Hedge-Like Properties of Bitcoin and Other Digital Currencies are Driving Crypto Mining Stocks Up

Hedge-Like Properties of Bitcoin and Other Digital Currencies are Driving Crypto Mining Stocks Up

VANCOUVER – USA News Group – A confusing series of what appeared to be conflicting messages came within days of each other from JPMorgan Chase & Co. (NYSE:JPM), regarding cryptocurrencies—in particular Bitcoin. It began with reports surfaced of JP Morgan Chase backing Bitcoin, and saying cryptocurrency is a better hedge against inflation than gold. But within days, the investment firm’s CEO Jamie Dimon, came out and said, “I personally think that bitcoin is worthless”. Within the same week of JPM’s statements, Bitcoin’s price had gained over 18%, causing more attention to gains being made by crypto miners including Riot Blockchain, Inc. (NASDAQ:RIOT), Marathon Digital Holdings, Inc. (NASDAQ:MARA), Hut 8 Mining Corp. (NASDAQ:HUT) (TSX:HUT), and even Hello Pal International Inc. (CSE:HP) (OTC:HLLPF) the first listed company with primary exposure to Dogecoin (DOGE).

Primary Dogecoin/Litecoin miners and online live streaming platform providers Hello Pal International Inc. (CSE:HP) (OTC:HLLPF) announced recently that they’re in the process of upgrading their Litecoin/Dogecoin mining rigs to the latest Antminer L7 Model.

In the announcement, it was stated that Hello Pal has purchased 100 units of Antminer L7 mining rigs, which are the latest Litecoin/Dogecoin mining rigs to be released by Bitmain. L7 mining rigs have a hashrate of 9500 MH/s, which is 19 times more than that of the existing L3+, and ranking it as one of the most profitable mining rig in the world currently on the market.

The company also recently gave an update of its September 2021 revenues, which totaled ~C$2.7 million for the month. Among those revenues, cryptocurrency mining gave the highest gross margins for the period, delivering 68%.

For these crypto-mining operations, there was significant volatility in cryptocurrency spot prices, which resulted in slightly lower cryptocurrency revenues than August, when the company hit a record of C$3 million in monthly revenue.

However, Hello Pal also needed to adjust operations, by relocating more and more mining rigs out of China due to the country’s ban on crypto operations. Hello Pal expects its crypto-mining operations to reach full capacity again sometime over the next two to three months.

"We've been very fortunate in having [partners] Shanghai Yitang helping us navigate the current fast-changing cryptocurrency environment in China," said KL Wong, Founder and Chairman of Hello Pal. "Although there may be some delay compared to our initial expectations, we do not foresee any major hurdles in implementing our original plans regarding crypto-mining and its incorporation into our international social platform."

A recent note from JPMorgan Chase & Co. (NYSE:JPM) stated that: “Institutional investors appear to be returning to Bitcoin, perhaps seeing it as a better inflation hedge than gold.”

JP Morgan believes this third rally is fuelled by “the reemergence of inflation concerns among investors” and they are trying to use Bitcoin as a hedge against it. However, though the company is hedging with BTC, that doesn’t mean its CEO likes it.

“I personally think that Bitcoin is worthless,” said CEO Jamie Dimon, who isn’t a stranger to sharing his real feelings towards the digital currency, despite his company’s offer to clients exposure to BTC. “Our clients are adults. They disagree. That’s what makes markets. So, if they want to have access to buy yourself bitcoin, we can’t custody it but we could give them legitimate, as clean as possible, access.”

Riot Blockchain, Inc. (NASDAQ:RIOT) recently announced its September 2021 production and operations update, which included the miner having produced 406 Bitcoins (+US$23.3 million at US$57,436 per 1 BTC prices).

The production numbers marked an increase of 346% over Riot’s September 2020 production of 91 BTC. As of the end of September, Riot held approximately 3,534 BTC (~US$203 million), all of which were produced by the company’s self-mining operations.

Riot currently has a deployed fleet of approximately 25,646 miners, with a hash rate capacity of 2.6 exahash per second.

Marathon Digital Holdings, Inc. (NASDAQ:MARA) also recently released its September 2021 production and mining operation updates, which included an increase of 91% quarter-over-quarter to 1,252.4 BTC (~US$71.9 million), as the company secured a $100 million revolving line of credit with Silvergate Bank.

In September 2021 alone, Marathon produced 340.6 newly minted bitcoins (~US$19.56 million), increasing the company’s total bitcoin holdings to approximately 7,305 BTC (~US$404 million).

Marathon reported it had received approximately 26,960 top-tier ASIC miners from manufacturers Bitmain year to date, with an additional 8,459 ASIC miners currently in transit. Currently, the company has an existing mining fleet of 25,272 active miners, producing approximately 2.7 EH/s.

Toronto-based Hut 8 Mining Corp. (NASDAQ:HUT) (TSX:HUT) also put out its September 2021 mining production numbers, which delivered 264 BTC (~US$15.2 million). The company’s balance held reserve as of September 30, 2021 is 4,724 BTC (~US$271.7 million).

"We are thrilled with our current amount of Bitcoin held in reserve as well as being ahead of schedule on our commitment to the market to have over 5,000 self-mined Bitcoin by end of Q4.", said Jaime Leverton, CEO of Hut 8 Mining.

Hut 8 Mining received and installed 600 servers consisting of 2400 NVIDIA cryptocurrency mining processors ("CMPs") graphics processing unit ("GPUs"), resulting in a daily earning of 7.10 ETH, equivalent to 0.5 BTC/day totaling $25,000 CAD in income per day.

"Our current capacity of deployed CMP GPU miners will continue to earn $25,000 CAD per day, ramping up to the full capacity earnings over this period, which is expected to be at $110,000 CAD per day, based upon current mining economics," said Jason Zaluski, Chief Technology Officer, Hut 8 Mining. "Hut 8's full CMP deployment has been hampered by the supply chain constraints and manufacturing shortages many industries are experiencing globally.”

Article Source: https://usanewsgroup.com/2020/11/16/live-streaming-is-taking-the-market-by-storm/

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