The Bitcoin correction is upon us after the Coinbase Global Inc (NASDAQ:COIN) direct offering. The hype surrounding that process likely pulled in a lot of fast and loose money, which is now on its way out the door in violent fashion.
The weekend featured what can only be described as a flash crash, as Bitcoin fell nearly 13% in less than 30 minutes on Sunday morning when it broke through it primary upward trendline in place since mid-December, when it was still under the $20k level.
The catalyst was likely technical but inextricably tied to the excess of recent speculative inflows following its breakout about the $62k level into the COIN listing.
That will likely present a tough opening for mainstays in the space on the equities side such as Square Inc (NYSE:SQ), Paypal Holdings Inc, (NASDAQ:PYPL), and MicroStrategy Incorporated (NASDAQ:MSTR).
However, the flip side of the coin as also very present: the shakeout in play right now will create fresh opportunities in the space and may provide interested speculators with choice levels in emerging names, such as Riot Blockchain Inc (NASDAQ:RIOT), ISW Holdings Ord Shs (OTCMKTS:ISWH), and Canaan Inc – ADR (NASDAQ:CAN).
Riot Blockchain Inc (NASDAQ:RIOT) is expanding and upgrading its mining operations by securing the most energy efficient miners currently available. The company also holds certain non-controlling investments in blockchain technology companies.
Riot is headquartered in Castle Rock, Colorado, and the company’s mining facility operates out of upstate New York, under a co-location hosting agreement with Coinmint.
Riot Blockchain Inc (NASDAQ:RIOT) recently announced that it will achieve an estimated hash rate capacity of 1.06 Exahash per second with the deployment of the newly received 2,002 S19 Pro Antminers.
“Exceeding 1 EH/s in hash rate capacity marks a major milestone for the Company,” said Jason Les, CEO of Riot. “While we are proud of this accomplishment, we view it as the successful completion of just one of many steps of our ongoing growth plan. Riot continues to receive and deploy next-generation miners from Bitmain and remains on schedule to more than triple our currently deployed capacity by the fourth 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 RIOT shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -10% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
Riot Blockchain Inc (NASDAQ:RIOT) managed to rope in revenues totaling $5.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 340.7%, 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 ($235M against $2.4M).
ISW Holdings (OTCMKTS:ISWH) has made a serious cryptocurrency mining investment over the past year and now has strong and growing mining capacity and equipment deals in the works, with operations in partnership with Bit5ive in Pennsylvania and a coming footprint in Georgia.
When Bitcoin was still at $10k/coin, ISWH was engaged in a long-term strategy to drive shareholder value in the space with its POD5IVE strategy. Based on publicly available information, the company is on track for very strong growth in 2021 based on the launch and ramp-up of its crypto operations.
ISW Holdings (OTCMKTS:ISWH) conducts mining through its Proceso POD5IVE mining pod, a fully self-contained high-PUE mining solution designed, assembled, and installed in partnership with Bit5ive at the Bit5ive 100 MW renewable energy cryptocurrency mining facility in Pennsylvania.
It has since tripled its fleet of mining pods. Each pod is powered by 280 mining rigs and is capable of driving roughly $2.9 million in annualized revenues (at current cryptocurrency price levels).
ISW Holdings continues to build out its own mining capacity, with plans to bring multiple additional pods online this year. However, data from pod mining operations is also being collected for the purpose of marketing the POD5IVE datacenter to other businesses and individuals interested in a self-contained industry-leading cryptocurrency mining solution.
ISW Holdings (OTCMKTS:ISWH) also continues to make good on its Anti-Dilution Initiative, which was established in 2020. To date, the Company has reduced outstanding shares by nearly 25%, reduced authorized shares by 88% down to 60 million, and eliminated over $3.4 million (or 94%) of outstanding convertible debt. As noted in its recent corporate update, the Company anticipates at least threefold growth in topline performance in 2021 versus 2020 as its expanding crypto mining operations fully ramp up.
Canaan Inc – ADR (NASDAQ:CAN) bills itself as a company that provides high-performance computing solutions to efficiently solve complex problems. In 2016, Canaan successfully initiated the production of its first 16nm chip and passed the test to receive China’s national high-tech enterprise certification. In 2018, Canaan achieved major technological breakthroughs to launch the K210, the world’s first-ever RISC-V-based edge artificial intelligence (AI) chip, which is now widely used for access control in situations such as smart door locks and more.
Canaan Inc. is currently focused on the research and development of advanced technology, including such areas as AI chips, AI algorithms, AI architectures, system on a chip (SoC) integration and chip integration. Using the AI chip as its base, Canaan Inc. has established an intellectual value chain. Canaan Inc. also provides a suite of AI service solutions and is able to tailor these solutions to the needs of its partners.
Canaan Inc – ADR (NASDAQ:CAN) most recently announced its unaudited financial results for the three months and twelve months ended December 31, 2020, including: Total computing power sold was 0.2 million Thash/s, representing a year-over-year decrease of 93.1% from 2.9 million Thash/s in the same period of 2019 and a quarter-over-quarter decrease of 93.1% from 2.9 million Thash/s in the third quarter of 2020; Total net revenues decreased to RMB38.2 million (US$5.9 million) from RMB463.2 million in the same period of 2019 and RMB163.0 million in the third quarter of 2020; and Gross profit was RMB9.1 million (US$1.4 million) compared to a gross loss of RMB673.4 million in the same period of 2019 and a gross loss of RMB17.0 million in the third quarter of 2020.
Mr. Nangeng Zhang, Chairman and Chief Executive Officer of Canaan, commented, “Although the outbreak of COVID-19 caused supply chain disruptions and thus negatively impacted our revenues in the fourth quarter of 2020, our market leadership has enabled us to attain US$174 million of contracted orders with US$66 million of cash advance from customers as of December 31, 2020, thus laying a solid foundation for substantial revenue growth in 2021. During the fourth quarter, we fueled our overseas expansion, invested in our R&D capabilities, refined our supply chain management, and started mass production of our next-generation A12 series of bitcoin mining machines. All of those efforts have enabled us to begin delivering the A12 series of products at a large scale in the first quarter of 2021. In addition to fortifying our core mining machine business, we also achieved meaningful progress in our AI and Artificial IoT segments, both of which we believe have solid growth potential. After deep analysis of specific application use cases and the current market demand for computing power, we designed two new series of AI chips that will be in production in the second half 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 CAN shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -27% on above average trading volume. Canaan Inc – ADR (NASDAQ:CAN) pulled in sales of $23.6M in its last reported quarterly financials, representing top line growth of 308.3%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($56.7M against $24.4M).