It’s starting to look like HIVE Blockchain (HIVE.V) investors will be eating a higher grade of steak over Christmas; the first mover in the nascent crypto-mining sector that opened on the public markets at $0.96 six weeks ago just burst through the $5 psychological barrier like it was nothing, shifting up from $4.48 to $5.37 on no news, good for 19.9% profit on the day.
This is not new. It was up from $4.09 the day before that, and $3.52 the day before that, and $3.14 the day before that, giving investors a 52% return on their money over four days.
With two facilities in Iceland generating Bitcoin and Ethereum, and another coming on in Sweden, the recent spike in Bitcoin value, from $6000 to $7000 over the last week (and up from $4100 a month ago), is bringing increasing and intense interest in the deal. HIVE is one of the world’s largest generators of Ethereum, which has been losing value steadily of late, but has the ability to switch gears to generate any alt-currency that begins a run.
I’ve chatted with a few folks about HIVE’s off-the-chart chart and what might happen when their pre-listing financing paper becomes free trading, as that’s the big knock on the company from cynics, and there’s surprisingly little concern about any kind of substantial fall away.
One big holder I talked to told me, “You’re looking at nearly a half billion dollars in trading volume over the last month, and $700 million in market cap… if $10 million in early money cashes in, I think you’re looking at a pretty small correction, but considering how quickly it’s gaining value right now, I’m not sure how much of that early profit will be taken for anything outside warrant buying.”
Personally, I’m expecting a fair sized correction and, as a holder of the stock, am not planning any exit regardless of that assumption. I know company insiders are meeting in Toronto this weekend to finalize more plans, and am told those execs fully realize HIVE will need to keep growing and doing good deals to justify its current market cap as its new base.
I also know there’s no panic going on as the stock price rises. People behind the deal believe it’s still undervalued, though even they may be starting to worry about such high gains in such a short time. Certainly this rise has led the street to immerse itself in other blockchain and crypto deals, in a manner reminiscent of the 2014 weed rush.
For now, trade carefully, friends. Congrats anyone who got in when we started covering the story, but don’t let it rush to your head. The road is long and, while crypto isn’t going away, corrections can come without too much warning.
— Chris Parry
FULL DISCLOSURE: HIVE is not an Equity.Guru marketing client, though the author has a position in the company.