The big story at the start of the week: Bank stocks are in crisis. Thanks to a snowball effect resulting from the Silicon Valley Bank stock implosion, the fear created over the weekend reached a fever pitch on Monday. Whether you’re trading penny stocks or $100 stocks, the overall trend is bearish, to say the least. A “run on banks,” as it were, has impacted many of the regional financial institutions thanks to customers fearing that their money could be lost.
In a joint statement, The Federal Reserve, Treasury Department, and Federal Deposit Insurance Corporation announced over the weekend:
“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary [Janet] Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
Despite these measures, it has taken its toll on bank stocks, in general. But one area reacting in a completely opposite nature is companies with exposure to cryptocurrency and blockchain technology. One of the benefits of this technology and these types of assets is that they can be transacted 24/7, and, in theory, the digital wallet a user has is their own, and they can decide how they want to store their money without any intermediary.
Cryptocurrency Stocks Take Flight
With regulators stepping in on traditional banks, tech-focused crypto holders are looking to beef up their holdings of digital currencies. Bitcoin prices surged over 18%, Ethereum jumped over 15%, and crypto-centric ETFs like Proshares’ Bitcoin Strategy ETF (NYSEARCA: BITO) popped by more than 17% on Monday. With fear and greed leaning on the “Extreme Fear” side of things, it would appear that there is some optimism and upbeat sentiment in several pockets of the stock market today.
Bitcoin and crypto are a few of these areas. Today’s article looks at a handful of penny stocks following suit. While this is a primarily sympathy-based move, we also look at any recent or upcoming events worth noting should the trend see follow-through this week.
Iris Energy Limited (IREN)
Iris is one of the companies we’ve discussed this year. In the article Penny Stocks To Buy After CPI Report? 3 To Watch Today, IREN stock was mentioned alongside other companies that turned heads in February. If you’ve followed the saga of Bitcoin over the last few years, you know that energy costs and the strain on the grid have been a sticking point for some investors. Green and clean energy alternatives are taking center stage as the latest iteration of Bitcoin mining companies comes to the forefront. This has helped put some attention on the penny stock recently.
Iris specializes in Bitcoin mining data centers that it powers using 100% renewable energy. In a February 13th update, management discussed increasing from 2.0 EH/s to 5.5 EH/s. New miners will be installed in the company’s data centers over the coming months to achieve this target.
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Fast-forward to now, and Iris continues releasing critical updates promoting bullishness in the market. This week the company announced that it began 5.5EH/s installation. This was further to the February news and confirmed delivering and installing its newly acquired miners. Separately, Iris also mentioned that it had no deposits with the recently failed Silicon Valley Bank, Silvergate Capital, or Signature Bank.
Bit Digital Inc. (BTBT)
Shares of Bit Digital also took flight on the back of Bitcoin’s optimistic outlook. The company recently announced forming a joint venture with Mega Matrix Corp. to offer digital asset staking technology through the MarsProtocol staking platform.
Sam Tabar, Chief Strategy Officer of Bit Digital, said: “We are excited to partner with Mega Matrix to jointly explore the digital asset staking technology business. Our intention for this Joint Venture is to provide world-class digital asset staking technology. We are bullish on the Ethereum network and believe our ETH staking strategy is an ideal complement to our core bitcoin mining business.”
Like Iris, news of the SVB collapse raised concerns about potential exposure. In an exclusive with Benzinga, Bit Digital’s Tabar confirmed that the company had no such exposure.
Hut 8 Mining Corp. (HUT)
Shares of HUT stock have slowly dipped over the last few weeks as Bitcoin prices slumped. That starkly differed from Monday’s opening bell action, where Hut 8 mining shares bounced 20%. The company mines digital assets and added more fuel to the fire with a business update to start the week.
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Hut 8 provided more details on a business combination with US Bitcoin Corp. Plans to effect an all-stock merger of equals. One of the hurdles (somewhat) was the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 concerning the Company’s proposed business combination. That has since expired, which satisfies one of the closing conditions of the transaction.
With some bullishness back in the market, HUT stock’s bounce has been a warm welcome for those who’ve watched the stock during the second half of the quarter.
Bitfarms Ltd. (BITF)
Like HUT, BITF stock has moved higher at the start of the week. The price of Bitfarms stock has followed the same trend as Bitcoin prices in February and March. The latest concerns over traditional banking institutions have helped bring some bullishness to decentralized platforms and the companies developing them.
Bitfarms also mines Bitcoin and, in a recent update, cited that last month it collected a total of 387 BTC, exceeding 20,000 BTC. Ben Gagnon, Chief Mining Officer of Bitfarms, said, “In February, we mined 387 BTC, increasing production by 30% year-over-year although lowering the average BTC mined per day to 13.8 month-over-month. February production was primarily impacted by unseasonably cold weather in Quebec as we curtailed over 10,000 MWh during an already short month. Additionally, network difficulty is up 21.7% year to date, following another 10% increase on February 24. While this reflects rising confidence in the industry, it also emphasizes the advantage of Bitfarms being a low-cost producer.”
This week and next could be important for Bitfarms outside the general industry sentiment. The company presents at the Roth Growth conference (this week) and the Sidoti Small-Cap Conference (next week). Bitfarms also delivers its fourth quarter and full-year financial results on the 21st.
List of Penny Stocks
- Iris Energy Limited (NASDAQ: IREN)
- Bit Digital Inc. (NASDAQ: BTBT)
- Hut 8 Mining Corp. (NASDAQ: HUT)
- Bitfarms Ltd. (NASDAQ: BITF)
