In-depth | Panoramic analysis of global Bitcoin mining stocks

summary

Since the end of 2020, the expectation of Bitcoin as "digital gold" and "anti-inflation" has been further strengthened, and the price has repeatedly hit new highs. During the Chinese Spring Festival in 2021, it broke through the 50,000 US dollar mark in one fell swoop. The Bitcoin mining industry has risen, and the latest daily income is 380 million yuan. (2021.2.21). According to statistics, 40 companies around the world, including overseas mining stocks and Tesla, have owned more than 1.31 million Bitcoins through mining or direct purchase, exceeding 6% of the total 21 million Bitcoins, with a value of more than 73 billion US dollars (Bitcoin Treasuries, 2021.2.20). We have noticed that many companies listed overseas have disclosed the purchase data of Bitcoin mining machines, which is quite detailed. We have sorted it out to get a glimpse of the market share of mining machine manufacturers and analyze the investment opportunities of mining/mining machines/mining farms/mining pools/buying coins.

Background: As the price of coins rises, the production capacity of mining machine chips is limited, which is good for institutions that have already had a lot of computing power in the early stage. The impact of the rise in coin prices on mining income is not a linear "coin price rises-income increases". It should be noted that 1) on the income side, the number of bitcoins that miners can mine is positively correlated with "own computing power/total network computing power". When the price of coins rises, the computing power of the entire network will increase in theory, but since last year, the production capacity of mining machine chips has been affected by the tight demand for semiconductors, and the computing power of the entire network has increased slowly. Therefore, the "own computing power/total network computing power" of miners has not decreased, that is, the number of bitcoins that miners can mine has not decreased, which is good for miners; 3) on the cost side, since mining machine manufacturers set prices based on the payback period, when the price of coins rises, the payback period is shortened, the price of mining machines is increased, the mining cost increases, and the increase in net mining income is under pressure, which is bad for miners. Therefore, we believe that in the short term, the mining situation is good for institutions that have already had a lot of computing power reserves in the early stage, and mining machine manufacturers will also become strong competitors in the industry if they increase their mining.

Overseas mining stocks have "grabbed" nearly 21EH/s of computing power, accounting for 16% of the total computing power of the Bitcoin network. We found that as of February 19, 2021, 17 listed companies disclosed that they had purchased Bitcoin mining machines, of which 16 disclosed the number of Bitcoin mining machines (a total of 335,000 units), and 10 disclosed the computing power of these mining machines (close to 21EH/s), which exceeded 16% of the total computing power of the Bitcoin network (136.18 EH/s) during the same period. The average computing power of the mining machines of the 10 institutions that disclosed computing power is 71 TH/s, the average power consumption of a single unit is 2840W, the average "company market value/computing power" is 8, and the average "computing power/power consumption" is 17.

The average value of "market value/computing power" is 8 (i.e., 1EH/s computing power corresponds to a market value of 800 million US dollars). In order to more conveniently compare the capital market's evaluation of the computing power reserves of various companies, we defined the ratio of "market value/(company-owned) computing power". We found that the average value of "market value/computing power" of the 10 overseas mining stocks that disclosed their computing power was 8. If Jiucheng reaches 10% of the total computing power of the Bitcoin network, its "market value/computing power" ratio will be further reduced. It should be emphasized that 1) the lower the "market value/computing power" ratio, the more underestimated the company's mining business is, because the company may not be mainly engaged in Bitcoin mining. 2) Unlike EPS, "market value/computing power" is only related to the company's computing power (i.e., mining income), and cannot reflect the company's mining costs. For example, when Bitcoin is in a bull market, the cost of purchasing mining machines is high, and the net mining income is not necessarily high.

Accelerating entry, grabbing computing power, MARA, RIOT, BTBT have first-mover advantage, and the 9th City has a fast growth rate. According to our statistics, 10 overseas mining stocks that disclosed their computing power held a total of nearly 21EH/s Bitcoin computing power, accounting for 16% of the entire network. Among these 21EH/s, MARA, RIOT, and BTBT held 82% of the computing power, which were 10.3 EH/s (52%), 3.8 EH/s (19%), and 2.2EH/s (11%), respectively, with obvious first-mover advantage. After announcing its transformation, the 9th City also increased its purchase of mining machines, with a rapid growth rate.

Investment advice. Recommended stocks: 1) Mining stocks: MARA, The 9, RIOT, BTBT. 2) Mining machine stocks: Canaan Technology, Ebang International, Nvidia, etc. 3) Mining farm stocks: DMGI; 4) Mining pool stocks (500.com); 5) Coin buying stocks: Microstrategy, Tesla, GBTC, etc.; 6) Exchanges: Huobi Technology, OKEx; 7) Others: Zhongjia Broadcom, Xiong'an Technology, etc.

Risk warning: currency price fluctuations, tightening supervision, and statistical deviations.

What kind of business is Bitcoin mining?

Purpose

"At least 60% of the computing power of the entire network is in China" is a consensus in the Bitcoin mining industry. Even so, the remaining 40% of computing power owned by overseas should not be underestimated, especially since 2020, many overseas listed companies including Marathon Patent Group and Riot Blockchain have announced the purchase of Bitcoin mining machines and Bitcoin, and the data is quite detailed.

We organized and compiled this data, sorted out the sales situation and sales policies of mining machine manufacturers, summarized the behavioral characteristics of relevant institutions, and calculated and compared the "market value/Bitcoin computing power owned" value of each institution.

What is Bitcoin and Bitcoin Mining?

Bitcoin is a medium of exchange and a store of value. It uses cryptography to control the creation of currency units and verify the transfer of funds. Many consumers use Bitcoin because it provides a cheaper and faster peer-to-peer payment option without providing personal information.

Blockchain is the underlying technology of Bitcoin. It is a decentralized digital ledger that can record and implement secure peer-to-peer transactions without a third-party intermediary, and realize the confirmation of digital asset ownership. When a user requests the blockchain network to process a transaction, the peer-to-peer network composed of mining machines (dedicated computers) uses a known algorithm to verify the transaction and compete for the right to record the transaction.

After the transaction is verified, a new data block is generated on the blockchain. The new block is added to the existing blockchain in a permanent and difficult to tamper with way, and the transaction is complete. Every transaction and the ownership of every digital asset in circulation is recorded in the blockchain.

Miners that successfully verify transactions receive Bitcoin rewards and transaction fees (Bitcoin is publicly issued in this way). Miners update the BTC ledger for each transaction.

How big is the Bitcoin mining industry?

The following facts are known,

Fact 1: Bitcoin was launched in 2009. The miner who "mined" a new block could get 50 bitcoins as a reward. After that, the reward was halved every 4 years. The current Bitcoin block reward is 6.25 bitcoins (Note: Bitcoin rewards are 50-25-12.5-6.25 in sequence).

Fact 2: Regardless of the total computing power of the Bitcoin network, a new block will appear in the Bitcoin network approximately every 10 minutes. If the total computing power of the network is high, the Bitcoin network will reduce the difficulty of mining, and vice versa, that is, the block speed remains constant.

Fact 3: There are 24 hours in a day, or 144 10-minute periods (24*6).

Fact 4: The current price of Bitcoin is approximately $56,833 (Bitinfocharts, 2021.2.21).

It can be learned that 900 bitcoins are produced per day (6.25*144), the block reward scale of the Bitcoin mining industry is US$51.15 million per day (56833*6.25*144), and the transaction fee is US$7.65 million (134.56 bitcoins, accounting for 15% of the average daily output of 900 bitcoins, as of 24 hours at 14:00 on February 21, 2021 when this report was written), totaling US$58.8 million (about RMB 380 million) .

If the price of coins rises, will mining definitely be profitable?

The factors that affect the book profits of Bitcoin miners are mainly the number of Bitcoins that miners can mine and the price of Bitcoin. The former is mainly affected by the proportion of computing power held by miners to the computing power of the entire network. The larger this proportion, the greater the probability of miners winning the competition for accounting rights in the entire network, and the more Bitcoins they can mine.

The factors that affect the cost of Bitcoin miners are mainly the purchase price of the mining machine, the power consumption of the mining machine and the electricity cost. Among them, the purchase price of the mining machine is a fixed cost, the power consumption of the mining machine is the attribute of the mining machine itself, and the electricity cost is a variable cost and is related to the power consumption.

When the price of Bitcoin rises, the demand for mining machines increases, and the price of mining machines increases. At this time, the cost of purchasing mining machines increases. In addition, as the price of Bitcoin rises, more mining machines join the mining. Since the speed of Bitcoin block generation is constant (1 block every 10 minutes, and each block rewards 6.25 BTC), the difficulty of mining increases. Therefore, the rise in Bitcoin prices will not bring about a linear increase in mining profits, unless there are factors such as reasonable cost of purchasing mining machines (for example, purchasing mining machines when Bitcoin prices are low), low electricity costs (good power resources), and low power consumption of mining machines.

Summary of overseas Bitcoin mining stocks data

Nearly 21EH/s of computing power, accounting for 16% of the total computing power of the Bitcoin network

According to our statistics, as of February 19, 2021, mining stocks represented by Marathon Patent Group, Riot Blockchain and BTBT have "swept" 330,000 mining machines, with an announced computing power of nearly 21EH/s, exceeding 16% of the total computing power of the Bitcoin network (136.18 EH/s).

The average value of "market value/computing power" is 8, and the performance of "computing power/power consumption" also varies

According to our statistics, as of February 18, 2021, the market capitalization of all mining stocks except Riot Blockchain was below US$5 billion. Except for Marathon Patent Group, which had a computing power of more than 10,000 PH/s (equivalent to 10EH/s), the computing power of others was less than 5EH/s.

We calculated the “market capitalization/computing power” metric to compare how the capital market prices mining stocks’ computing power, and also calculated their “total computing power/total power consumption” to characterize the cost.

We found that a low “market value/computing power” value indicates that the company’s mining business is underestimated. Of course, the lower the “market value/computing power” ratio is, the more underestimated the company’s mining business is, because the company may not be mainly engaged in Bitcoin mining. In addition, the “market value/computing power” ratio can only reflect the company’s mining revenue, not the cost side.

The "total computing power/total power consumption" indicator reflects the performance of the mining machines purchased by the company. The larger the value, the higher the computing power at the same power consumption level. This data disclosure is not complete. According to the existing data, it can be seen that Ault Global Holdings' mining machines have better performance.

We have noticed that all companies are "taking on" computing power, and some have given medium- and long-term goals. In the short-term, market expectations will be updated synchronously. For example, NCTY, which has the largest computing power growth elasticity, plans to reach 10% of the total Bitcoin network computing power, at which time its "market value/computing power" will be further reduced.

The battle for computing power has just begun: MARA, RIOT, and BTBT lead the way, and latecomers are "ferocious"

According to our statistics, the eight overseas mining stocks that disclosed their computing power together hold nearly 21EH/s of Bitcoin computing power, accounting for 16% of the entire network. Of this 21EH/s, Marathon Patent Group, Riot Blockchain, and Bit Digital hold 82% of the computing power, at 10.3 EH/s (52%), 3.8 EH/s (19%), and 2.2EH/s (11%), respectively.

There is also a "28" phenomenon in the exchanges to which mining machine companies belong. According to our statistics, listed companies that are keen on buying Bitcoin and its mining machines are mostly listed in the United States and Canada (which does not mean they are local companies). Among them, 3 of the 10 mining stocks that disclosed their computing power are listed on the Toronto Stock Exchange Venture Exchange, 4 on the New York Stock Exchange, and 3 on the New York Stock Exchange. According to the percentage of computing power, Nasdaq has the most computing power, close to 82%. For example, Marathon Patent Group, which occupies half of the mining stocks, is a US company, which is mainly subject to the attitude of local governments towards BTC.

Bitmain and Shenma have a high market share, Canaan has sufficient production capacity in the future, and spot goods are "hard to find"

According to our statistics, Bitmain and Shenma have a high market share. All mining machines of 4 mining stocks (Riot Blockchain, MGT Capital Investment, Ault Global Holdings, Argo Blockchain) are Bitmain's Antminers, and the newly purchased model of 1 mining stock (9th City) is Shenma's mining machine. But it is worth noting that Canaan, as the only mining machine manufacturer that has cooperated with the three mainstream mining machine wafer foundries, has won many large orders in 2021, which is worthy of attention.

Regarding the recent situation, in this round of mining boom, due to the skyrocketing price of Bitcoin, coupled with the ongoing epidemic and chip shortages, mining machines are in short supply. In the market, first-hand mining machines are sold out one after another, and second-hand mining machines are sold at a large premium.

On Bitmain's official website, it can be found that the Antminer S19, S19 Pro and T19 on sale are all sold out, and the delivery time will not be until August 2021, and the price has increased significantly compared to before. On the MicroBT official website, all types of mining machines are sold out.

Some companies purchase directly from manufacturers such as Bitmain, which not only has relatively high prices, but also has a longer delivery time. The $170 million mining machine ordered by Marathon Patent Group from Bitmain will not be delivered until December 2021.

According to our statistics, in 2020, some mining companies purchased second-hand mining machines or purchased mining machines from third-party channels. We believe that the main reasons are price and cash on delivery deployment time. Second-hand mining machines are not only relatively cheap, but also mostly sold in packages, do not require a production cycle, and have a short installation and deployment time. They can catch up with this wave of rising prices earlier and create profits, which is a relatively rational strategy.

Traditional mining, investment, and Internet companies have entered the market one after another, and professional mining stocks appeared in 2018

We believe that the development of mining stocks can be roughly divided into three stages :

1) From Q4 2017 to Q1 2018 , companies engaged in traditional mineral exploration (such as gold) were the first to enter the market. This may be related to the fact that these companies have more abundant factory resources and low electricity prices.

2) In 2018-2019 , during the Bitcoin bear market, few companies entered the mining industry except for a few investment companies. However, during this period, listed companies with Bitcoin mining as their main business began to emerge (Digihost Technology). However, in terms of the number of mining machine orders, 2018 was a big year for mining companies to order mining machines.

3) Since 2020 , companies in the IT industry (such as online games, information security, etc.) have begun to enter the mining market. This phenomenon may be related to the rise in the value of Bitcoin in 2020. Since the second quarter of 2020, Riot Blockchain has purchased more than 30,000 mining machines, and Marathon Patent Group has ordered more than 100,000 mining machines.

In addition, compared with other industries, Bitcoin mining is not a labor-intensive industry. In theory, as long as there are mining machines and electricity, mining operations can be carried out. In our investigation, we found that even companies specializing in Bitcoin mining have very few formal employees. For example, Marathon Patent Group only has 3 full-time employees as of January 11, 2021.

Therefore, under the condition that costs (the price of purchasing mining machines, power consumption of mining machines and electricity costs) are controllable, if the price of Bitcoin remains high, due to the particularity of the Bitcoin mining business, as long as the benefits outweigh the costs, it can be foreseen that more and more companies in other industries will engage in Bitcoin mining business in the future.

Some mining stocks also purchased mining machines for other currencies

In our statistics, most overseas companies purchased Bitcoin mining machines, and some companies also purchased a small number of other currency mining machines, such as Ethereum graphics card mining machines. With the rise of DeFi (decentralized finance), Ethereum ecological transactions have surged, bringing a significant increase in miners' income. The payback period of graphics card mining machines was once better than that of BTC mining machines.

In addition, there has also been a small increase in anonymous coin mining machines.

Summary of global Bitcoin-related stocks data

Since 2020, due to factors such as loose liquidity of global central banks, many overseas companies have begun to buy Bitcoin as a reserve to replace cash to fight inflation. According to relevant data from the portal bitcointreasuries.org, as of February 20, 2021, 40 companies around the world, including overseas mining stocks, have owned more than 1.31 million Bitcoins, more than 6% of the total 21 million Bitcoins, and worth more than US$73 billion.

These companies are divided into three types: publicly traded, privately held, and ETF-like holders. Among them, Grayscale Bitcoin Trust in the United States holds the most Bitcoin, with 649,000 units, accounting for 3% of the total Bitcoin, and a value of $36 billion; MicroStrategy in the United States holds the most Bitcoin among listed companies, with 71,079 units (accounting for 0.34% of the total Bitcoin), and a value of $3.9 billion.

Key investment points that the market is concerned about

What do you think about the investment value of Bitcoin mining/mining machines/mining farms/mining pools/buying coin stocks? Is 2021 the best year?

First of all, it should be made clear that the concept stocks related to cryptocurrencies in the secondary market are essentially the reflection of BTC in the stock market, and the essence of buying this sector is to be bullish on BTC. Due to differences in business models, these stocks have more or less leverage on BTC spot, and their volatility will be greater than that of BTC spot.

Recently, the price of Bitcoin has risen rapidly, and the income of miners has increased. In addition, the production capacity of Bitcoin mining machines is limited by the production capacity of chip foundries, and the increase in the computing power of the entire network is limited. Therefore, whether it is the price of Bitcoin or the proportion of miners' computing power in the total computing power of the network, it is beneficial to the income of miners and the payback period is shortened.

The payback period for miners is also an important factor that mining machine manufacturers consider when setting prices. When the payback period for miners is shortened, mining machine manufacturers are likely to raise the price of mining machines, and the cost of purchasing mining machines will increase. The payback period for new miners is likely to be shorter than that of miners who have purchased sufficient computing power in the early stage.

According to the quotations from mining machine companies, the price per unit computing power has increased significantly compared with before and after the Spring Festival. If we return to the profit forecast, the expectation will be further revised upward. This is the elasticity of mining concept stocks.

Therefore, we believe that the business models and investment rhythms will be slightly different for different mining and coin-buying concept stocks.

1. Mining stocks (MARA, RIOT, BTBT, The 9th City, etc.) : Affected by the rise in Bitcoin prices (increased income for miners) and limited chip production capacity (pressure on the rise in the total network computing power, and the increase in the proportion of miners' own computing power in the total network computing power), 2021 may become a good year for Bitcoin mining, but it is mainly for miners who have purchased sufficient computing power in the early stage, which is beneficial to mining concept stocks that have already stored a lot of computing power in the early stage. The purchase of new mining machines will be a round of "arms race", and both price and quantity need to be paid attention to.

2. Mining machine stocks (Canaan Technology, Ebang International, etc.) : For Bitcoin mining machine manufacturers, their performance lags behind the Bitcoin price (it takes about one quarter from the mining machine manufacturers taping out wafers to wafer foundries such as TSMC, Samsung and SMIC to the delivery of the entire machine to miners). Especially in the first half of 2021, the production capacity of Bitcoin mining chips is limited and there is almost no spot. The delivery period of mining machines is mostly in June or July or later. According to our statistics, mining machine customers mostly pay in batches until the mining machines are delivered. Therefore, the performance release of mining machine manufacturers is even more delayed.

It is worth noting that Ethereum mining machines are still mainly based on graphics cards. High-end graphics cards from Nvidia, the world's main supplier, are currently in short supply. The company has also clearly stated that it will launch special models for mining, and it is obviously also a beneficiary of this round of crypto asset wave.

But it is worth noting that Canaan Technology has stated that it will start overseas self-operated mining business at the end of the first quarter or the beginning of the second quarter of 2021. On February 17, 2021, Ebang International also announced the launch of Bitcoin mining business. We believe that these measures are expected to smooth the release of mining machine manufacturers' revenue and early performance.

3. Mining farms (DMG Blockchain Solutions, etc.) : They generally have cheap electricity resources, and their business model is to provide venues and electricity for miners. Since the service period stipulated in the price contract signed with miners is longer, they are less affected by the price of Bitcoin and their performance elasticity is average.

4. Mining pool stocks (500.com) : On February 16, 2021, 500.com announced that it would acquire BTC.com mining pool with approximately 10% of its shares, including all mining pool businesses of BTC.com, BTC.com domain name and BTC.com cryptocurrency wallet. The mining pool had a market share of 12% in the year ending February 21, 2021 (OKchain browser).

Mining pools are a field that is rarely involved in the current Bitcoin mining industry chain by listed companies. The significance of this business model is to gather the scattered computing power of miners and smooth the income for miners. The industry competition pattern is relatively scattered.

5. Buy cryptocurrency stocks (Microstrategy, Tesla, etc.) : They are greatly affected by the price of Bitcoin. Whether it is the income or the cost side, it is necessary to pay attention to the cost of purchasing Bitcoin by each institution and the price of the currency when selling it.

6. Exchange stocks (Huobi Technology, OKEx, etc.) : The mapping entities of mainstream exchanges Huobi and OKcoin in Hong Kong stocks have not yet been involved in the assets of the original exchanges, but there is an expectation of integration in the future. The expected entry of Coinbase in the US into the capital market will directly catalyze this type of target.

Others (Zhongjia Broadband, Xiong'an Technology, etc.) : Zhongjia Broadband and Xiong'an Technology are respectively engaged in computing power export and blockchain industry investment businesses, and it is recommended to pay attention.

How do you view the future of Bitcoin?

Pay attention to the pace of global central bank easing, asset allocation of traditional enterprises, attitude of financial supervision, and publicity of public figures. During the 2021 Lunar New Year, the price of Bitcoin once again broke through the previous high and jumped to more than $50,000. We believe that this wave of Bitcoin price increases is mainly driven by four forces: 1. The epidemic has recurred, and global central banks are competing to ease in order to stimulate economic development; 2. In order to fight inflation, "traditional" companies have replaced cash in their assets with Bitcoin, such as Tesla and Microstrategy; 3. After Grayscale GBTC, Bitcoin ETF was approved in Canada, and more institutions are expected to enter the market; 4. Tesla founder Musk's continuous promotion of Bitcoin on social media is also an important factor, which further deepened the image of Bitcoin as "digital gold" and increased the social awareness of Bitcoin.

Beware of the risk of price fluctuations and do a good job of inventory management. The current epidemic situation in the United States has eased, the pace of economic recovery has accelerated, and the central bank's "flooding" phenomenon has shown signs of marginal tightening. The pace of asset allocation of traditional enterprises may be affected. Beware of the risk of falling currency prices, reduced mining income, increased inventory of mining machine manufacturers, and excessively high costs of purchasing Bitcoin.

Investment advice

Recommended stocks to watch: 1) Mining stocks: MARA, RIOT, BTBT, The 9th City. 2) Mining machine stocks: Canaan Technology, Ebang International, Nvidia, etc. 3) Mining farm stocks: DMGI; 4) Mining pool stocks (500.com); 5) Coin buying stocks: Microstrategy, Tesla, GBTC, etc.; 6) Exchange stocks: Huobi Technology, OKEx Cloud Chain; 7) Others: Zhongjia Broadcom, Xiong'an Technology, etc.

Appendix 1: Details of purchasing overseas Bitcoin mining stocks

America

Marathon Patent Group (MARA), Nasdaq

It was incorporated in Nevada in February 2010 under the name Verve Ventures, Inc.

In December 2011, the company was renamed American Strategic Minerals Corporation and is engaged in the exploration and potential development of uranium and vanadium minerals.

In June 2012, the company terminated its mining operations and began investing in real estate in Southern California.

In October 2012, the company ceased its real estate business and started its IP licensing business, and at the same time the company was renamed Marathon Patent Group.

In November 2017, the company entered into a merger agreement with Global Bit Ventures to focus on mining digital assets in the future. The company purchased mining machines and established a data center in Canada to mine digital assets.

In February 2018, 1,400 S9 Antminers were purchased for the first time.

In 2020, the company purchased a large number of mining machines to increase computing power.

In January 2021, the company purchased $150 million worth of Bitcoin as part of its reserves.

MGT Capital Investments (MGTI), NYSE

In September 2016, Bitcoin mining operations began in Washington.

In 2016, approximately 100 bitcoins were produced at a rate of 5 PH/s.

In October 2017, a management agreement was signed with Deep South Mining LLC and BDLM, LLC, and the investors agreed to purchase 1,944 S9 mining machines. On November 21, 2017, a management agreement was signed with Buckhead Crypto, LLC. The three investors purchased a total of 2,376 S9 mining machines at a price of US$3,650.

At the end of 2017, due to power shortages in Washington, it was decided to move the main mining operations to northern Sweden. In the first quarter of 2018, 2,000 mining machines were delivered in Sweden, and 4,300 (including 2,100 investors' mining machines) were transferred from Washington to Sweden.

In February 2018, 200 S9 mining machines were purchased from a third party.

In March 2019, the company terminated its hosting in Washington and transferred ownership of the mining machines in exchange for payment of hosting service fees.

In May 2019, a revised management agreement was signed with Deep South Mining LLC and BDLM, LLC to reconnect investors' mining machines and resume mining Bitcoin. Due to depreciation, the two still have a total of 1,800 S9 mining machines.

Mining began at the LaFayette facility in September 2019, and on January 31, 2020, it was announced that it was operating 1,500 new-generation mining machines with a power output of approximately 80 Ph/s and a total power load of slightly less than 4 MW (megawatts).

Between 2019 and September 30, 2020, a total of 1,500 mining machines were acquired, valued at US$23.13 million.

As of September 30, 2020 and January 25, 2021, it has approximately 869 and 669 S17 pro Antminers, all from Bitmain; 587 and 787 miners were sold, respectively. The total computing power rating is approximately 30 Ph/s. The adjacent public substation can provide more than 20MW of low-cost electricity, and the company's current power load is estimated to be slightly over 1MW.

Bit Digital Inc (BTBT), Nasdaq

In November 2015, Shanghai Dianniu Internet Financial Information Service Co., Ltd. started its business in China, mainly engaged in Internet financial P2P business.

In early 2017, GoldenBull Limited was established as an overseas holding company to engage in car rental business.

In October 2019, it decided to suspend its existing P2P lending business.

The Bitcoin mining business started in February 2020, with the main business areas being China’s Inner Mongolia, Xinjiang and Sichuan provinces.

In April 2020, it acquired Hong Kong XMAX Chain Limited as a wholly-owned subsidiary to operate Bitcoin mining business.

In May 2020, 3,429 M21S Shenma mining machines were purchased.

In September 2020, the company officially changed its name from "GoldenBull Limited" to "Bit Digital Inc."

In September 2020, the company established a wholly-owned subsidiary, Bit Digital USA, in Delaware, U.S., to conduct Bitcoin mining business in the United States through this company.

SoS Ltd (SOS), NYSE

The company was established in July 2004 and was then named China Risk Finance LLC.

In February 2015, a wholly-owned subsidiary, CRF China Holdings Limited, was established in Hong Kong.

In May 2020, Yongbao Second Company was acquired, which controls SOS Information Technology Co., Ltd. The main business is to use AI and cloud computing technology to provide customers with efficient emergency rescue services and information security services.

In January 2021, the company announced its cryptocurrency mining plan and plans to invest heavily in the crypto mining business. At the same time, it signed a letter of intent to acquire FXK Technology, a Canada-based company that specializes in blockchain technology consulting, as well as the operation and support of cryptocurrency exchanges and cloud crypto computing power exchanges.

In January 2021, the company announced the purchase of 14,238 Bitcoin mining machines with a computing power of 527PH/s and 1,408 ETH mining machines with a power of 1,056GH/s. Once all these mining equipment are put into operation, it is expected to generate approximately 3.5 BTC and 63 ETH per day, which is about $206,551 per day based on the cryptocurrency prices at the time.

In January 2021, a framework agreement was signed with the Leibodong Hydropower Station in Hejiang, Luzhou, Sichuan, to obtain cheap renewable electricity. According to the agreement, Leibodong will supply electricity to the cloud crypto mining center built by SOS at a price of 0.22-0.38kW/h.

Riot Blockchain (RIOT), Nasdaq

On July 24, 2000, it was incorporated as a Colorado-based biotechnology company.

On October 19, 2017, the company name was changed to Riot Blockchain and the state of registration was changed to Nevada.

In November 2017, it acquired Kairos and obtained 1,200 mining machines; in February 2018, it acquired Prive and BMSS and obtained 6,800 mining machines.

In February 2018, Kairos signed a lease agreement to build a mining facility in Oklahoma City. Riot Blockchain began to consolidate all miners into the data center. As of the end of 2018, there were approximately 7,731 miners in operation.

As of September 30, 2019, Riot has mined more than 1,820 new Bitcoins, with Litecoin and Bitcoin Cash also decreasing. By upgrading its mining facility in Oklahoma City, Riot has increased its confidence and attention on Bitcoin.

In April 2020, the Company mined 108 new bitcoins; since March 31, 2020, the Company's bitcoin inventory has increased by 13%, and as of April 30, 2020, the bitcoin inventory was 929.

Ault Global Holdings (DPW), NYSE

In 1969, Digital Power Corp. was established as a holding company. Headquartered in Las Vegas, Nevada, the company achieved rapid growth by acquiring undervalued businesses and disruptive technologies.

In January 2018, a wholly-owned subsidiary, Super Crypto Mining, was established and later renamed Digital Farms, which operates a cryptocurrency business and mines Bitcoin, Litecoin and Ethereum.

As of December 31, 2018, Digital Farms owned 2,042 mining machines.

In the third quarter of 2019, the company reduced the number of mining machines to 978 from 1,512 in the same period last year.

In March 2020, due to the impact of the new coronavirus epidemic and the decline in currency prices, it was decided to suspend cryptocurrency mining operations indefinitely and close Digital Farms.

In January 2021, the company's name was changed from DPW Holdings, Inc to Ault Global Holdings, Inc.

On February 1, 2021, the acquisition of a cloud data center in Michigan was completed, which can provide 300MW of low-cost electricity, and 1,000 S19 Pro Antminers purchased from Bitmain were purchased to resume Bitcoin mining.

The9 LTD (NCTY, The9 City), Nasdaq

Founded in Shanghai in 1998, it is a high-tech company mainly engaged in providing Internet technology and content services.

On January 4, 2021, the company announced the establishment of a wholly-owned subsidiary, NBTC Limited, which is dedicated to blockchain digital currency-related businesses. The company will establish a digital currency mining machine group, with the goal of contributing 8-10% of Bitcoin's global computing power, 10% of Ethereum's computing power, and 10% of Grin's computing power.

On January 25, 2021, the company announced that it had signed a legally binding memorandum of understanding with five mining machine owners to purchase Bitcoin mining machines by issuing additional Class A common shares. Within one month after the signing of this memorandum, the parties will complete the signing of the final agreement and execute the transaction. After the transaction is completed, the company will have 26,007 Bitcoin mining machines with a total computing power of approximately 549PH/S, accounting for approximately 0.36% of the total computing power of the entire Bitcoin network.

On February 5, 2021, the company and MicroBT signed a framework purchase agreement for 5,000 Shenma mining machines, including Shenma M32, M31, etc.

On February 8, 2021, the company announced that it had signed a legally binding memorandum of understanding (MOU) with six mining machine owners to purchase a batch of Bitcoin digital currency mining machines by issuing new shares. This batch of equipment will include Bitcoin mining machines of different brands such as Bitmain, Avalon and Shenma, with a total of 10,489 units and a total computing power of approximately 251PH/S. The mining machines have been deployed in Xinjiang, Qinghai, Inner Mongolia and other places.

500.com (WBAI), NASDAQ

It started operations in the online lottery services industry in 2001 through affiliated entities.

In April 2015, online sports lottery sales services were discontinued.

In June 2017, it acquired a 40.65% stake in Lotto Interactive Entertainment, which is listed on the Hong Kong Stock Exchange. The company currently provides a comprehensive range of services to its customers, including premises, hardware support, power supply, auxiliary supervision and management services.

In July 2017, it acquired a 93% stake in TMG, which holds licenses to operate online gaming sites in Curacao, Malta, the United Kingdom, Ireland and Sweden.

On February 2, 2021, the company purchased 5,900 Bitcoin mining machines for $8.5 million, which are expected to be delivered in the second quarter. At the same time, the company announced that it had signed a framework agreement, according to which the company agreed in principle to purchase up to 10,000 more Bitcoin mining machines in 2021.

On February 16, 2021, the company announced that it would acquire the BTC.COM mining pool with approximately 10% of its shares, including all of BTC.com's mining pool business, BTC.com domain name and BTC.com cryptocurrency wallet.

CleanSpark Inc (CLSK), Nasdaq

It was incorporated in October 1987 under the name SmartData Corporation.

In March 2014, it started to operate in the field of alternative energy.

In December 2014, the company changed its name to Strateain Inc through a short merger.

In October 2016, the company changed its name to CleanSpark Inc through a short merger to better reflect the brand image.

In January 2020, it was listed on the Nasdaq, mainly providing microgrid solutions such as microgrid design, engineering and consulting services for military, commercial and residential properties.

In December 2020, it acquired the US Bitcoin mining company ATL Data Centers for US$19.4 million. The transaction will be settled in the form of stocks, and it plans to increase the number of ASIC Bitcoin mining machines operated by ATL to four times the original number in the future.

Coin Citadel (CCTL), OTC Markets

Founded in 1986, the company is a blockchain infrastructure company dedicated to bridging blockchain and cryptocurrency to traditional capital markets, providing pure digital assets and blockchain investments to capital markets. The company also invests and collaborates in a portfolio of various digital products, including cryptocurrency, crypto assets, blockchain, mobile payment applications and digital wallets.

In November 2014, the company was renamed CoinCitadel, formerly known as Global New Energy Industries Inc.

In September 2015, the company announced that it had installed the world's first Bitcoin ATM in Woodland Hills, California.

In January 2018, the company established a mining division in Plattsburgh, New York, to mine in the area with the cheapest electricity in the United States (0.025 cents per kilowatt-hour).

Canada

Bitfarms Technologies (BITF), TSX Venture Exchange

The predecessor is Blockchain Mining.

In the fourth quarter of 2017, 10,597 Antminer S9 mining machines were purchased for the first time.

In July 2019, it began trading on TSXV with the trading code "BITF". It mainly operates computing centers and earns income through mining.

In September 2019, the company announced the delivery of 2,500 new generation A10 Avalon miners. Once fully operational, the mining hardware is expected to increase the capacity by approximately 92 PH/s, increasing the company's computing power to approximately 667 PH/s.

In the third quarter of 2019, the company sold all GPU mining machines and stopped GPU mining business.

In October 2020, the Company announced an equipment lease agreement with BlockFills for the delivery and installation of 1,000 WhatsMiner M31S mining machines by the end of November 2020. The equipment covered by the letter of intent represents approximately 800 to 840 PH/s of new computing power that will be added to the Company's operations by the end of 2020.

In December 2020, the company announced that it would order 3,000 Whatsminer M31S+ mining machines again. The company has added more than 6,000 new generation miners in the past six months. Coupled with the recent rise in Bitcoin prices, the company's total mining profit margin has increased to about 68%. By the end of February 2021, the predicted calculation power efficiency ratio has increased by 1.7%, from 17.8 PH/MW to 18.1 PH/MW.

Digihost Technology Inc (DGHI), Toronto Exchange Growth Enterprise Market

In February 2017, the company was incorporated in British Columbia, Canada under the name Chortle Capital. On September 18, 2017, it was renamed HashChain Technology.

In March 2018, the company purchased 770 Bitcoin mining machines. It also carried out a number of strategic acquisitions to increase the inventory of the Bitcoin mining platform.

In June 2018, the company announced that it was expected to receive 6,000 mining machines to be deployed later this week and will be deployed by the end of July 2018. Currently, the company has deployed 3,495 drilling rigs and has mined a total of 39.3 bitcoins.

On February 14, 2020, the company completed a reverse acquisition of HashChain Technology Inc. The cryptocurrency mining business was vertically integrated with the previously rented custodial infrastructure and equipment, and renamed it Digihost Technology.

In October and December 2020, the company further purchased mining machines to increase computing power and carried out Bitcoin mining business.

In January 2021, the company announced that as of January 31, 2021, the total number of Bitcoins currently owned by the company was 183.7 and the computing power was 184PH/s.

HashChain Technology, Inc. (DGHI), Toronto Exchange Growth Enterprise Market

In August 2017, cryptocurrency mining company HashChain Mining LLC was incorporated in New York State. Headquartered in Albany, New York, and has an office in Vancouver, British Columbia.

On November 15, 2017, 770 Bitcoin mining machines were purchased for the first time.

On December 18, 2017, it was listed on the Toronto Exchange GEM with the stock code KASH.

In February 2018, it launched digital currency accounting business and DASH master node custody services for US$8 million.

As of May 31, 2018, 100 DASH miners and 3395 Bitcoin miners were operated, and another 6,000 were deployed after completing its most recent acquisition. All of them will consume approximately 12.5MW of power after they are put into operation.

From July 18, 2018 to September 6, 2018, 197.59 Bitcoin and 60.09 Dash have been mined.

By the end of 2018, 100 DASH mining machines and 8395 Bitcoin mining machines will be operated, and another 3500 will be deployed. Once all mining machines are in operation, HashChain will operate 11,995 units, about 17.5MW.

On February 20, 2020, it was reversely acquired by Digihost Technology and became its subsidiary, with the company's stock code changed to DGHI.

Hive Blockchain Technologies (HIVE), Toronto Exchange Growth Board

In June 1987, the company was incorporated in British Columbia.

In September 2017, the company was listed on the Canadian GEM.

In December 2017, we cooperated with Genesis to start the Bitcoin cloud mining business.

In January 2018, the Ethereum mining business began in Sweden.

In August 2018, the company announced that it would launch and use 200 PH/s SHA-256 mining capabilities.

In May 2019, it announced a strategic partnership with ARGO blockchain and reached a exchange agreement.

In 2020, the company purchased/leased mining machines in large quantities to improve its computing power.

In November 2020, a custody agreement was reached with DMG Blockchain Solutions Inc and purchased 1,240 M30s from the company.

In January 2021, the company announced that it would increase the footprint of Swedish GPU mining data center by 2MW by the end of April 2021, and plans to increase Ethereum's mining capacity by 30% by the end of 2021.

In January 2021, the company continued to purchase 6440 Canaan AvalonMiner 1246, and after all deployments by the end of 2021, the computing power will increase to an estimated 1229 PH/s. The company's new goal is to reach 2000 PH/s by the end of 2021.

Hut 8 Mining Corp (HUT), Toronto Exchange

The mining business has started in December 2017, and as of September 30, 2019, a total of 12,305 Bitcoins have been mined.

As of March 5, 2018, a total of 645 Bitcoins have been mined.

On June 21, 2018, and Bitfury set up 16 BlockBoxes in the city of Medicinhat with a total installed capacity of 19.2MW and 8PH/s. It also operates 17 BlockBoxes in Alberta, 18.7MW. The company has a total of 37.9MW and 256PH/s.

On July 16, 2018, 40 BlockBoxes were operated in CMH, totaling 48MW; 17 BlockBoxes were operated in Drumheller, totaling 18.7MW. The company has a total of 66.7MW, 487.5PH/s.

On September 9, 2019, 9 data centers were purchased from Bitfury for US$7 million, increasing computing power by about 113PH/s (+13.3%) and increasing power consumption by about 9.9MW. The total computing power reached about 963PH/s, and 109.4MW was employed at full load.

Trading started on TSX on October 8, 2019, making it the first blockchain or cryptocurrency company to be listed on TSX.

Other countries

Argo Blockchain PLC (ARB), London Exchange

The company was established in 2017 and is headquartered in London, UK.

In 2019, the company's Bitcoin mining volume was 1,330, and about 7,000 mining machines were operated by the end of the year.

The total number of mining machines increased to 17,000 in the first quarter of 2020, and the final computing power will be close to 730 PH/s.

In April 2020, oil tycoon Frank Timis acquired a 14% stake in Argo Blockchain, becoming the company's largest shareholder.

Currently, the company's computing power is 787PH/s and its power is 31MW. By June 2021, the total mining capacity will reach 1685PH/s. The company has purchased 10,000 machines (some have been delivered in advance) required to achieve this target, and is expected to be delivered in batches between February and June.

Northern Data AG (NB2), Frankfurt Exchange

Founded in 2020 through the merger of Northern Bitcoin AG in Germany and Whinstone US in the United States, headquartered in Frankfurt. One of the world's largest providers of blockchain solutions and data center solutions.

In 2019, it expanded its production capacity at its Lefdar Mine Data Center (LMD) in Norway.

In July 2019, 4475 Bitcoin mining machines were acquired, and the mining capacity doubled from 57 PH/s to about 112 PH/s.

In February 2020, the company merged with US data center developer Whinstone US.

In November 2020, the first data center was commissioned in the Netherlands, which will become the company's first data center in the EU.

In November 2020, its first data center began operating in Frankfurt.

In January 2021, the acquisition of a northern Sweden data center site powered by green energy, containing six data center halls and 2.5 hectares. The local hydropower plant has a capacity of about 4.5GW and can generate about 14TWh per year, and the company can enjoy the lowest electricity price in the EU.

Attachment 2: Details of buying coins from overseas Bitcoin stocks and coins

Tesla (TSLA), Nasdaq

In July 2003, it was founded in Palo Alto, California as an electric vehicle and clean energy company.

In February 2004, Musk injected capital into the company and became the chairman of the board of directors.

In 2009, the company began producing its first car model, Roadster. It was followed by the Model S in 2012, the Model X in 2015, and the Model 3 in 2017.

In 2020, the company's electric vehicle production exceeded 1 million.

In February 2021, the company purchased $1.5 billion worth of Bitcoin and said it would soon accept Bitcoin as a payment method.

MicroStrategy (MSTR), Nasdaq

In 1989, the company was founded in Delaware and is committed to developing software for analyzing internal and external data.

In 1994, the company moved from Delaware to Virginia.

In 2011, the company expanded its product range to cloud services.

In August 2020, the company purchased $2.5 worth of Bitcoin as reserve assets on the grounds of falling cash earnings, weak US dollar and other global macroeconomic factors. As of February 2, 2021, the company purchased more than $1 billion in Bitcoin, with an average purchase price of $15,964.

Square (SQ), Nasdaq

In 2009, the company was established in California to provide financial services, merchant services and mobile payment technology.

In October 2020, the company invested about 1% of its total assets (about $50 million) in Bitcoin, citing "there is a potential future for becoming a more popular currency."

Cypherpunk Holdings (HODL), Canadian Stock Exchange

Formerly known as Khan Resources.

In November 2018, the company was renamed Cypherpunk Holdings, investing in crypto technology and cryptocurrencies through its subsidiary.

In December 2020, the company announced its investment in the next-generation hardware wallet company NGRAVE.

On January 29, 2021, the company announced that the number of Bitcoins it holds reached 291.64, an increase of 27.9 from September 30, 2020.

BIGG Digital Assets (BIGG), Canadian Stock Exchange

In October 2014, the company was established, headquartered in Vancouver, Canada, formerly known as BIG Blockchain Intelligence Group. The company develops blockchain search and analysis businesses for global financial and e-commerce enterprises, and its main businesses are divided into two parts: blockchain technology development and digital currency sales brokerage.

In August 2020, the company announced that its platform's monthly transaction volume reached a new high, reaching CAD 13 million.

In December 2020, the company announced that it had purchased 40 new Bitcoins as its long-term asset inventory at a unit price of 24,854 Canadian dollars (about 19,386 US dollars), with a total value of 994,160 Canadian dollars (about 775,444 US dollars) and held a total of 189.5 Bitcoins.

In February 2021, the company announced a strategic move to invest in Bitcoin with free cash flow in operation.

Neptune Digital Assets (DASH), Toronto Exchange Growth Board

In 2017, the company was founded and headquartered in Toronto, Canada, formerly known as Neptune Dash.

In December 2020, the company was renamed Neptune Digital Assets.

In January 2021, the company released its financial statements as of November 30, 2020 and its management discussions and analysis. The statements showed that the company owned digital assets: 77 BTC, 139,530 ATOM, 2,006 DASH and 155 ETH.

Galaxy Digital (GLXY), Toronto Stock Exchange

In November 2017, the company was established as a diversified financial services and investment management company dedicated to the digital asset and blockchain technology industries, and is determined to become "Goldman Sachs in the cryptocurrency field".

In May 2018, the company was successfully listed on the Toronto Stock Exchange through reverse acquisition.

Currently, there are four business lines: asset management, proprietary investment, trading, and consulting services.

Attachment 3: Details of overseas Bitcoin mining stocks

DMG Blockchain Solutions Inc (DMGI), Toronto Exchange Growth Enterprise Market

In 2016, the company was established as a diversified blockchain and cryptocurrency company dedicated to managing, operating and developing end-to-end solutions to monetize the blockchain ecosystem.

In 2016, it began to provide mining machine custody services and conduct large-scale Bitcoin mining as a third party.

In 2018, it acquired Datient Inc., a Silicon Valley-based technology company, to create Bitcoin and Ethereum blockchain analytics tools such as Blockseer.com to track cryptocurrencies and transactions.

In October 2019, Bitmain hosted its North American facility to the company. Texas currently has 50MW of electricity available and has the potential to expand to 300MW, making it one of the largest Bitcoin mining facilities in the world.

In May 2020, 1,000 M30s mining machines were ordered for self-operated Bitcoin mining business, saying that the target in 2020 is the latest 500PH/s, and this acquisition will increase by about 90P. ASIC mining technology. This deployment will add about 90P to the existing fleet.

In November 2020, the company added Hive Blockchain Technology as a hosting customer and sold 1,240 M30s mining machines to the company. The company no longer mines itself.

In January 2021, a non-binding memorandum of understanding was signed with Marathon Patent Group Inc to establish North American Digital Currency Miners (“DCMNA”), which will be a US-based nonprofit entity with the goal of creating a better mining environment for North American miners to help improve their financial situation and create North America’s first cooperative mining pool.

Risk Warning

Coin price fluctuations. The current epidemic situation in the United States has eased, the pace of economic recovery has accelerated, and the central bank's "water release" phenomenon shows marginal tightening. The pace of asset allocation of traditional enterprises may be affected. Beware of the risks of falling coin prices, reducing mining income, increasing inventory of mining machine manufacturers, and excessive Bitcoin purchase costs.

Regulation is tightening. Securities regulators in various countries may investigate the purchase of Bitcoin by listed companies, or delay reviewing the passage of products such as Bitcoin ETFs.

Statistical deviation of data. A considerable part of the data in this report was manually collected from company announcements and news, or there may be statistical deviations.