Cryptocurrency stocks: Stacking satoshis

Grayscale Bitcoin Trust towers over the crypto industry as the world’s biggest investment vehicle for digital currencies. The asset manager holds a staggering 650,000 BTC worth around $13bn, or nearly $50bn when Bitcoin was at its peak. These guys have got experience and time on their side though – the firm has been in the game since 2013 when a single BTC was going for about $100. Nowadays, GBTC battles with the SEC for permission to convert its fund into an exchange-traded fund offering Wall Street investors spot Bitcoin. GBTC is publicly traded and saw its shares hammered in 2022.

Japan-based online financial conglomerate SBI Holdings is no newcomer to the crypto space. The group first spotted an opportunity in 2016 when it was planning the launch of Japan’s first bank-backed digital asset exchange – SBI Virtual Currencies. Fast forwarding to today, SBI is keeping busy on the pioneering front whipping up the country’s first cryptocurrency fund. The digital-asset investment house wants crypto to be seen as a long-term asset and not simply as a speculation. To do that, the firm has the tough job of persuading regulators that Bitcoin and other tokens deserve their own place right next to traditional assets.

Don’t bet the farm on crypto. Well, that’s if you’re not Michael Saylor, founder of Bitcoin-hoarding company MicroStrategy. Saylor keeps finding ways to stack more satoshis. Splurging on BTC has so far failed to pay off though and MicroStrategy’s roughly 130,000 BTC have come with a heavy $2.4bn debt – an expensive price for a software maker worth around $4bn. But Michael Saylor, a devoted Bitcoin maxi, remains undeterred. After his firm reported a 2Q2022 net loss of more than $1bn, Saylor stepped down as CEO and said he will use his time advocating for Bitcoin. More than before?

Marathon Digital Holdings is a US-listed Bitcoin mining company that leverages monster-sized computing power to solve complex puzzles on the blockchain. As a reward, the company is compensated in BTC. By July 2022, it held just a little over 10,000 BTC. The miner saw declining production volumes in the first half of 2022; for the second quarter, besides a $192m loss, Marathon Digital unearthed 707 Bitcoins, a 44% slide from the prior quarter. In terms of stock performance, the bear market hasn’t spared the mining rig operator as its shares finished 2022’s first half down by more than 80%.

In the world of miners, it’s all about crypto prices moving up, and Hut 8 Mining would agree. Shares of the Canada-based mining rig operator nosedived when the bullish tide turned in early 2022. For the first six months of the year, Hut 8 stock was down about 80%. In terms of earnings, the first quarter finished with a $55.7m net income, vs. a second-quarter loss of $69m. Rising operational costs pushed the envelope as the average cost of mining 1 BTC amounted to just over $20,000. A revaluation of Bitcoin reserves tilted the firm into the red – a well-known scenario for mining stocks during the market meltdown of Spring of 2022.

Canada-based Hive Blockchain Technologies is both a Bitcoin miner and a distributed ledger company with a solid presence in its homeland, Sweden, and Iceland. In early 2022, the crypto miner held a total of 1,813 BTC and 23,290 Ethereum. Stock-wise, Hive has been doing alright considering the 2022 market turbulence that knocked many crypto firms out of the game. Shares of Hive finished the first six months down just under 70%. In late July, however, the stock surged more than 100% thanks to recovering crypto prices – momentarily, at least.

Riot Blockchain rose to the upper echelons of the crypto mining industry in mid-2021 when it acquired a colossal facility in Texas. A year later, the mining company boasted a fleet of 40k miners tasked with mining hundreds of Bitcoins per month. A surprise revival of crypto assets in July of 2022 sparked a solid move in Riot’s stock – shares of the miner soared more than 70% over the same month even as mining performance flunked with just 318 Bitcoins mined, lower than June’s 412. Still, Riot Blockchain is as volatile as they come – in the first half of 2022, the stock was down more than 60%.

China-based Canaan is a technology company that supplies computing equipment and software services to crypto mining firms. It specializes in chip design and streamlined production in the ASIC field. As the crypto boom of 2017 fizzled out, Canaan quietly became the first crypto company to be listed on the Nasdaq in November 2019. It was then valued at $1.35bn and made a splash for its audacious ambitions – the firm raised just $90m, falling short of its original $400m target. In the second half of 2022, Canaan was down over 50% from its listing price and was sitting on a $760m valuation with shares trading near $3.

Bitfarms is a Canadian crypto mining company. The group boasted a valuation of over $600m in 2021. Besides its Bitcoin gig, the firm has other streams of revenue such as data analytics and electrical engineering. Bitfarms went public in July 2019 when it was listed on the Toronto Stock Exchange. Two years later, the firm landed on the Nasdaq. The cool thing about Bitfarms is its operations are 99% powered with environmentally-friendly hydro power. Bitfarms was not sitting idle during the market rout in early 2022 and used the time to snap up a new facility in the Canadian province of Quebec. The company now operates nine separate farms.

Iris Energy is an eco-friendly mining company. It digs out hundreds of Bitcoins every month thanks to highly efficient proprietary Bitcoin mining data centers powered by 100% renewable energy. Founded in 2018, Iris Energy is based in Australia but has sustainable mining facilities in Canada, Central US, and the Asia-Pacific. The Bitcoin-mining firm pulled in just $36m in 2021 revenue, and whilst it’s publicly traded on the Nasdaq, its shares have never been in the green. In fact, Iris Energy is down nearly 90% from its 2021 IPO priced at $1.5bn and is flagging a risk of default amid a crunch time for public miners.

Maryland-based TeraWulf was founded in 2021 as an American clean-energy Bitcoin mining company. Founder Paul Prager is an energy infrastructure veteran with another company under his name, Beowulf. Prager hoped to transfer his experience into the red-hot crypto market but it looks like that didn’t go exactly to plan. TeraWulf stock is down more than 95% from its peak in November 2021 as it has failed to catch up with the broader market. Still, the company, backed by celebrity Gwyneth Paltrow, was valued at roughly $200m in the second half of 2022 – not that bad after a gigantic drop that ravaged even the firmest believers in the company.

CleanSpark is a fairly obscure US crypto miner that is, in its own ways, weathering the crypto storm and enjoying the warm tailwinds that sweep the industry. The miner, valued at around $250m, held just 420 BTC in March of 2022 after it sold 720 to fund its operations and stay afloat in the market turbulence at the time. CleanSpark kicked off in 2014 as a company that helped people achieve energy independence for their homes and businesses. The crypto boom of 2017-2018 seems to have convinced them to shift to digital tokens and in 2020 the clean-energy firm dipped its toes into developing sustainable infrastructure for Bitcoin mining.

Founded in 2017 in London, Argo Blockchain made its trading debut on the London Stock Exchange a year later, becoming the first crypto company to land among British investors. The company seeks to democratize complex and technical crypto-mining by selling mining packages that allow users to mine their own tokens. The service is powered by servers that are rented for a monthly subscription. Argo jumped on the US-based Nasdaq in February 2021 and enjoyed a hefty boost to its market cap as it hit £500m, up from £25m before moving to America. By late 2022, a bear market and a failed $27m share sale washed out 97% of the firm’s valuation.

US-based Bitcoin mining company Greenidge Generation was a private equity firm before it landed on the Nasdaq in 2021. Prior to that, in 2017, the firm converted a coal plant to natural gas in a move away from Bitcoin’s growing energy problem and into a 100% carbon-neutral mining operation. It boasts a market valuation of around $175m but stock-wise, things aren’t looking so good. After the Nasdaq listing, shares are down more than 90% to trade around $2 a pop as the firm has been stubbornly chasing new lows month after month. How to become a millionaire in a year? Start as a billionaire.

China-based Ebang is a crypto-centric firm involved mainly in the design and development of Application Specific Integrated Circuit (ASIC) chips and Bitcoin miners. The firm is valued at roughly $110m and its stock was relatively unstable in the first six months of 2022 when headwinds toppled industry players. Specifically, shares of Ebang finished the first half down by 60%. Since then, it’s been mostly sideways as miners have been absorbing the crypto winter’s cold winds. The blockchain tech company was founded in 2010 with the mission to sell network devices. The shift to crypto mining helped it list on the Nasdaq in June 2020.

Bit Digital is one of the US-listed crypto mining companies. Trading on the Nasdaq with a share price of just under $1.50, the firm sits on a valuation of around $150m. The figures are down more than 90% from a peak of $25 a pop in early 2021 when business was booming. Since inception in 2017, Bit Digital has mined almost 4,000 Bitcoins through the end of August 2022. The crypto company owns nearly 39,000 Bitcoin miners with operations spanning across the globe. Except China. Bit Digital had to recall a batch of 20,000 machines from China when local authorities banned crypto mining in May 2021.

BIT Mining, as the name itself suggests, is a crypto-centric firm with a focus on Bitcoin mining. It is based in Hong Kong and has been trading on the New York Stock Exchange since 2013. Back then, the firm’s operations were considered super innovative and that’s why investors greeted the listing with elevated enthusiasm as shares soared from $20 to near $50 in about three-months’ time. Today, however, competition has left BIT Mining in the dust and that’s visible by its stock performance. Shares are floating below $0.40, or down more than 97% from listing price, and its market cap sits in the region of $40m.