Everyone’s looking for some exposure to bitcoin right now.
The meteoric rise of the cryptocurrency over the last twelve months (at least, that is, as far as shifting to mainstream consciousness is concerned) has traders and investors excited all over the world and numerous exposure options are available. Some people are buying bitcoin outright. Others are looking to pick up an exposure to a public company that operates in the space.
Here at Insider Financial, we’ve served up numerous examples of the latter exposure type over the past six months. Anyone looking to catch up on some of our leading stocks in this sector can do so here.
Anyway, another one just popped up on our radar and it might be one of the best potential exposures we have uncovered yet. The company in question is called Hive and it is a subsidiary of Genesis Mining.
For anybody not familiar with this space, Genesis Mining is a behemoth in the bitcoin mining sector. The company rents out bitcoin mining space to third parties (as well as operates a large bitcoin mining facility of its own) and has been around pretty much since this large-scale mining facility wave began to take shape in the cryptocurrency world.
Previous to its creation of Hive, however, Genesis Mining was a private company. Well, technically, it still is, but it now has access to public market capital (and, in reverse, public market operators have exposure to Genesis) through the new subsidiary.
Right now, Hive is trading under the ticker Pierre Enterprises Ltd. (OTCMKTS:PRELF), which is listed both as Pierre and Leeta Gold Corp on the OTC and as Leeta on the TSX.
Essentially, Genesis has created hive and has brought it to trade publicly by way of a reverse merger into what was nothing more than a shell prior to the event.
So what does Hive do?
The new company’s operations are not dissimilar to that of the parent company, Genesis. Hive owns and operates a large-scale facility that contains bitcoin mining rigs and it plans to both operate and collect bitcoin reward from a number of these rigs itself as well as rent a portion of them out to third-party customers in order to allow said customers to mine bitcoin individually without having to oversee their own facility.
It’s a nice business model and it’s one that is already working – management suggests that the cryptocurrency that has been mined already is enough to satiate operational costs near term, meaning the coins mined during this period will be strengthening the balance sheet from the outset.
An additional feature, however, and one that currently isn’t offered through the legacy Genesis model (at least for the smaller third-party customers, that is) is the eponymous Genesis Hive Platform. It is basically a monitoring platform through which the owner (or renter) of bitcoin mining equipment in a Genesis facility can keep an eye on pretty much every aspect of their rig. Electricity usage, hash power, temperature, reward, all that sort of thing is included as part of the platform and this really serves to differentiate Genesis from any of the companies out there doing a similar thing.
And as we’ve said, this one is already a leader in the space, meaning this differentiation should only serve to amplify dominance near-term.
The primary risk here is rooted in the price of underlying bitcoin and, specifically, the volatility of said price. If bitcoin falls, all of the publicly traded companies associated with the cryptocurrency sector will fall in parallel – Hive not excluded.
With that said, however, the underlying bitcoin price is pretty much recovered from last week’s correction and looks set to continue to appreciate further heading into the close of 2017.
We will be updating our subscribers as soon as we know more. For the latest updates on HIVE/PRELF, sign up below!
Image courtesy of Marko Ahtisaari via Flickr
Disclosure: We have no position in HIVE/PRELF and have not been compensated for this article.