Sphere 3D Stock Remains a Solid Crypto Mining Play
InvestorPlace - Stock Market News, Stock Advice & Trading Tips Given its exposure to crypto and all that entails, this may not be a great play for everyone. But if...
Canada-based Sphere 3D Corp (NASDAQ:ANY) is just coming off an incredible run-up in price. As I’ve noted previously, this big jump in the ANY stock had nothing to do with the company’s legacy software business, and everything to do with its pending move into the Bitcoin (CCC:BTC-USD) mining industry. So, despite the plethora of Bitcoin mining stocks out there, and inherent volatility of crypto itself, ANY stock still has solid long-term potential.
Once it became known this company was moving into this industry, via a merger with Gryphon Digital Mining, it didn’t take long for investors to pile in. In the three months following the news, shares bolted from around $2 to as much as $11.98 per share.
Of course, this nearly six-fold run-up wasn’t completely due to the merger news. The rebound of Bitcoin itself played a major role in its outsized gains during that time frame. But now, as BTC prices hold steady at just over $60,000, the traders that got into this name at the right time are starting to take profit.
So, the party’s over, the ship’s sailed, all that jazz? Not exactly. It likely won’t be until crypto takes off again, or until the merger deal closes, that this stock makes another big move. But if you’re looking for exposure to this interesting and high-potential industry then you may want to consider grabbing this name in lieu of the larger publicly traded names in the space. I’d just wait until after it’s fallen back to high-single-digit prices.
What Makes ANY Stock an Interesting Crypto Mining Play
With so many Bitcoin mining stocks out there, what makes this one in particular one to buy? Good question. Yes, take a look at the many plays into this space, and they may seem like they’re one and the same.
But dig deeper, and clear there are some that are more promising than others. I won’t go into detail about similar plays. I will, however, give you an overview of what may make ANY stock in particular a great vehicle for crypto mining exposure.
There are two key items of note when it comes to Sphere 3D, soon-to-be Gryphon. First, its hashing power. Once its merger closes, and it brings a combined 67,200 Antminer S19j Pros online it will be a major mining powerhouse. With a combined hashing power of 6.7 exahash, it’ll have the ability to produce 1,245 Bitcoin per month. Based on current BTC prices, that translates into over $920 million in annualized revenue.
The second item of note? Gryphon’s status as the first carbon-neutral Bitcoin miner. Sure, this alone doesn’t give it any sort of direct edge or advantage. But it makes this company more environmental, social and governance (ESG) compliant than other names in this space. And this could give it an advantage when it comes to attracting investors.
As Shares Slip, Long-Term Crypto Bulls May Want to Buy
So, it’s clear there’s merit in buying ANY stock for exposure to Bitcoin mining. Yet with the price of BTC slipping again, and the price of this stock slipping as well, is it the best to buy it today?
It depends on your long-term view on crypto. If you have a bearish or even a neutral view on crypto prices going forward? This may not be the play for you. Given it trades wildly, based on the underlying price action of the crypto it mines, you can expect high volatility. Such volatility may be tough to stomach.
On the other hand, if you’re bullish on crypto, and believe that, far from topping out, Bitcoin has the potential to eventually reach six-digit prices? Now may be the right time to consider buying plays like this. Not only because you are buying on weakness, ahead of BTC (and in turn, ANY stock) heading to higher prices. But buying now also enables you to get in before it scales up its operations yet again. With an option to buy 160,000 more mining rigs, its leveling up to a 6.7 exahash may just be the start.
The Verdict on ANY Stock
After its incredible run this summer, interest in Sphere 3D has waned. Now nearly 44% cheaper than it was near its highs, the opportunity has opened up to buy it at a more favorable entry point.
Again, it may take time for it to make its next big move. High volatility should be expected as well. If BTC dips further, it could have an outsized effect on this crypto miner’s stock price. Shares could also move wildly, if there’s further delay with the company’s merger with Gryphon. And this stock has a “B” grade in my Portfolio Grader.
Given its exposure to crypto and all that entails, this may not be a great play for everyone. But if you’re bullish on crypto, and want exposure to Bitcoin mining? You may want to give ANY stock a closer look.
On the date of publication, Louis Navellier did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
On the date of publication, the InvestorPlace Research Staff member primarily responsible for this article held a LONG position in Bitcoin. They did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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