FinancialBuzz.com News Commentary
NEW YORK, Oct. 7, 2021 /PRNewswire/ -- This week has seen even more news regarding the acceptance of cryptocurrencies in the overall financial industry. U.S. Bancorp announced that it had launched a cryptocurrency custody service for institutional investment managers who have private funds in the United States and Cayman Islands. According to a report by Reuters, the fifth largest U.S. bank said Bitcoin-focused financial services firm NYDIG will act as a sub-custodian and the service will soon support cryptocurrencies besides Bitcoin as well. "Investor interest in cryptocurrency and demand from our fund services clients have grown strongly over the last few years," Gunjan Kedia, Vice Chair of the bank's Wealth Management and Investment Services said. ISW Holdings Inc. (OTC: ISWH), BIT Mining Limited (NYSE: BTCM), Canaan Inc. (NASDAQ: CAN), The OLB Group, Inc. (NASDAQ: OLB), Bit Digital, Inc. (NASDAQ: BTBT)
As a result of the crypto boom that occurred earlier this year, many companies and organizations have become noticeably more open to blockchain technology and cryptocurrencies. Therefore, it is not surprising that ETFs with a focus on crypto and blockchain are doing so well. "Just over three years ago we launched the first actively-managed ETF focused on the dynamic market segment of blockchain-related stocks," said Amplify CEO Christian Magoon. "BLOK has provided investors with additional portfolio diversification through its unique portfolio makeup that includes the Bitcoin Investment Trust. Blockchain technology is primarily known for one application today: cryptocurrency."
ISW Holdings Inc. (OTC: ISWH), transitioning to "BlockQuarry," pending name change, announced last month for current and prospective shareholders with a more detailed discussion about, "the Company's recent landmark deal with Bitmain Technologies ("Bitmain"), the world's leading producer of cryptocurrency mining hardware and a leading global cryptocurrency mining firm.
Total Mining Capacity and Timeline to Launch. The deal will involve 56,000 Bitmain mining rigs pairing with 200 megawatts ("MW") of power at the Company's "POD- CITY" location in Georgia. The Company expects to have the first 20 MW of power paired with rigs and running full-out by October 2021. The schedule calls for having all 56k miners hooked up to all 200 MW of power and running full-out by October 2022.
Estimated Topline Revenue Impact. The Company estimates that this full complement running at full capacity will be capable of driving estimated annual revenues well in excess of $100 million (over $10 million per month) for ISW Holdings/ BlockQuarry in hosting service fees. This is not contingent upon cryptocurrency pricing.
Key Partners. The partnership is tripartite, between Bitmain, ISW Holdings, and Bit5ive, LLC ("Bit5ive).
Bitmain will bring mining machines, capital, and expertise into the bargain, consuming hosting services and power up to and potentially in excess of 200 MW for a five-year term.
Bit5ive will bring power, hosting services, project management services, and expertise to the table.
ISW Holdings will provide funding, expertise, hosting services, mining services, access to power, and access to public market investors.
Costs Involved. For ISW Holdings, the cost for the entire roll-out to setup and activate mining machines using 200 MW of power will be a total of $62 million. $6 million of this has already been paid. $56 million remains.
Current Mining Operations (excluding Bitmain deal). The Company is currently running 700 miners, representing a mix of Bitmain Antminer S17's, BitMain S19 95TH/ s's, and Canaan Avalons. Those miners are running in POD5 units in Stronghold,Pennsylvania at a site managed by Bit5ive. The current hashrate is 36,000 TH/s, with an upside potential of 54,000 TH/s given current capacity. This operational state is capable of producing annual revenues of $4.8 million to $6 million given current three-month trailing average pricing for major cryptocurrency markets. The Company is also actively expanding its mining operations as the business scales up.
Management Commentary. 'The nature of our business changed significantly last summer when we partnered with Bit5ive and began designing state-of-the-art mining pods with a bold vision and a deep conviction in the value proposition of the cryptocurrency marketplace,' remarked Alonzo Pierce, President and Chairman of ISW Holdings. 'Now, just a bit over a year later, we are on the verge of becoming one of the top players in the cryptocurrency world after bringing Bitmain to the table in a deal that will see all parties unlock significant value. Looking ahead, our hosting service revenues will be stable and substantial, and capable of strong growth. And our mining revenues will fluctuate with prices in the cryptocurrency space. That will give us a strong foundation and enormous growth with a significant non-volatile component. This should put us in position to meet requirements to migrate shares to a major national listed exchange in due course. We have a number of additional catalysts in the works as well, and I look forward to providing more insights in the very near future.'"
BIT Mining Limited (NYSE: BTCM) announced last month that it has entered into a Membership Interest Purchase Agreement and certain other auxiliary agreements (the "Agreements") with Viking Data Centers, LLC ("Viking Data Centers") to jointly invest in the development of a cryptocurrency mining data center space in Ohio (the "Ohio Mining Site") with access to power capacity of up to 85 megawatts ("MW"). Development of the Ohio Mining Site is currently expected to be fully completed in February 2022. As part of its growth strategy, BIT Mining has been executing a robust plan to invest in, acquire and develop high-quality mining resources around the world. The Company has shipped 1,016 mining machines to the United States as of the date of this press release. Going forward, the Company plans to further strengthen its expansion efforts and accelerate its global development.
Canaan Inc. (NASDAQ: CAN) announced back in August that it has received from Mawson Infrastructure Group Inc. (OTCQB: MIGI) ("Mawson") a purchase order (the "Order") for 17,352 bitcoin mining machines with an aggregate operating hash power of 1.5EH. According to the terms of the Order, the Company will deliver the latest generations of its Avalon A1166 and A1246 bitcoin mining machines to Mawson's operations in the U.S. and Australia throughout 2021 and 2022. The Order is in addition to Mawson's previous order placed earlier this year for 11,760 of the Company's A1246 bitcoin mining machines with an aggregate operating hash power of 1.05EH. Headquartered in Sydney, Australia, Mawson is a global digital infrastructure provider with diversified operations across cryptocurrency mining and digital asset management. Mawson currently conducts its bitcoin mining operations in both the U.S. and Australia.
The OLB Group, Inc. (NASDAQ: OLB) reported earlier last month that DMint, Inc., a wholly-owned subsidiary of OLB ("DMint"), is deploying its first lot of some one-hundred cryptocurrency mining computers for operation at its newly acquired data centers. The Antminer S19j Pro is specifically configured to mine Bitcoin and is planned to be up and running by the end of September. "Putting these new mining computers to work is the first step in building out our cryptocurrency mining operations that are expected to grow to serve some one thousand miners by the end of the year," said Ronny Yakov, OLB Chief Executive Officer. "We recognize the high energy requirements and potential environmental impact of cryptocurrency mining, and DMint's business plan includes our commitment to utilize green energy sources."
Bit Digital, Inc. (NASDAQ: BTBT) and Digihost Technology Inc. announced earlier in July that the Companies have entered into a second strategic co-mining agreement (the "Agreement"). Pursuant to the terms of the Agreement, Digihost will provide certain premises (the "Premises") to Bit Digital for the operation of a 100 MW Bitcoin mining system (the "Miners") to be delivered by Bit Digital for a term of two years. This expanded collaboration between Digihost and Bit Digital is expected to facilitate an additional increase in hashrate of approximately 2 EH between the companies, and a total increase in hashrate between the two companies of approximately 2.4 EH including the initial collaboration agreement that was previously announced on June 10, 2021.
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