| From: Zen Dollar Round | 2/11/2021 10:28:58 PM | | | | | | | Just posted about RIOT in Trader J's thread. I think it's a good way to invest in cryptocurrencies without having to buy them directly. |
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| From: Glenn Petersen | 2/15/2021 9:50:44 PM | | | | | | Bitcoin Miners Posted $354M in Revenue Last Week, Breaking Record From 2017
Last week's mining revenue eclipsed the previous record set in mid December 2017.
Weekly bitcoin mining revenue estimates since 2017
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Zack Voell
CoinDesk
Feb 15, 2021 at 7:44 a.m. CST
Bitcoin miners set a new record for weekly revenue after bringing in $354.4 million last week.
-- Mining revenue growth was helped by the leading cryptocurrency's performance last week following a string of positive developments, culminating in bitcoin (BTC, +3.26%) hitting new record highs over the weekend just below $50,000.
-- "Despite decreasing block reward, mining revenue on a USD basis has trended upwards," said Ethan Vera, co-founder of Seattle-based mining company Luxor Technology, in a direct message with CoinDesk. "This is encouraging for the long term prospects of Bitcoin’s security and continued investments over the next few halving."
-- Weekly revenue eclipsed the previous record of $340 million set in mid-December 2017 near the peak of bitcoin's prior bullish market cycle. CoinDesk revenue estimates based on network fees and block subsidy data from Coin Metrics assume miners sell their bitcoins immediately.
-- Over 15% of the week's revenue was from network fees, continuing a trend of strong growth in fee-based revenue from May 2020, per CoinDesk's prior reporting.
-- "Our miners are incredibly bullish on the future of mining," Vera told CoinDesk. "January and February 2021 have been record months for most of them, and they are taking all of their profits and reinvesting it back into their business to grow future hashrate."
Weekly bitcoin mining revenue estimates since 2017
Source: Coin Metrics, CoinDesk Research
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| From: Julius Wong | 2/18/2021 8:07:53 PM | | | | | | Riot Blockchain: Riding The Bitcoin Wave
Feb. 18, 2021 6:35 PM ETRiot Blockchain, Inc. (RIOT)4 Comments4 Likes
Summary
* Riot Blockchain, Inc. is up over 3 times what it was trading at on January 27.
* Its share price is starting to look frothy - may be time to take some profits off the table.
* The recent news that it has boosted hash rate will offer support in the long term.
* In the short term, the price of bitcoin and technicals will continue to drive its performance.
* The next couple of earnings reports should be positive catalysts for RIOT.
seekingalpha.com |
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| From: Glenn Petersen | 3/21/2021 4:49:49 PM | | | | | | The risky bitcoin buy that’s in a bigger bull market than the cryptocurrency itself
PUBLISHED SUN, MAR 21 202112:42 PM EDT
UPDATED SUN, MAR 21 20211:46 PM EDT
Eric Rosenbaum @ERPROSE
CNBC.com
KEY POINTS
-- Bitcoin mining stocks have generated returns far greater than the bitcoin cryptocurrency in the digital asset’s recent bull market, according to an analysis from Fundstrat Global Advisors.
-- That makes them worth investor attention, but these miners are risky and should be expected to fall more than bitcoin in a digital currency crash.
-- Bitcoin is likely to be a better long-term bet even if the top mining companies have economies of scale established, and for most investors so will any bitcoin ETF approved by the SEC.
All commodities markets have their levered investment bets. Crude oil has wildcat exploration and production companies; gold and precious metals have the mining operations out doing the dirty work in the ground. A commodity of the future, bitcoin, is no exception to the rule that when there’s a scarce resource to exploit in the world, and investors are placing increasing value on it, miners will rush in to stake their claim to the riches.
Recent gains in what may be the most high-risk bitcoin bet of all led Leeor Shimron, vice president of digital asset strategy at Fundstrat Global Advisors, to take a look at the “digital gold rush” in trading of bitcoin miners.
These mining companies are fairly new and young, they lack track records, and some came to market in “roundabout ways” — and some of the biggest, like Riot Blockchain, attracted regulatory scrutiny in their early days. They also have been operating at losses, but Shimon noted they have reached over $1 billion in market cap after investing heavily during the bitcoin downturn in the hardware and facilities that helped them to “strike it big” in the current bitcoin bull market cycle.
High-beta, high-risk bitcoin trading
Shimron described the miners in a note last week to clients who expressed interest in the surging stocks as a “high beta play” on bitcoin. During the recent bull run for the cryptocurrency, during which bitcoin is up 900%, the average return among the biggest publicly traded miners was 5,000%, according to his analysis.
Bitcoin miners, in Shimron’s words, form the core backbone of bitcoin’s blockchain, as they “burn electricity to computer-generate guesses aiming to solve cryptographic puzzles” and generate revenue in the form of mined bitcoin. As the bitcoin is mined, the miners sell the assets to cover their expenses. Many choose to also hold a portion of their mined bitcoin on their corporate balance sheet, a trend which is starting to gain traction with the more digitally-oriented, disruptive CEO class in the broader market, such as Jack Dorsey at Square and Elon Musk at Tesla. Musk just added “Technoking” to his executive title and the Tesla CFO recently had “Master of Coin” added to his. The North American mining company, Marathon Digital Holdings, recently announced it had purchased an additional $150 million worth of bitcoin to hold on its balance sheet.
The largest publicly listed mining companies which the Fundstrat analyst reviewed include the two Nasdaq-listed companies, Riot Blockchain and Marathon Digital Holdings, and two over-the-counter market stocks, Hive Blockchain and Hut 8.
Over the past year, bitcoin miners greatly outperformed bitcoin, a dynamic that Fundstrat Global Advisors says will continue as the bull market plays out, but could turn violently to the downside in any correction.
Fundstrat Global Advisors
Shimron’s analysis shows that the beta these bitcoin mining companies exhibit generates a return of 2.5% for every 1% move in the cryptocurrency. While there is not enough historical data to draw firm conclusions, the miners’ performance is clearly tied to the price of bitcoin, and their trading profile amplifies the upside and downside, he said.
It is a “notoriously competitive industry,” in Shimron’s words, where the ability to be profitable can come down to cheap electricity and access to specialized mining hardware. As bitcoin’s price increases, “miners spin up new rigs or upgrade their hardware with more powerful and efficient machines.”
Marathon recently made a $170 million deal for 70,000 S-19 ASIC miners from Bitmain, which when fully deployed later this year, will up its mining power to 103,000 machines.
This high cost of doing business in bitcoin mining results in low or negative free cash flow and muted earnings, Shimron writes. But the mining companies have for the moment captured the growth of the current bitcoin bull cycle as a result of their spending. (They saw wild trading in the bitcoin boom of 2017, too.)
Now they have also attracted attention from some of the market’s newest forces, as a recent Bloomberg piece noted of the bitcoin miners getting discussed within the WallStreetBets message board on Reddit which fueled the mania in shares of GameStop.
“For investors looking to gain exposure to miners, that beta makes it a great opportunity during the middle of a roaring bull market. ...There are fits and starts and pullbacks, but we still have lots of room to grow here,” Shimron said in an interview with CNBC.
Investing in bitcoin in 2021, and beyond
It is the broader bull market in cryptocurrency that has fueled the miners and Shimon thinks that can continue in 2021, driven by macroeconomic and demographic factors. Fears of inflation will support bitcoin prices, and even amid recent yield pressure from the 10-year Treasury which can act on cryptocurrency as it does on technology stocks, he said it is clear from Fed signalling that the central bank wants to keep its dovish policies in place until 2023.
Another driving force is continued adoption of new digital technology and digital assets from younger investors. “You see younger people gravitate to bitcoin and other digital currencies as opposed to gold and commodities and it speaks to a demographic shift. ... To them it’s not crazy to interact with money in a purely digital way,” he told CNBC.
Last week, Morgan Stanley became the first big Wall Street bank to offer its wealthy clients access to bitcoin. It limited access to clients with at least $2 million given the risks involved.
There already are ways into the crypto market other than the underlying currencies, such as the exchanges which trade coin and soon will be available to more investors. Coinbase was recently valued at $68 billion in the private market and is planning a direct listing on the Nasdaq.
Waiting for a bitcoin ETF in the US
There are three bitcoin ETFs in Canada, and at some point, there may be a bitcoin ETF available in the U.S. The latest attempt at the Securities and Exchange Commission was filed mid-March by VanEck ETFs, but with investors not holding out high hopes the SEC will approve a bitcoin fund soon, they are looking elsewhere for cryptocurrency investment ideas that go beyond buying bitcoin itself.
Shimon, who ran an early-stage cryptocurrency and blockchain venture fund before joining Fundstrat, said he does view the miners as being a foundation for the crypto space. “The top companies will be here to stay,” he said, pointing to the economies of scale investing in equipment which newer entrants will have a tougher time competing against.
After making the “smart move” during the bitcoin bear market to build out operations, current tech sector supply chain shortages caused by Covid may further help the positioning of these miners after the capital they have already put into specialized machines for the space.
Still, like many traders and hedge funds do with gold miners and small-cap oil explorers, he is inclined to trade the bitcoin miners in a bull market run, rather than see them as investments to hold for the long-term.
The outperformance of the SPDR Gold Shares ETF relative to a VanEck ETF tracking an index of gold miners, since 2006.
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Shimron continues to prefer bitcoin as a long-term investment, as well as any ETF ultimately approved by the SEC for U.S. investors. “It is just a matter of time before the SEC approves a bitcoin ETF,” he said. “When a BTC ETF comes, the fees will be low and it will be the safest and easiest way of using traditional rails to get exposure to bitcoin,” he said.
The miners have faced criticism over the huge amounts of electricity required in bitcoin operations, but Shimron’s view comes down to the financials and market performance. (He says there is plenty to criticize about the fiat currency system’s impact on the world, too.)
“It is pretty clear the U.S. dollar as a global reserve currency is on its last legs, not disappearing any time soon, but we are in the later stages of the U.S. dollar as the reserve currency, and decentralized is the next stage.”
Even if the bitcoin mining stocks are too high risk for most investors, he is confident in saying that the world of cryptocurrency should be on everyone’s radar. “This is where everything is going. Finance has been the last vestige that hasn’t been touched by the internet,” Shimron said.
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| To: Glenn Petersen who wrote (8) | 4/7/2021 11:56:47 AM | | From: Glenn Petersen | | | | Riot Blockchain to spend $138.5 million on bitcoin mining hardware, with shipments scheduled through October 2022
by Wolfie Zhao
The Block
April 7, 2021, 11:10AM EDT · 1 min read
Nasdaq-listed bitcoin mining firm Riot Blockchain has placed an order to buy bitcoin miners worth $138.5 million that will ship through October 2022.
The firm said in a statement on Wednesday that it is buying 42,000 units of Bitmain's AntMiner S19j at a cost of $3,300 per set, which means Riot is preordering the future batches at $36 per terahashes per second (TH/s) of computing power. The standard hash rate of an AntMiner S19j is 90 TH/s.
The Block reported last week that spot stock prices for the newest generation of bitcoin mining equipment, such as Bitmain's S19 series, are as high as $120 per TH/s, constituting a five-fold premium compared to their preorder prices months ago.
While Riot's cost for the new orders appears to be considerably cheap compared to those spot prices, the delivery of the new batches will not start until later this year.
Riot said it is poised to receive a minimum of 3,500 units of S19j AntMiners on a monthly basis starting in November, with shipments continuing through October 2022.
At the full deployment, the firm said it is estimated to have 7.7 million TH/s of computing power, or about 4.6% of the network's current total.
Bitcoin's surging prices and the ongoing global chip shortage have significantly driven up the cost of bitcoin mining equipment.
Indeed, Riot inked a deal with Bitmain in August 2020 to invest $17.7 million in 8,000 units of the manufacturer's AntMiner S19 Pro, which were scheduled to be fully delivered by this month.
The standard hash rate of an AntMiner S19 Pro is at 110 TH/s, which means Riot is now paying 50% more for a mining model that is less advanced than the ones it bought last year.
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| From: The Ox | 4/19/2021 9:28:09 AM | | | | | | coingeek.com
Riot Blockchain buys Texas data center for $650M from rival Northern Data
TECH 18 APRIL 2021
Steve Kaaru 
Riot Blockchain (NASDAQ: RIOT) has announced that it’s set to purchase the largest BTC block reward mining center in the United States. It will now reportedly become the largest publicly-traded blockchain mining company globally.
Riot revealed in a press release that it has signed a definitive agreement to acquire Whinstone U.S Inc. from its rival Northern Data AG. It will pay $80 million in cash and $571 million in its common stock, equaling a total transaction value of $651 million. |
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| To: Glenn Petersen who wrote (9) | 7/10/2021 2:28:13 PM | | From: Glenn Petersen | | | | Riot owns Whinstone.
Bitcoin miners break new ground in Texas, a state hailed as the new cryptocurrency capital
The Lone Star State is at the center of global attention to produce bitcoin
By Dalvin Brown
The Washington Post
July 8, 2021|Updated July 8, 2021 at 5:36 p.m. EDT
ROCKDALE, Tex. — Chad Harris, the CEO of Whinstone Inc., the operator of the largest crypto “mine” in North America, remembers one of the last times Texas’s electric power problem became his electric power problem.
It was a Wednesday in June, and evening temperatures were hovering around 94 degrees — far higher than the state usually suffers at that time of year. Texans were churning up their air conditioning, and the state’s grid, which infamously failed for days during a cold snap in February, was straining.
“We just got a text saying, ‘The power grid needs support. Please curtail now,’ ” Harris said, while standing outside the company’s mining center at an old Alcoa aluminum facility about six miles outside this Central Texas town. Instantly, Whinstone’s system went offline. The tens of thousands of computer servers that spin away generating bitcoin inside three long buildings simply stopped. “With the flip of a switch, we turned this off,” Harris said.
In the world of crypto mining, having all your computers shut down at once, and stay down for hours, as they did in June, sounds like a disaster. Crypto miners compete with one another the world over to generate the computer code that results in the production of a single bitcoin, and the algorithm that governs bitcoin’s production allows only 6.25 bitcoin to be produced every 10 minutes, among the perhaps 70,000 crypto mines that operate around the world. If you’re not able to generate the code, but your rivals can, you are out of luck.
But thanks to the way Texas power companies deal with large electricity customers like Whinstone, Harris’s bitcoin mine, one of the few owned by a publicly traded company, didn’t suffer. Instead, the state’s electricity operator, the Electric Reliability Council of Texas (ERCOT), began to pay Whinstone — for having agreed to quit buying power amid heightened demand.
That sort of arrangement has helped make the state one of the go-to locations for expanding crypto entrepreneurs the world over, despite its continued agonizing over power shortages. Indeed, Whinstone’s new owners are undertaking a major expansion of its facility outside Rockdale, with the intention of doubling its capacity. When fully developed, the crypto mine here is expected to require 750 megawatts of power — enough to power more than 150,000 Texas homes during peak demand.
And it’s not just Whinstone. More crypto farms want to move into the area as China, believed to be the nation with the most crypto miners, moves to restrict local bitcoin mining and trading by, among other limitations, ordering power companies not to sell them power. Shenzhen-based BIT Mining said in May that it plans to invest more than $25 million in a Texas data center, while Beijing-based server firm Bitmain is already modernizing the old aluminum plant across the street from Whinstone’s Rockdale-area facility.
Rockdale’s mayor, a bitcoin miner himself with a rack of computers in his home, says he’s met with at least one other firm interested in locating here. Whinstone, which leases shelving on its campus to other crypto miners’ servers, has been contacted by “several,” the company’s CEO said.
It’s not just happening near Rockdale. Peter Thiel-backed crypto mining firm Layer1 Technologies last year opened a plant near Pyote in West Texas (population 138 in the 2020 census). In February, Canada’s Argo Blockchain announced plans to buy 320 acres of land in the same West Texas area within a year.
Events in China might make mining even more profitable for farms in Texas. Over the July Fourth weekend, as bitcoin’s code self-adjusted to accommodate a sudden drop in global bitcoin miners tied to the crackdown in China, it became 28 percent less difficult to produce new bitcoin, according to the bitcoin data service BTC.com.
“One good thing about crypto mining is it’s adding flexibility to the system,” said Peter Cramton, a former board member of ERCOT, the nonprofit that’s charged with managing the state’s wholesale energy market. “But the problem is it’s consuming real resources, doing a function that has no value.”
In mid-June, the state asked Texans to cut back on power by setting their thermostats to 78 degrees or higher as statewide electricity demand crept toward 70 gigawatts, nearly all that companies could generate at the time.
How much the crypto explosion has helped Rockdale’s economy is open to debate. For 50 years, Rockdale, with a population of about 5,600, was a company town, with hundreds of jobs at Alcoa’s nearby coal mine and aluminum smelter. Its economic success even earned it the nickname “The Town Where It Rains Money” in a 1952 article by the Saturday Evening Post. But in 2008, Alcoa closed the mine and smelter, eliminating 1,200 jobs, and in 2018 the firm’s power plant was shut down, adding to those job losses.
But the electrical lines supporting those operations remain, making it an attractive site for bitcoin investment. Whinstone hired roughly 100 workers when it moved into town. But so far, the investment hasn’t spurred meaningful growth.
“What’s 100 [newly hired] employees when you lost maybe 2,000 employees? It’s not significant,” said John King, Rockdale’s mayor, who worked at the old Alcoa plant in the 1980s. His efforts to operate a crypto mine with a few servers in his home haven’t really paid off either. “I’m not very successful at it, and I can’t afford to keep buying hard drives,” he said, a reference to the hotly competitive market where the winnings go to those with the most computing power.
And Whinstone has a lot. The company’s fenced-off crypto compound houses more than 100,000 computer servers, stacked 20 feet high lining some of the walls. When the expansion is completed by the end of 2022, that number will have more than doubled, according to the company’s CEO.
On the outside, machines can be heard buzzing as workers in hard hats prep the 100-acre lot in near 100-degree temperatures for mining expansion. It’s even louder and hotter on the inside, where fans on mining servers expel heat into a central “hot aisle.” When the power is on, the chamber can hit 150 degrees as scorching air is shot out the ceiling. When the system powers down, the chamber’s temperature falls soon after.
Bitcoin mines of Whinstone’s size may be capable of creating roughly 500 bitcoin per month, the company says. At today’s bitcoin value of approximately $34,000, that’s $17 million, helping to explain why Riot Blockchain, a publicly traded company, paid $80 million in May to acquire Whinstone.
Expansion is an expensive undertaking, too. Each of Whinstone’s buildings costs about $40 million to build. Still, Whinstone feels bullish on its future in Texas. The state provides myriad prime conditions for mining.
For one, it has a deregulated electricity landscape that allows energy customers to choose their provider. The state often offers some of the cheapest energy prices in the country. And the arid locale known for its oil and gas business is the nation’s leading energy producer. As such, crypto data centers requiring a seemingly endless amount of power know where to get it.
When power prices start to rise because of increasing demand, software from start-ups like Texas-based Lancium give mines the flexibility to adjust their power consumption accordingly. The code is interfaced with online notices from ERCOT, triggering servers to power down during times of extreme energy shortages.
During the days-long blackout that crippled Texas in February, bitcoin mines completely went offline. ERCOT paid the companies for doing so.
“There’s a lot of opportunities here compared to other states,” said Katie Coleman, an Austin-based energy attorney. “Cryptocurrency miners can avoid high energy periods, get paid for doing that, and therefore get power for next to nothing here.”
Why Rockdale? Whinstone moved to the town’s perimeter from Louisiana in 2019 to take advantage of relaxed regulations and Alcoa’s shuttered facilities. The company signed a long-term lease with Alcoa, flattened trees on the unkempt land and completed three buildings in 18 months.
Wanting to be well-liked among locals, Whinstone donated “a significant amount of money” to the Rockdale Police Department. “Then they probably spent $5,000 on fireworks for our graduating senior class,” King, the mayor, said.
The showering display was a notable investment, he added, in a four-square-mile town that hosts a Walmart, one other grocery store, a handful of Mexican restaurants and a couple of pizza places. It’s also home to one of the oldest motels in Texas, Rainbow Courts, which is somewhat of a tourist destination built over a century ago.
The move to the community’s perimeter came as the start-up was running low on capital. The firm says it needed the recent Riot Blockchain buyout to expand. Riot needed Whinstone’s infrastructure to run its mining hardware.
“Our issue here was getting enough capital to build faster,” said David Schatz, vice president of operations at Whinstone. “We virtually had an endless supply of power, whereas other companies, our competition —their issue is scaling up their power.”
Bitcoin mining company Whinstone finds a welcome in Rockdale, Texas - The Washington Post |
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