MGT Capital Investments Inc. (OTCMKTS:MGTI) Is A Big Winner This Week

MGT Capital Investments Inc. (OTCMKTS:MGTI) is a company that we keep coming back to here at Insider Financial. We initially highlighted it last year as one to watch on the back of McAfee taking the helm and attempting to redress the company as a sort of hacker friendly cyber security entity. Towards the end of last year, however, the thesis changed slightly, as management once again pivoted towards the cryptocurrency space and set up a mining operation.At the time, this pivot was something of a risk. The cryptocurrency environment was still very much on the fringe of even the technological community and the potential reward on a shift in focus towards the sector, and the reallocation of resources as such, was a play with an uncertain outcome.During the months subsequent to this pivot, however, McAfee's move has proven a smart one. The cryptocurrency space, buoyed by the rise in the value of its flagship asset bitcoin, has hit the mainstream and companies are scrambling to get a piece of the action. MGT had already positioned itself to benefit from any mainstream drive and – as such – set itself up as one of the top plays for anyone looking to pick up an exposure to the cryptocurrency space without having to buy and store bitcoin.Indeed, we highlighted it as one of our top bitcoin plays this week as part of this piece.Turns out that we were right to do so. During the session on Thursday, MGT picked up a 23% run and is up more than 83% this week alone. The latest run comes on the back of the company putting out a press release updating markets as to the state of – you guessed it – its bitcoin operations.This is something we've been waiting for for a while. As mentioned, other companies are scrambling to claim some degree of linkage to the digital currency space (and there have been some tenuous links) and with MGT already well established in the sector we'd have expected the company to lay claim to this establishing earlier than it has.Anyway, the news is here and it looks good.We learned that the company has mined 1,000 bitcoins since it began operations in September 2016. At current price, that's $4.5 million worth of bitcoins. We don't know whether McAfee has held these coins in storage or whether he's converted them to fiat since mining (the hope for shareholders is that the former is true) but we do know that the processing power of the facility has increased since initiation – the latest release detailed the linking of 650 fresh AntMiners to the setup and the plan to get these miners operational at some point over the next two weeks – and that the second half of 2017 should bring with it substantially higher rate of reward (in terms of bitcoins earned for processing transactions on the block) than did the first half.We also learned that MGT has established a corporate restructuring to separate its crypto assets form its cyber operations and that it has appointed Stephen Schaeffer as President of a new arm called MGT Crypto-Capital Strategies.Bottom line here is that McAfee's strategy of establishing MGT as an early mover in the bitcoin space is paying off and the company and its shareholders are drawing benefit as a result. While bitcoin continues to increase in value, which is far from an unreasonable suggestion given current macroeconomic factors, and while MGT continues to focus its resources on mining bitcoin (and other profitable cryptocurrencies, such as Ethereum, as we outlined in this piece) there's plenty of upside available on current pricing.Keep in mind that there's always the potential for a raise with a tech company at this end of the market and that potential adds a degree of dilution risk to the situation. Sure, MGT is able to draw its own capital base through its mining facility but the capital outlay to expand a facility like that which MGT is building is considerable and the company may need to boost its resources to grow alongside wider industry expansion.Take a look at our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on MGTI, sign up below!Image courtesy of Steve Garfield via FlickrDisclosure: We have no position in MGTI and have not been compensated for this article.