The Banking Sector May Be Reeling Of Late. That Has Made Another Sector Very Bullish

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Thursday, March 23, 2023

It has been a tough week for banks. The failure of Silicon Valley Bank and Signature Bank has hearkened memories of 2008. Silicon Valley Bank was four decades old and the 16th biggest bank in America, although many people probably never heard of it. Its mass was underscored by the fact that it was a startup tech favorite that experienced a boom during the pandemic when millions of people and businesses turned to technology as an answer to distancing mandates.

So, what happened? Let’s make the situation simple.

Technology companies were raking in hundreds of millions in investments and storing their cash with Silicon Valley Bank, who used that money to make some ill-fated investments, primarily in long-dated government bonds. SVB did not foresee the Federal Reserve turning hawkish on interest rates to fight inflation, which made the bank’s investment in mortgage-backed securities drop dramatically. 

To make matters worse, investors, who had backstopped a decade-long run for technology stocks, pulled back on the reigns. Now tech firms needed their cash and SVB was underwater on their investments. Cue the collapse.

Who wins when banks lose?

As investors took a forensic look at cracks in conventional banks, the biggest benefactor of the demise of SVB (we won’t even go into Credit Suisse’s “material weaknesses”) arguably has been Bitcoin. The world’s most popular cryptocurrency had gone through a bit of a rally already in 2023 but found itself in a slight slump during March. That was until the SVB news. Trading at a two-month low of $19,597 on March 10, Bitcoin did an about-face and gained in six of the next seven days, including hitting its highest level since June 2022 and crossing $27,000 on March 17.

That is music to the ears of Bitcoin miners. Especially those like BitMine Immersion Technologies, Inc. (OTCPK: BMNR) that could operate profitably even at deeply depressed Bitcoin prices. BitMine is an emerging player in the space that has weathered the so-called crypto winter through responsible use of capital as it organized its launch of operations using leading edge technology.

BitMine’s flagship operations are located in Pecos, Texas and Trinidad. In what might be looked at one day as a fortuitous stroke of fate, BitMine hit some speed bumps with electricity providers for firing up its mining rigs at both locations as Bitcoin bottomed.

In Trinidad, the local utility had agreed months ago to supply electricity for 3.5 cents per kilowatt hour (kwh), a price that they tried to come back and renegotiate higher. BitMine said on March 6 that negotiations have been concluded with the utility agreeing to honor the 3.5 cents per kwh pricing along with a potential value-added tax (VAT) that could bump up the all-in price slightly. 

BitMine has its mining operations installed on site and is ready to energize their containers loaded with Bitcoin miners using 100% immersion technology. Immersion technology has moved to the forefront on cryptocurrency mining and datacenters where the practice of submerging computers in specialized fluids means heat can be rapidly moved away from chips and processors without the need for mechanical fans and heat sinks.  Keeping computers cooler has multiple benefits, including greater density in configurations, fewer mechanical failures and, particularly important for Bitcoin mining, the ability to push the computers harder, known as “overclocking” in the industry.

According to BitMine, they’re able to overclock their computers by about 25 percent. In simple terms, that means that using the same amount of energy as a configuration using conventional mining techniques, BitMine can generate about 25 percent more Bitcoin.

BitMine says it is now just waiting for a hard start date from its local Trinidad partner. News of the launch of mining, signaling entrance of the revenue stage for BitMine, should serve as a catalyst for the company.

In Texas, the situation is similar. Containers full of immersion Bitcoin miners are installed and ready to be energized. The retail power provider was responsible for a delay and BitMine had to go a different route. A new power agreement at a favorable rate is reportedly “imminent,” which will trigger a start date for Bitcoin mining to begin in Pecos, a second major catalyst for BMNR on the horizon as Bitcoin prices experience a renewed bullishness that simply will help BitMine’s top and bottom lines.

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BitMine Immersion Technologies, Inc. (OTCPK: BMNR) Full Corporate Write-Up: Click Here.

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