MGTI & GBTC about to close the gap with BTC? LONG
GBTC - a bitcoin investment trust and MGTI a bitcoin mining and crypto security company have moved in a correlation to bitcoin throughout 2017 up until October 2nd where BTC has taken off into full fledged rally mode while leaving GBTC and MGTI behind.
Looking at the edge formed in GBTC and MGTI strongly suggest we'll see a breakout in share price for both as they rapidly move to fill the gap with BTC. Fundamentals suggest the same rally is about to take off, as long as bitcoin can hold above $5500.
But why the divergence over the past 2 weeks? Are we forever stuck at the 61.8 fib line? Heck no!
GBTC has enjoyed something of a monopoly as it's the closest thing we have to a bitcoin ETF at the moment which means GBTC can be bought in an IRA account. During the August BTC rally to 5K GBTC traded as high as $1050 (130% premium) before crashing down 50%. Currently the premium is about 28% but did reach 20% yesterday. The premium seems to be stable around 30% currently but be advised the premium will disappear should a similar bitcoin investment trust or ETF come online in the near future. Any buy below $700 is a good one in my view.
MGTI - is the better play of the two.
MGT Capital Investments is America's largest bitcoin mining company and they are rapidly expanding their mining operations. MGTI expects to generate 2M in revenue or roughly 350 bit coins per month by the end of the year as it's new rigs are delivered and come online. MGTI stock began to really take off after we learned they were mining 100 bit coins per month earlier this year. Based on projected revenue from the rigs coming online this quarter, the share price should be $5 plus but currently trades at a 50% discount.
So why the discount in MGTI?? In a word, FUD.
Noobie and want to be day traders are currently complaining about MGTI's recently announced plan to seek approval from share holders to increase the total number of authorized shares from 75 million to 200 million. Additionally, MGTI also seeks approval to reverse stock split in the rage of 2 for 1 to 7 for 1.
Dilution, right? Well, not quite.
It should be noted that MGTI made almost the exact same announcement in 2016 yet did not increase the number of shares of reverse split the stock. Having the option to is a way to raise capital and fund expansion of the mining operations. The reverse split would be necessary to be listed on NASDAQ.
The other complaint I see is that MGTI will not own the nearly 2000 additional mining rigs recently announced. So what? MGTI is going to manage these rigs and for this they will receive 10% of all bitcoins mined and 50% of the net profits. Investors on the other are paying the upfront cost of these machines. MGTI also gave them 350K restricted shares of stock plus 350 warrants at $2 per share.
This also means there pools of investors. This is INCREDIBLY BULLISH NEWS, HOW DO YOU NOT SEE IT?
Short term MGTI should see $3.85 and a price well over $6 in early 2018 based on their giant LEAP in revenue from their mining operation. I see MGTI reaching $20 to $26 in the summer of 2018.
Disclaimer - I am LONG 50K shares of MGTI and 100 shares GBTC.
Looking at the edge formed in GBTC and MGTI strongly suggest we'll see a breakout in share price for both as they rapidly move to fill the gap with BTC. Fundamentals suggest the same rally is about to take off, as long as bitcoin can hold above $5500.
But why the divergence over the past 2 weeks? Are we forever stuck at the 61.8 fib line? Heck no!
GBTC has enjoyed something of a monopoly as it's the closest thing we have to a bitcoin ETF at the moment which means GBTC can be bought in an IRA account. During the August BTC rally to 5K GBTC traded as high as $1050 (130% premium) before crashing down 50%. Currently the premium is about 28% but did reach 20% yesterday. The premium seems to be stable around 30% currently but be advised the premium will disappear should a similar bitcoin investment trust or ETF come online in the near future. Any buy below $700 is a good one in my view.
MGTI - is the better play of the two.
MGT Capital Investments is America's largest bitcoin mining company and they are rapidly expanding their mining operations. MGTI expects to generate 2M in revenue or roughly 350 bit coins per month by the end of the year as it's new rigs are delivered and come online. MGTI stock began to really take off after we learned they were mining 100 bit coins per month earlier this year. Based on projected revenue from the rigs coming online this quarter, the share price should be $5 plus but currently trades at a 50% discount.
So why the discount in MGTI?? In a word, FUD.
Noobie and want to be day traders are currently complaining about MGTI's recently announced plan to seek approval from share holders to increase the total number of authorized shares from 75 million to 200 million. Additionally, MGTI also seeks approval to reverse stock split in the rage of 2 for 1 to 7 for 1.
Dilution, right? Well, not quite.
It should be noted that MGTI made almost the exact same announcement in 2016 yet did not increase the number of shares of reverse split the stock. Having the option to is a way to raise capital and fund expansion of the mining operations. The reverse split would be necessary to be listed on NASDAQ.
The other complaint I see is that MGTI will not own the nearly 2000 additional mining rigs recently announced. So what? MGTI is going to manage these rigs and for this they will receive 10% of all bitcoins mined and 50% of the net profits. Investors on the other are paying the upfront cost of these machines. MGTI also gave them 350K restricted shares of stock plus 350 warrants at $2 per share.
This also means there pools of investors. This is INCREDIBLY BULLISH NEWS, HOW DO YOU NOT SEE IT?
Short term MGTI should see $3.85 and a price well over $6 in early 2018 based on their giant LEAP in revenue from their mining operation. I see MGTI reaching $20 to $26 in the summer of 2018.
Disclaimer - I am LONG 50K shares of MGTI and 100 shares GBTC.
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