The story around bitcoin continues to evolve and has enormous implications for stocks in the space, including Riot Blockchain Inc (NASDAQ: RIOT), HIVE Blockchain Technologies Ltd (OTC US: HVBTF), Exxe Group Inc (OTC US: AXXA), and Marathon Patent Group Inc (NASDAQ: MARA).
According to a CNBC article out this week, the network-effect momentum toward increasing mainstream adoption for Bitcoin could be set to rise up another significant notch over coming months.
The key step, according to the piece, is a program through cryptocurrency custody provider NYDIG that will allow hundreds of banks to offer crypto services whereby customers will be able to buy, hold and sell bitcoin through their existing accounts.
From one model of thinking, this process could directly drive further value and price momentum in the leading virtual currency.
Many of the banks that have already reportedly enrolled to take part in the program are smaller boutique or regional banks. But the service offering could steer business and put pressure on larger banks like the systemically important brands like JPM and BAC to start offering a similar level of accessibility, which would further drive the same strong network effect into play.
The network effect is the main driver, by many accounts, of cryptocurrency value. Currencies are only really value to the extent they can function as a medium of exchange. And that function has primacy over the store-of-value idea – in other words, bitcoin only works as a store of value because it can be predicted to have a widening applicability as a currency.
The one is dependent on the other, and the other is dependent on the network effect – ie, the more established it becomes, the more valuable it can become.
That has enormous implications for stocks in the space.
Riot Blockchain Inc (NASDAQ: RIOT) is one of the most obvious plays in the space.
The company holds non-controlling investments in blockchain technology companies and is one of the most readily identified on any list of stocks in the crypto space. It’s a mainstay for traders in the space at this point, and for good reason. 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 an operations update that includes an unaudited Bitcoin production and an unaudited BTC holdings update, through March 2021.
The company posted huge gains in mining results. In March 2021, Riot produced 187 BTC, an increase of 80% over its pre-halving March 2020 production of 104 BTC. In Q1 2021, the Company produced 491 BTC, an increase of 75% over its pre-halving Q1 2020 production of 281 BTC. As of March 31, 2021, Riot holds over 1,565 BTC on its balance sheet, all of which was produced by its mining operations.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action RIOT shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -17% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -24%.
Riot Blockchain Inc (NASDAQ: RIOT) pulled in sales of $5.3M in its last reported quarterly financials, representing top line growth of 340.7%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($235M against $2.4M).
HIVE Blockchain Technologies Ltd (OTCMKTS: HVBTF) is another clear mainstay in the crypto mining investment game.
HIVE owns state-of-the-art green energy-powered data centre facilities in Canada, Sweden, and Iceland which produce newly minted digital currencies like Bitcoin and Ethereum continuously on the cloud. Its deployments provide shareholders with exposure to the operating margins of digital currency mining as well as a portfolio of crypto coins.
HIVE Blockchain Technologies Ltd (OTCMKTS: HVBTF) recently provided an update on its fiscal year end coin inventory as it continues to HODL coins. According to the release, as previously announced since the beginning of the calendar year 2021 HIVE has been a Holder of all mined Bitcoin and Ethereum coins and has been banking them in cold wallets.
According to management, “As at the completion of our most recently completed fiscal year ended March 31, 2021 we held over 320 Bitcoin and over 20,030 Ethereum coins. Our strategy is to continue holding coins, as we feel that it will benefit our shareholders. The dollar value of our crypto assets at fiscal year end was approximately US $60 million and cash was US $36 million.”
If you’re long this stock, then you’re liking how the stock has responded to the announcement. HVBTF shares have been moving higher over the past week overall, pushing about 5% to the upside on above average trading volume.
HIVE Blockchain Technologies Ltd (OTCMKTS: HVBTF) generated sales of $17.9M, 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 3.2% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($20.8M against $15.4M).
Exxe Group Inc (OTCMKTS: AXXA) is a diversified corporation focusing on acquisitions in real estate, sustainable technology, media, agribusiness, and financial services. Exxe Group is an acquisition-driven company.
While it is diversified, it has picked up big momentum in the fintech space as an exchange services operator and a focused high frequency arbitrageur through its 1Myle Ltd segment. In this role, 1Myle buys and sells alt currencies, including Bitcoin, taking advantage of price differentials.
Exxe Group Inc (OTCMKTS: AXXA) recently reported financial performance metrics for the company’s third fiscal quarter ending December 31, 2020. AXXA generated $9,263,526 gross revenues in 3Q2021 surpassing the $8.2M record set in 2Q2021; a 13% sequential Quarter-over-Quarter growth. Compared to the same period last year, 3Q revenue increased 103% from $4,547,502. Net income for the period was $2,390,875 as compared to net income of $147,272 in 3Q2020, an increase of 1,523%. AXXA’s revenues for the first nine months of FY-2021 were $23,723,944 and grew 183% as compared to $8,373,694 in the same period last year.
Gross revenue per share for the first nine months of FY-21 was $0.048 as compared to $0.021 in the same period last year, an increase of 128%. Total assets were $215,442,113 in 3Q2021 as compared to $180,216,920 in the same period last year, an increase of $35,225,193 or 19%.
Agribusiness was Exxe Group’s single largest revenue contributor as commodity prices for corn, barley, and wheat prices rose during the Third Quarter. The Company also saw solid revenue increases in its e-commerce automotive segment in the German and Swiss markets.
Eduard Nazmiev, Ph.D., CEO, and President of Exxe Group commented: “Exxe Group is pleased to report record total gross revenues of $23.7M and gross revenue per share of $0.048 for the first three Quarters of FY-21. Based on continued strength in the markets in which we operate AXXA is raising its FY-21 annual revenue forecast by 6% from $30.8M to $32.7M.”
Exxe Group Inc (OTCMKTS: AXXA) shares continue to hold a bullish longer-term posture, trading above the rising major 200-day moving average, up about 300% so far this year, but locked in a broad consolidation pattern since February. Support sits in place in the $0.04 area, which may offer new investors an interesting anchor point for new interest.
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) most recently published unaudited bitcoin production and miner installation updates for the first quarter, ended March 31, 2021.
During the recent period the company: Produced 196 new minted bitcoins in the first quarter of 2021, increasing total bitcoin holdings to 5,134.2 with a fair market value of approximately $301.9 million as of March 31, 2021; At March 31, 2021, cash on hand was approximately $212 million and total liquidity, defined as cash and bitcoin holdings, was approximately $513.9 million; and Received approximately 10,300 S-19 Pro ASIC miners from Bitmain during the first quarter of 2021.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action MARA shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -11% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
Marathon Patent Group Inc (NASDAQ: MARA) managed to rope in revenues totaling $2.6M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 854.2%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($143.6M against $1.4M).
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