A New Crypto Reality? More Businesses Adopt Crypto Payments as the Sector Builds Momentum (TSXV: $INLA.V) (TSXV: $HUT.V) (NASDAQ: $MARA) (OTC: $GBTC)
Point Roberts, WA and Delta, BC - June 3, 2019 (Investorideas.com Newswire) Investorideas.com, a global investor news source covering blockchain and cryptocurrency issues a special edition of the Crypto Corner looking at developments in the cryptocurrency sector, featuring Interlapse Technologies Corp. (TSX-V: INLA) and its recent entry in the space as a public company.
In recent news from The WallStreet Journal, Facebook is reportedly recruiting financial firms to help start a cryptocurrency-based payments system.
The effort represents the most mainstream application yet of cryptocurrency and Facebook has discussed the matter with payments firms including Visa, MasterCard and First Data Corp.
A spokeswoman for Facebook's blockchain efforts declined to comment to the Journal, saying simply that it "is exploring many different applications."
In just the past 12 months, investments in cryptocurrency-related assets have nearly tripled to $14.4 billion, across more than 700 companies and funds, according to industry tracker Crypto Fund Research. Regulators in New York State describe the market as "thriving" and have granted virtual-currency trading approvals known as "BitLicenses" to at least 18 companies.
Bitcoinist also recently reported on how as the stock market has suffered under US-China relations as of late, Bitcoin "has been outperforming the red-hot stock market by a whopping 10 times so far in 2019. BTC price $8268.81 -2.40% also managed to mark a sharp recovery back to $8,680."
As Bitcoinist reported, "Bitcoin is breaking through and then finding support at levels which were previously a resistance throughout the bear market. This could suggest the bulls are in control as they are constantly breaking through prior resistance. The next target to break is an important psychological level of $10,000."
Interlapse Technologies Corp. (TSX-V: INLA), who through their wholly owned subsidiary Coincurve.com allows Canadian customers to buy Bitcoin and BitcoinCash in the simplest form, announced that the Company's shares commenced trading on May 30th on Canada's TSX Venture Exchange under the trading symbol: INLA.
This listing follows Interlapse's acquisition of Vancouver-based Skyrun Technology Corp., which is now a wholly owned subsidiary of the Company.
"The transaction with Skyrun and a concurrent listing on a globally recognized stock exchange brings credibility and authenticity to our business, as well as the entire virtual currency industry," commented Wayne Chen, co-founder of Skyrun and the newly appointed CEO of Interlapse.
As a result of the Skyrun acquisition, the Company now owns the intellectual property relating to the virtual currency platform coincurve.com, where Canadians and eventually international customers can purchase Bitcoin and Bitcoin Cash.
As a public company, customers can rely on coincurve.com for transparency. Furthermore, coincurve.com is a non-custodial service, greatly minimizing financial risk or loss of customers' virtual currencies. The company also expects soon to expand globally into emerging and under-banked countries, hoping to educate, adopt and deliver Bitcoin and Bitcoin Cash to users across the world.
"I am privileged to be a part of this opportunity, and enthusiastic about our expansion into global markets," Mr. Chen further commented. "With the growing acceptance of virtual currency, we are positioned to flourish within this new, globally connected business frontier."
Hut 8 Mining Corp. (TSXV: HUT) (OTCQX: HUTMF), one of the world's largest public cryptocurrency mining companies by operating capacity and market capitalization, recently announced its financial results for the first quarter ended March 31, 2019.
Some of the Q1-2019 highlights included revenue of $12.1 million for Q1-2019, adjusted EBITDA of negative $1.3 million for Q1-2019, 2,405 bitcoin mined in Q1-2019 and a fair value gain on re-measurement of digital assets of $789,678.
"While bitcoin mining economics significantly improved in April 2019 with an increase in the price of bitcoin, our first quarter was negatively impacted by bitcoin prices consistently trading below US$4,000 and the network difficulty increasing by 14%. In addition, record cold weather in Alberta resulted in higher electricity pricing," said Andrew Kiguel, Chief Executive Officer of Hut 8. "In March and continuing into the second quarter, we have experienced lower electricity prices and a much improved bitcoin price. This has significantly improved our margins in the second quarter thus far."
"Alberta had a record cold winter, which led to higher electricity prices at our operations that are not under a power contract. Despite having higher than normal electricity prices in January and February, Hut 8's cost per bitcoin decreased slightly from US$3,995 in Q4-2018 to US$3,950 in Q1-2019. The impact of management's cost reduction initiatives and electricity optimization in Q1-2019 were successful in offsetting the higher energy prices. In addition, Hut 8's management was successful in reducing corporate overhead excluding non-cash share-based compensation from $994k in Q4-2018 to $747k in Q1-2019."
For Q1-2019, fair value gain on re-measurement of digital assets of $789,678 represented the gain on adjusting the value of the digital assets held in inventory to the market value on the reporting date. This was the first gain on re-measurement of digital assets in Hut 8's history and marks a turn in the bitcoin prices. In future quarters, the Company would expect to see gains or losses based on the price of bitcoin on the reporting date, relative to the price on the day mined, when revenue is recorded.
Hut 8 recognized negative $1.3 million in Adjusted EBITDA, the first quarter of negative Adjusted EBITDA operations for the Company. A net loss was recorded for the quarter was $6,065,495. Both losses were largely as a result of bitcoin prices remaining at approximately a 52-week low during Q1-2019, hash rates increasing, and volatile natural gas prices which all negatively impacted operations for the quarter.
"Hut 8 remains committed to solely mining bitcoin and to retain as much as possible. Despite harsh operating conditions, Hut 8 retained 2,615 bitcoin at the end of Q1-2019. Management underwent significant cost saving measures at the end of 2018 to ensure we maintain a lean cost structure and are in a position to capitalize on the recent upswing. Our operations are stronger than ever, and we are poised for improved financial performance going forward given the recent appreciation in the price of bitcoin that began in April 2019," said Kiguel.
Marathon Patent Group, Inc. (NASDAQ:MARA) also recently announced its operating results for the three months ended March 31, 2019, as published in its Form 10-Q filed with the Securities and Exchange Commission.
Some of the operating results for the Quarter Ended March 31, 2019 included revenues of $230,694 during the three months ended March 31, 2019 compared to $239,967 during the three months ended March 31, 2018; operating loss improved to $984,909 (inclusive of non-cash expenses) for the quarter ended March 31, 2019 compared to an operating loss of $1.8 million (inclusive of non-cash expenses) quarter ended March 31, 2018 and the company had approximately $2 million of cash and cash equivalents as of March 31, 2019.
Merrick Okamoto, Chief Executive Officer, stated, "We're pleased to show significant financial improvement on a year over year basis including significant reductions in our operating costs, While recent improvements in the price of Bitcoin are clearly beneficial to our ongoing mining operations and should benefit our financial performance in our Q2, we continue to seek potential acquisition opportunities that we deem to offer the best opportunity for appreciation for our shareholders."
Grayscale Investments, LLC (OTC: GBTC), a global leader in digital currency asset management, recently announced that common units of fractional undivided beneficial interest in Grayscale Ethereum Trust™ ("ETHE") were approved by FINRA for a public quotation on the OTC Markets.
Launched in 2017 and sponsored by Grayscale, ETHE is an open-ended trust that holds Ethereum and derives its value solely from the value of Ethereum. Investors in ETHE can gain exposure to the price movement of Ethereum without the challenges of buying, storing, and safekeeping Ethereum. As of April 30, 2019, each Share of ETHE represents ownership of 0.09662399 Ethereum. ETHE will not generate any income and regularly distributes Ethereum to pay for its ongoing expenses. Therefore, the amount of Ethereum represented by each Share gradually decreases over time.
There will be no trading volume in the Shares' public quotation until the Shares are DTC eligible, which ETHE is expected to receive soon. Investors will be able to find current financial disclosure and Real-Time Level 2 quotes for Shares of ETHE on the OTC Markets website once trading commences.
Grayscale's investment products are available to institutional and accredited individual investors. Grayscale sponsors nine single-asset investment products that provide exposure to Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Horizen (ZEN), Litecoin (LTC), Stellar Lumens (XLM), XRP, and Zcash (ZEC). In 2018, Grayscale introduced its first diversified investment product, Grayscale Digital Large Cap Fund™, which provides exposure to the top digital currencies by market capitalization. As of May 15, 2019, Grayscale managed approximately $1.9 billion in assets.
ETHE is Grayscale's third publicly quoted investment product. In addition to ETHE, Grayscale Bitcoin Trust™ and Grayscale Ethereum Classic Trust™ are also publicly quoted and available to all individual and institutional investors.
Mass adoption of crypto payments and Bitcoin has been viewed with skepticism since its entry into the financial community, however with the recent improvements in technology, more companies coming out with crypto payment solutions and instability in the stock market, 2019 looks to be the closest we've come to seeing crypto going mainstream.
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