Big Shift | Crypto Mining Stocks & Bitcoin.

hey everyone kevin here data from

cambridge bitcoin electricity

consumption index that's a mouthful

shows that the united states is now the

number one location for bitcoin miners

back in may chinese financial officials

announced their plan to crack down on

financial institutions offering any

crypto related services of course and

this is despite the fact that one year

ago today mainland china was responsible

for 67

of all bitcoin mining which is insane

but as of july of this year the united

states is the leader with over 35.4

percent of all bitcoin mining happening

in the united states your next runner-up

is not borat but it might be his home

country

kazakhstan at 18.1 percent russia at

11.2 and canada at 9.6

kazakhstan's president has also signed a

new law now taxing cryptocurrency miners

in the country slightly on a per

kilowatt-hour basis which is actually

seen as also bullish because it's kind

of a way of saying hey like we're good

keep mining we like it but we're going

to take a little bit of revenue and so

this new milestone has raised the

question of hey

should we consider investing in

cryptocurrency miners and i want to give

a little bit of an overview of some of

the cryptocurrency related companies

especially since we now have seven

trillion dollars of stock or equity

companies or just equity in general in

our markets exposed to cryptocurrency

this includes visa mastercard jp morgan

tesla

micro strategy hud 8 bit farms marathon

digital riot blockchain you name it a

lot of companies are now exposed to

cryptocurrency this is a very very huge

market the cryptocurrency markets around

two trillion dollars in total seven

trillion dollars though of equity

exposed to cryptocurrency even consider

square as an example and so i thought it

was worth comparing some of the

cryptocurrency miners and trying to

understand what some of the differences

are of the miners and so what i wanted

to do is a compare

how much bitcoin a lot of these miners

actually huddle

how much their market cap is and then

we'll kind of compare those

and

we'll explain why then we'll also kind

of compare some of the hash rates of

these companies which would just show us

how potentially powerful they are at uh

at expanding their operations and how

efficient they are

and uh yeah we'll do a quick little

comparison so

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all right folks let's now compare some

of these companies so i like to know how

much bitcoin some of these companies are

hodling

then once i know how much they're

hodling i can calculate a market value

for that bitcoin and then compare it to

how much the stock market is valuing

them for so let me give you an example

this right here that i'm pulling up on

screen is hut 8 mining you can see that

they hold

4724 bitcoin as of september 30th that's

worth about at the time when i wrote

this down bitcoin's gone up a little bit

uh but at the time i wrote this down

that was worth around 270 million

dollars

in in united states dollars since hud 8

is a canadian company i've also

interviewed their ceo twice you can go

to youtube and just type in meet kevin

hut 8 and you'll find those interviews

but anyway they're selling for a market

cap of 1.74 billion usd

that is about 6.4 extra bitcoin value so

if you're just trying to buy the miners

because of bitcoin keep in mind that

most of your money is actually going

towards the company itself

and not bitcoin value

so let me make that a little clear if

you take 270 million divided by 1.74 the

market cap

or uh 1740 this is the better

calculation that means only about 15.5

percent of the money you put into hud-8

stock is actually going to owning some

share of bitcoin the other about 85

is going to owning a company that

arranges miners and computers now one

thing i thought was interesting when i

was going through the investor relations

reports

and and the filings for hud 8 there was

not a lot of talk about research and

development when there was there were

not a lot of

i couldn't find any expenses related to

research and development so in my

opinion you're not really paying for

intellectual property you're not really

paying for research and development

you're basically just paying for which

company is able to string together the

nicest and potentially most efficient

array of miners that are going to have

the most long-term value because the

issue is mining machines

depreciate over time they become less

functional and less valuable so if 85

percent of your money is going to minor

like the mining equipment you'd want to

make sure that mining equipment was

really really good so i i can't really

recommend

a mining company as a way as an indirect

way to own bitcoin uh even though this

stock tends to move with bitcoin a lot

you're really paying a lot for i mean 85

of your money is really going to the

mining devices themselves

for the nasdaq they have a hash rate of

1.37 extra hashes per second

this is as of september 15th they have a

target of about 2.5 to 3 by year end and

6 by mid-2022 uh this is just a way that

they want to grow their business in

terms of how much they're capable of

mining

uh the greater the hash rate for the

company the more potentially that they

could mine and contribute to

the global

hash rates

of bitcoin

so uh and take a share of

hud 8 it's worth noting takes about 1

of the global

mining of bitcoin so it gives you a

little bit of a scale just one percent

in hud-8 and they're worth 1.74 billion

dollars then you've got bit farms bit

farms has about 2300 bitcoin as of

october 1st 130 1.3 million usd dollar

equivalent at the time i wrote this down

that brings them to a market cap of

about 6.7 times btc value or i'm sorry

market cap of about 880 million dollars

which is uh about a multiple of 6.7

times bitcoin's value this shows you

that they're actually pretty similarly

valued to hud 8 which i thought was

interesting

they are sitting at right now about 1.53

extra hashes

or uh i should say what uh x yeah x a

hash per second there we go it's in this

bizarre word

uh that is a that is a multiple

of uh terra hashes which is oftentimes

what we hear when we talk about um

bitcoin mining

then we've got marathon digital they've

got quite a bit they've got

7035 of bitcoin now it's worth noting

that marathon digital uh it seems to be

more of i hate to say it but like a

patent troll

than uh than a bitcoin miner and i know

that sounds kind of insulting but uh

marathon digital makes a lot of money

winning

settlements with companies by suing them

for potential patent violations so i it

kind of makes sense that they're selling

for a greater multiple of bitcoin value

to market cap they've got about 401

million worth of bitcoin the market cap

sitting about 4.26 billion and now

that's why they have this elevated

multiple of 10.6

in terms of bitcoin value to market a

cap

they've got about 2.3 in the hash rate

level they're targeting a huge expansion

here they think they can get to 13.3 by

mid next year then you get to riot

blockchain they hold

3534 bitcoin as of september 30th they

trade for about 12.4 times bitcoin value

so kind of surprising that they have

this big spread and don't have the other

big sources of revenue like potentially

marathon digital does there might be

something particularly that i might be

missing here though what we're looking

at here is that riot is really just the

most expensive just based on bitcoin

holdings

and they've got a substantially lower

hash and lower hash target than

companies like marathon

which uh which are selling for a rich

multiple as well but have other sources

of revenue then folks you get to the

opposite end of the spectrum and this is

a company like microstrategy which

huddles 108

9992 bitcoin the most out of all of

these that's worth 9.2 billion dollars

its market cap is

7.06 billion dollars and it's really

only trading for 1.1 times its bitcoin

value and quite frankly that's because

the company doesn't have much actual

value beyond its bitcoin holding it's

not mining it's not doing anything

special the company was kind of

floundering and failing and investing

into bitcoin or going all into bitcoin

was a hail mary that really worked out

for michael saylor and if you really

want to own bitcoin through a stock

i hate to say it

but microstrategy is probably the

cheapest way uh to expose yourself to

cryptocurrency via a stock than any of

the mining companies just because you're

paying a massive amount of money at the

other mining companies for other aspects

of their businesses like mining or uh

patent trolling

whatever despite all of this what's

really weird and this is just the oddity

of the stock market is take a look at

this when you look at companies like hud

8 mining on a day like today where

bitcoin is rocketing we're over 60 000

now honey mining is up 13.7

you've got marathon digital up 6.7

percent you've got

uh high of up four point five a lot here

riot block chain three point seven five

a lot of these mining companies and

crypto related companies doing very very

well when bitcoin moves fast

uh now

interestingly though the one with the

lowest spread

uh in or or multiple i should say micro

strategy it's only up 2.93

so you have this kind of like

weirdness

of how the miners

seem to grow more when bitcoin moves

more rapidly uh despite the fact that

they're you're getting less bitcoin and

you're getting more mining technology

and hope for future bitcoin in those so

it's worth mentioning that

you're probably going to have more

extreme swings to both the upside and

the downside in some of those higher

multiple miners especially the smaller

cap ones like hud 8 which is a small cap

company but that is pretty incredible

you're pretty close to par at

microstrategy so again if you want to

hold a particular stock that exposes you

to cryptocurrency

microstrategy's the one because they're

really not being valued for doing

anything other than holding bitcoin

well folks there you have it if you

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hands before it expires and folks

thank you for being here i really

appreciate it and we'll see in the next

one goodbye

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