Welcome to the first publishing of our “Blockchain Stocks Weekly Update“. Every week we will publish our weekly overview of what we are seeing from Blockchain stocks in the market. Be sure to check in every week for the latest updates and analysis!
While the mood of the market was negatively impacted by the Bithumb hack, there were plenty of notable developments that kept blockchain stocks upbeat during the week. Horizons Blockchain Technology & Hardware Index ETF (BKCH) announced that it will start trading on the Toronto Stock Exchange to provide exposure to the infrastructure behind the disruptive technology. Meanwhile, Crypto indices and key pairs debuted in the mainstream trading arena as Bloomberg Terminal announced to list nine popular crypto pairs along with crypto exchange Huobi’s Cryptocurrency Index.
Based on our research, we found that the following blockchain stocks demonstrated notable price movements based on shifts in their company fundamentals.
Hut 8 Mining Corp.
Toronto based Bitcoin miner Hut 8 Mining Corp. (HUT) said it is adding 16 BlockBox Data Centers in Medicine Hat, Alberta, that will effectively double its bitcoin mining capacity from 18.7 MW to 37.9 MW.
The President and Chief Executive Officer of Hut 8 Mining Corp., Andrew Kiguel, said that they are planning to increase aggregate capacity to 66.7 MW in the near future. Hut 8 Mining Corp. already has a definitive agreement with the City of Medicine Hat to obtain up to 42 MW power supply to operate its current mining facilities. However, the press release did not mention how the company will get the additional 24.7 MW power once they hike the operating capacity to 66.7 MW. Hence, investors should wait for further information regarding the additional power sources before taking any decision to increase their exposure.
Hut 8 Mining Corp.’s stock remained mostly bearish since the end of April, mimicking the bearish price action of the BTCUSD price. However, once the news broke about doubling its mining capacity, Hut 8 Mining Corp.’s stock price broke above the resistance near the $3.25 level. If the management can provide solid evidence of finding ample power to keep expanding the capacity, we might see the stock price testing the downtrend line in the next few weeks.
HashChain Technology Inc.
HashChain Technology Inc. (KASH) said it has successfully mined 24.03 Bitcoin and 9.99 Dash over the last ten-day period. Based on the current market price, it has accumulated total CAD $212,137 from Bitcoin and CAD $3,467 from Dash mining operation.
HashChain Technology Inc. had a total 3,495 Rigs and its CEO, Patrick Gray, announced that his plan is to boost the rig count by 5,000 more in the coming months. Last week, HashChain said it has entered into a purchase agreement to get 5,000 new Antminer S9 Rigs by acquiring two cryptocurrency mining companies.
HashChain Technology Inc.’s stock price remained mostly bearish over the last two months, but it momentarily found a support near the $0.2050 level. However, in the first week of June, the support broke and since then, it has been closely following the downtrend line over the last two weeks.
The stock price showed no immediate reaction to the news about the purchase agreement to acquire 5,000 new rigs and unless we see any swift reversal in bitcoin price, investors should take caution. However, if HashChain Technology Inc.’s stock starts a bullish retracement next week and it breaks above the pivot zone near $0.2050, it could signal a reversal from a purely technical point of view.
Seven Stars Cloud Group Inc.
Seven Stars Cloud Group Inc. (SSC) has been actively trying to break into the fintech market by establishing an ABST (Asset Backed Securitization & Tokenization) Platform. They also have a derivative trading platform in their portfolio that mostly caters to trading Indexes, ETFs, and other derivatives.
Seven Stars Cloud Group Inc.’s stocks jumped 8.6% on Wednesday to $2.13 after it announced two new hires to oversee its Digital Advisory Services subsidiary Red Rock Global Capital Ltd. It picked a 25-year Federal Bureau of Investigation (FBI) veteran Richard Frankel to be the Chairman & CEO of Red Rock. On the other hand, former Managing Director of Griffin Investment Management LLC, Manuel Ron, will become Red Rock’s Chief Operating Officer.
Despite the recent bullish move, Seven Stars Cloud Group Inc.’s stock got rejected near the latest downtrend line. Even if it breaks above the downtrend line, it will then have to cross above the pivot zone near the $2.15 level, before it could gain enough momentum to push towards the next resistance around $2.55.
Major blockchain stocks continued to trade within narrow ranges this week after the South Korea based sixth largest crypto exchange Bithumb was hacked and around $30 million worth of coins was stolen. The news of another hack kept major cryptocurrencies on a bearish note along with the stock prices of major miners and by Friday, the aggregate global market capitalization dropped close to $250 billion.
To sum up, while there was ample concern about exchange security, stocks of individual companies looking to leverage the blockchain technology showed significant growth prospects.