Shares of MGT Capital Investments Inc (OTCMKTS: MGTI) have started picking up some steam in line with improving sentiments in the cryptocurrency sector. A spike in share price comes on the heels of one of the worst routs, as the stock shed a significant amount of value on cryptocurrencies imploding in 2018.
MGTI Share Price Analysis
A 60% plus spike from one-year lows could as well indicate that the stock has hit bottom and due for a bounce back. Price action activity has gathered pace in recent weeks as investor sentiments about cryptocurrency continue to improve.
MGT Capital Investments is also enjoying renewed investor interest in announcing a restructuring drive as it seeks to shore its bottom line. The company has had to end mining operations in Sweden to focus on U.S operations, where economics are much profitable.
With Bitcoin prices inching higher by the day, the company remains well positioned to register significant returns from its mining operations in the U.S. Recent share price gains has everything to do with a spike in cryptocurrency prices.
MGT Capital Investments has once again started trading in an uptrend, in response to an uptick in Bitcoin prices. A formation of a double bottom at the $0.06 level has opened the door for the stock to edge higher as part of the emerging uptrend.
A violation of the $0.08 resistance level should open the door for the stock to edge higher with the next stop being the $0.15 mark, which happens to be the next resistance level. A spike in market activity in the cryptocurrency sector could see MGT Capital Investments breaking out from current lows.
What Does MGT Capital Investments Do?
MGT Capital Investments is a cryptocurrency-focused company, specializing in Bitcoin mining operations. The company owns mining facilities in Washington, Colorado as well as Oho making it one of the biggest Bitcoin miners in the U.S.
What is MGT Capital Investments Bottoming Out?
MGT Capital Investments has started bottoming out on market sentiments in the cryptocurrency space improving after a rollercoaster 2018. Bitcoin prices edging higher has opened the door for the company to generate significant returns from its mining operations, something that continues to excite investors.
The company has already moved its Bitcoin miners from Sweden to the U.S where it plans to carry out aggressive mining operations. Moving into Colorado Springs should allow the company to enjoy lower costs and more control over expenses, ideal for turning in some profits.
“In order to further increase the company’s flexibility and geographic diversity of sites, we decided to split the miners formerly in Sweden to include a site in east-central Ohio, to complement Colorado Springs. In addition, this Ohio site will provide a testing ground for the containerized solution being developed by MGT and Bit5ive,” said Stephen Schaeffer, Chief Operating Officer.
MGT Capital Investments remains well positioned to benefit on the price of Bitcoin edging higher. The company boasts of a robust mining operation made up of 500 Bitmain S9 miners operating in Washington. In addition, the company has installed 3,000 S9’s machines in Colorado where it plans to maximize lower costs of operations. It is also in the process of setting up mining operations in Ohio.
Bitcoin prices will have to inch higher if MGT Capital Investments is to break-even on its operations and generate significant profits in 2019. In the third quarter, the company generated a net loss of -$7.7 million an improvement from a net loss of -$16.5 million registered in the second quarter.
Bitcoin mining revenues in the quarter were up to $589,000 versus $515,000 generated the previous year. For the company to sustain the momentum on revenue growth, then the Bitcoin price will have to rise and stabilize above the $5,000 mark.
Just like other companies with operations in the cryptocurrency sector, MGT Capital Investments has taken a significant hit on Bitcoin price plunging by more than 80% from record highs of $21,000. The stock experienced one of the worst routs in 2018 as sentiments in the cryptocurrency sector turned sour.
Fast forward, 2019 has started on a roll, as sentiments have improved on Bitcoin bouncing above the $5,000 mark. An increase in the price of the flagship cryptocurrency is essential if MGT Capital Investments is to turn in a profit from its mining operations.
That said the stock is likely to continue edging higher on an increase in Bitcoin price, expected to make mining operations profitable.
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Disclosure: We have no position in MGTI and have not been compensated for this article.