With the advent of historic monetary policy measures from the Federal Reserve and other central banks around the world in response to the COVID-19 pandemic, financial assets that hold the capacity to serve as a store of value while fiat currencies come under fire have been appreciating, with Bitcoin at the head of the pack.
ISW Holdings Inc (OTCMKTS:ISWH) is among a number of interesting possibilities for equities investors seeking exposure to the cryptocurrency theme. In the case of ISWH, this thematic tie is the result of a recent announcement that features news of a new joint venture with Bit5ive LLC, a global leader in cryptocurrency mining and innovative turnkey mining solutions.
According to the release, Bit5ive is an official distribution partner of Bitmain, the industry-leading fabless manufacturer of computing chips and distributor of Antminers to more than 30 countries in Latin America, Central America, and the Caribbean. In addition, Bit5ive is the producer and distributor of POD5 and Power Skid 2.5, the most efficient and successful infrastructure for crypto mining hardware. Bit5ive is quickly becoming one of the largest U.S.-based companies in the cryptocurrency mining and bitcoin farm industry.
This factor pairs up with the company’s recent partnership with Proceso, LLC.
According to company materials, “it is no secret that power supply is a major driving force of businesses. An increased need to power the technology and systems that run our complex world makes renewable energy more important than ever. Knowing the importance of renewable energy, we have partnered with Proceso, LLC. to pursue its interest in creation of high-density processing and mobile datacenters delivering via its network of brokers, partners, suppliers, and clients. We are working towards providing a better alternative to fossil fuels and quality of development currently used in datacenters. With Proceso’s future locations in Houston, Texas, Colorado, and Pennsylvania, we intend to build and power our data centers in these locations with renewable energy. This will help companies lower the cost of power to their clients, including providing hosting and colocation services to various growing industries such as cryptocurrency mining and the gaming industry.”
In other words, this direction is also about more than just cryptocurrency mining, with clear applications to the broad data center and colocation marketplace.
ISW Holdings isn’t alone in developing a growing appreciation for the cryptocurrency marketplace in recent months. The price of Bitcoin is one standard indication of this phenomenon, with BTC appreciating as much as 125% since the middle of March. Even more impressive, Ethereum has run as much as 400% during the same time.
In short, the cryptocurrency space is back in a massive bull market.
It’s no wonder, with unprecedented money printing and extreme central banking coming into the picture since the worldwide crash in asset prices in March of this year following the pandemic outbreak of the SARS-CoV-2 virus on a global scale. Central bankers are making a bet that they can team up with government fiscal programs to build a bridge across a shutdown-induced global recession of historic proportions. There is at least some risk that this bet doesn’t work out without even more extreme measures.
Investors have limited means to hedge against this bet, with gold and cryptocurrencies being foremost on that short list.
This has sparked a massive rally in the price of various cryptocurrencies. And, as history teaches us, massive rallies in crypto prices bring in massive demand for the resources needed to mine them.
That’s where ISWH and Bit5ive step into the fold – with a new joint venture capable of becoming a leading beneficiary. However, ISWH is the only way to play this idea for stock market traders interested in the joint venture (as Bit5ive is not publicly traded).
Rounding Out the Picture
ISW Holdings Inc (OTCMKTS:ISWH) is actually interesting beyond this deal for a number of reasons – this is a diversified holding company with a range of exposure in growth markets.
In addition, the company has been performing well in terms of its recent quarterly filings, recently racking up a string of sequential q/q growth leaps at double-digit percentage scale on the top-line. While we are still dealing with relatively small numbers, one can easily make a case that the company will be looking at something like $2-3 million in revenues for 2020, and considerably more in 2021 based on organic growth in the home healthcare market, which currently accounts for the lion’s share of its recent revenue performance.
Note that those numbers do not take into account any tangible returns from its joint venture with Bit5ive, which seems to suggest these may be very conservative assumptions.
If that’s true, the stock is now trading at well less than 1x forward sales despite being tethered to very high-growth industries such as cryptocurrency capital equipment supplies, renewable energy, home healthcare, adult beverage, and wellness industry.