 data, including news that revenues from operations for the Three Months ended Sep 30 came in at $1.075 million (including deferred revenues), up 2,435% on year-over-year basis; Net Cash increased by over 3,100% year to date to over $2.8 million; Total Assets increased 5,263% year to date to $9.56 million; and Total liabilities decreased 73%, and total derivative liabilities decreased 98% to under $340k. One key dynamic here is that continued performance and value gains at this rate could have the stock poised for a jump onto a major listed exchange before long – something the Company has talked about pursuing over recent months.
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 the development of 200 megawatts of immersion-cooling technology at its Whinstone facility, which to the Company’s knowledge is the Bitcoin mining industry’s first industrial-scale immersion-cooled deployment of Bitcoin mining hardware. According to the release, the development of 200MW of immersion-cooling at industrial-scale is a direct result of the Company’s focus on Bitcoin mining infrastructure development, led by Riot’s leadership team at Whinstone.
“After months of research and development, utilizing partnerships across industries, Riot is proud to be a pioneer in the use of cutting-edge immersion-cooling technology at an unprecedented scale,” said Jason Les, CEO of Riot. “By leveraging technology, industry-leading low power costs, and economies of scale, Riot intends to continue driving operating and capital efficiencies for its self-mining business and its institutional clients. Due to these efficiencies, we anticipate observing an increase in the Company’s hash rate and productivity through 2022, without having to rely solely on purchasing additional ASICs.”
Shares of RIOT have been cruising higher in recent action, up about 12% over the past week. That move has come in a strong technical context, with the stock up over 20% over the past month.
Riot Blockchain Inc. (Nasdaq:RIOT) pulled in revenues of $34.3M during the company’s most recently reported quarterly financial data, driving top line growth topping 1,660% compared to year-ago data. The company is also sitting on a strong balance sheet, with cash levels ($220.2M) exceeding current liabilities ($37.5M) by a wide margin.
Other key names in the Bitcoin stock space include Silvergate Capital Corp. (NYSE:SI) and Hive Blockchain Technologies Ltd. (Nasdaq:HIVE).
