I have had some requests to go over companies that have Bitcoin on their balance sheet.
The reason that you would want to know this is because companies that have Bitcoin on their balance sheet have followed the price of Bitcoin.
These companies have followed Bitcoin on the way up and on the way down. For example, we have been with MARA since 95 cents. We have seen MARA go all the way up to $86 simply based on the price of bitcoin exploding.
If you believe that the price of Bitcoin will keep going up in the long term, these stocks will go up as well.
If you believe that Bitcoin will go down in the long term, you can short these companies because there stock price will go down with Bitcoin.
(I am obviously a bitcoin bull)
I am going to be breaking down these companies in a simple way. These companies will either be Bitcoin Miners OR Corporations that Own Bitcoin on their balance sheet.
Keep in mind: MarketCap means what the value of the company is worth. If you were to buy the entire company that is how much it would cost.
Warren Buffett preaches that hen you invest in a company, you should always think about the company in terms of owning 100% of it. This is true even if you are just buying 1 share of it.
1. MicroStrategy: 125,051
MicroStrategy is a software company that is founded and ran by Bitcoin Maximalist Michael Saylor. MicroStrategy has added Bitcoin to their balance sheet because they believe that Bitcoin will appreciate over time.
Amount of Bitcoin: 125,051
Dollar Amount: $5.5 Billion
Average Cost: $30,159
Monthly Mined: 0
Monthly Mining Power: N/A
Stock Price: $413.47
MarketCap: $4.28 Billion
Analysis: MicroStrategy is a implied arbitrage opportunity. MicroStrategy has $5.5 Billion worth of Bitcoin on their Balance Sheet, but the company is currently worth $4.28 Billion. This is a rare opportunity. In other words, if you bought 100% of the company, you would pay $4.28 Billion. However, you would get $5.5 Billion in Bitcoin immediately. MicroStrategy is very undervalued right now especially if you believe that the price of Bitcoin will soar in the future. This is a bitcoin play not a software play.
2. Tesla: 42,902
Tesla is an EV/Battery/Autonomous company that is ran by Elon Musk. Tesla has added Bitcoin to their balance sheet because they believe that bitcoin will appreciate over time.
Amount of Bitcoin: 42,902
Dollar Amount: $1.99 Billion
Average Cost: $31,700
Monthly Mined: 0
Monthly Mining Power: N/A
Stock Price: $908.25
MarketCap: $911.21 Billion
Analysis: Tesla is not a bitcoin play. For Tesla to succeed, their EV/Battery/Autonomous business has to win it for them. Any Bitcoin profits will be used as an investment back into the business.
3. Galaxy: 16,400
Galaxy Digital is a technology-driven financial services and investment management firm that provides institutions and direct clients with a full suite of financial solutions spanning the digital assets ecosystem. Galaxy Digital operates five synergistic business lines: Trading, Asset Management, Principal Investments, Investment Banking, and Mining. Galaxy Digital's CEO and Founder is Mike Novogratz.
Amount of Bitcoin: 16,400
Dollar Amount: $721.6 Million
Average Cost: N/A Trading Firm
Monthly Mined: N/A
Monthly Mining Power: N/A
Stock Price: $14.44
MarketCap: $6.08 Billion
Analysis: Investing in Galaxy is investing in the entire crypto market. Galaxy is led by famed Hedge Fund Manager Mike Novogratzy. In Q3 2021, Galaxy did $517 million in income which was an increase of 1,146% from the $41.5 million the firm made in Q3 2020. Trading crypto accounted for $360.7 million of the $517 million in third-quarter revenues. Galaxy has deployed $62 million of capital into 22 different NFT-related companies through direct investments and through Galaxy Interactive Fund strategies. Galaxy Digital reported crypto assets under management (AUM) of $3.2 billion, as of Oct. 31, 2021.
4. MARA: 8,133
Marathon Digital group is a bitcoin mining company that is focused on building the leading USA digital miner. Mara makes their money by mining bitcoin each month, selling for a profit. For example, if the total cost to mine 1 Bitcoin is $30,000 and the current cost of 1 Bitcoin is $50,000. They have made a $20,000 profit.
Amount of Bitcoin: 8,133
Dollar Amount: $357 Million
Average Cost: $31,274
Monthly Mined: 462.1 Bitcoin Per Month (This will increase with new purchase of miners)
Monthly Mining Power: 32,710 active miners producing approximately 3.6 EH/s
Stock Price: $25.50
MarketCap: $2.62 Billion
Analysis: MARA expects to have about 133,000 operational miners by mid-2022 which will be a huge increase in the amount of Bitcoin that they can mine each month. MARA reported $189.1 million in cash on hand. Total liquidity, defined as cash and Bitcoin holdings, was around $519.7 million. The key for any of these miners to be successful is 1. Lowering the cost of each bitcoin mined 2. The Price of Bitcoin to Increase
5. HUT: 5,826
Hut 8 Mining is a crypto mining and blockchain infrastructure company, which is focused solely on bitcoin mining. Hut 8 introduces itself as a balance sheet-first which means they want to hold Bitcoin as long as they can.
Amount of Bitcoin: 5,826
Dollar Amount: $256 Million
Average Cost: $27,700
Monthly Mined: 308
Monthly Mining Power: 2.36 EH/s, a 17% increase from December 31, 2021. (6.0 expected by mid-2022)
Stock Price: $7.18
MarketCap: $1.20 Billion
Analysis: Hut 8 Mining really intrigues me. Hut managed to grow its Bitcoin holdings from 3,824 BTC to 4,729 BTC in Q3, averaging 302 BTC per month. Unlike the other mining companies, they are doing everything that they can to keep their bitcoin on the balance sheet. HUT is expected to be able to mine 7,300 Bitcoins per year by mid of 2022, a 100% increase from Q3's figure. HUT has two other sources of revenue: yield on Bitcoin reserves and hosting. If HUT can keep the prices this cheap, increasing their mining power substantially WHILE holding Bitcoin on their balance sheet then they might be the best bitcoin miner long term.
6. Riot: 5,347
Riot Blockchain is a Bitcoin mining company, supporting the Bitcoin blockchain through rapidly expanding large-scale mining in the United States. Riot is focused on expanding our operations by increasing our Bitcoin mining hash rate and infrastructure capacity. Riot believes the future of Bitcoin mining will benefit from American operations and endeavors to be the driver of that future.
Amount of Bitcoin: 5,347
Dollar Amount: $235 Million
Average Cost: $39,000
Monthly Mined: 458 BTC
Monthly Mining Power: 32,552 miners, with a hash rate capacity of 3.4 E/Hs
Stock Price: $17.56
Market Cap: $2.06 Billion
Analysis: The major problem that Riot has is that they have to get the cost of their bitcoin down significantly. They have done a great job in terms of mining production/power but a horrible job with the cost. The impact of Riot's higher cost is evident: 50% less Bitcoin accumulated per month compared to their rivals. If Riot can get their cost way down, they will continue to be a force.
I hope that this has given you a better idea on companies with Bitcoin on their balance sheet. I would take a hard look at MicroStrategy and Hut 8 Mining, if you are a bitcoin bull while keeping a close eye on Mara and Riot.
I will talk to you tomorrow!
Stay Hungry, Stay Long