The Canadian who accumulated a fortune creating what would become one of world’s largest gold companies, decided to switch into mining cryptocurrencies.
Giustra Creates An Opportunity For Bitcoin
Vancouver-based Hive Blockchain Technologies Inc. is one of the first publicly traded stocks that provides exposure to cryptocurrency mining. Backed by Frank Giustra, it’s shares rose about 633 percent, shaping a market value of $443 million. It took over the listing of Leeta Gold Corp. and began trading on September 18. After just a few days, the company raised C$30 million in a share sale led by GMP Securities LP.
We’re quite lucky to be first out of the gate. We’re a unique way to get into the space.
Said Hive Chief Executive Officer Harry Pokrandt, a former Macquarie Group investment banker.
Future of the Giustra backed company
Hive has plans to mine cryptocurrencies other than Bitcoin. It would depend on which ones offer the best margins and what kind of inventory can be built on the appreciated expectation. The company also announced it plans to purchase a second Genesis data center for $5 million. And perhaps more, in Iceland and Sweden – cold countries which can keep power and cooling costs down.
Investors have mostly watched Bitcoin’s development from the sidelines, as its purchase is difficult, and the coin itself is volatile. It also has an unfortunate association with criminal activity, due to its high anonymity. Governments are struggling to regulate the industry, with China closing all cryptocurrency exchanges and at least 13 other countries tightening rules. Hive is listed on the TSX Venture Exchange, no stranger to volatile stocks. Hive jumped 13 percent to C$2.20 at 12:31 p.m. in Toronto.
Giustra Might’ve Broken the Bank
Regardless of all that, Bitcoin is drawing many investors. The market value of all cryptocurrencies combined surged more than eight times this year to about $150 billion. Bitcoin itself set a record abore $5000 on Thursday. Ether has gained more than 3,600 percent this year.
Being first out of the gate has its challenges. The high-risk, high-reward mentality of those who back hard-rock mining exploration eases the leap from physical to digital gold. Pokrandt asks some very important questions:
Do we recognize revenues the moment we mine it? Do we recognize it when we actually sell it and convert it into fiat? What happens in the meantime? There are a lot of issues we haven’t solved yet. I’ve discovered that crypto culture and gold bugs are the same sort of thing: you’ve got mistrust of government, mistrust of fiat, you want a decentralized ecosystem. The difference is that gold bugs tend to all be 60 years old and crypto guys are 20.