Authors: JoyChen, EvanLu, Waterdrip Capital

As the global financial regulatory environment becomes clearer, the Cryptocurrency market is gradually moving from its original 'niche circle' towards the mainstream financial system. Since the US presidential election, President Trump's positive impact on the Cryptocurrency industry, promising to adopt a more friendly regulatory policy, including establishing a national BTC reserve and encouraging the expansion of BTC Mining activities in the United States, has boosted market confidence. In the following days, there was a widespread transmission in the Capital Market, and multiple Blockchain concept stocks rose across the board.

Currently, more and more listed companies have realized the huge potential of Blockchain technology and actively incorporated it into their strategic layout. Many companies with Blockchain concepts have shown strong development momentum and gained significant follow and investment in the market. These companies have promoted digital transformation and value creation in their businesses by introducing Blockchain technology, gradually becoming important players in the industry. We have closely followed many stocks in this field and have seen their increasingly impressive performance in the Capital Market. They are expected to embrace greater development opportunities driven by Blockchain in the future:

In recent years, especially with the launch of Cryptocurrency-related ETFs in the United States (such as BTCSpotETF), the regulatory dividend has signaled that Cryptocurrency is no longer limited to the closed Digital Money market, but is integrated with the traditional Capital MarketDepth. As a pioneer, Grayscale's BTC trust (GBTC) has become a bridge for traditional investors to enter the encryption market. Data shows that the Assets Under Management of the BTCSpotETF (IBIT) under the umbrella of BlackRock has reached 17.243 billion US dollars and has been in a net inflow state almost continuously since the beginning of the year. The management scale of Grayscale BTCSpotETF (GBTC) is 13.659 billion US dollars, demonstrating investors' interest and confidence in this emerging asset class.

The total market value of the current Crypto Assets market is about $3.2 trillion, which can be divided into the following three main categories according to asset class:

1. BTC（BTC） As the core asset of the entire crypto market, BTC currently has a Market Cap of approximately $1.9 trillion, accounting for over 50% of the total Cryptocurrency Market Cap. It is not only a recognized store of value tool in both TradFi and the native coin circle, but also the preferred choice for institutional investors due to its anti-inflationary properties and limited supply, earning it the title of "digital gold." BTC plays a crucial role in the crypto market, stabilizing the market while also providing a bridge between traditional assets and native on-chain assets.
2. Native on-chain assets include public chain Tokens (such as Ethereum ETH), tokens related to Decentralized Finance (DeFi), and functional tokens in on-chain applications. This field has a wide variety of types and high volatility, and its market performance is driven by technological updates and user demand. Currently, the Market Cap is about $1.4 trillion, which is actually far below the high rise expected by the market.
3. Combining Traditional Assets with Encryption Technology This field covers emerging projects such as on-chain Real World Assets (RWA) tokenization, blockchain-based securitized assets, and more. Currently, its Market Cap is only a few hundred billion US dollars, but with the integration of blockchain technology and TradFi's depth, this field is developing rapidly. Tokenizing traditional assets to improve liquidity is also one of the main driving forces for the future rise of the encryption market. We are confident in this area and believe that it will drive TradFi towards a more efficient and transparent digital direction, unleashing tremendous market potential.

Why are we so optimistic about the rise space of traditional assets?

Over the past six months, the asset attributes of Bitcoin (BTC) have undergone a new evolution, and the dominant force in the Capital Market has also completed the transition from old forces to new capital plates.

In 2024, the position of cryptocurrency in the TradFi field is further consolidated. Financial giants including BlackRock and Grayscale have successively launched exchange trading products for BTC and Ethereum, providing more convenient digital asset investment channels for institutions and retail investors, which further confirms the connection with traditional securities.

At the same time, the tokenization trend of Real World Assets (RWA) is accelerating in the real world, further enhancing the Liquidity and coverage of the financial market. For example, the German state-owned development bank KfW issued two digital bonds through blockchain technology in 2024, totaling 150 million euros. These bonds are settled through Distributed Ledger Technology (DLT), and the French computer equipment manufacturer Metavisio issued corporate bonds, using tokenization to provide capital support for its new manufacturing facility in India, which also demonstrates that traditional Financial Institutions are using blockchain technology to optimize operational efficiency. Many Financial Institutions have already introduced encryption technology into their business models.

Nowadays, a fund circulation mode with BTC as the core asset, using ETF and the stock market as the main channels for capital inflows, and relying on US-listed companies like MSTR as the platform, is continuously absorbing USD Liquidity and expanding comprehensively.

The combination of TradFi and blockchain will bring about more investment opportunities than native on-chain assets. Behind this trend, it reflects the market's emphasis on stability and practical application scenarios. The TradFi market has a solid infrastructure and mature market mechanisms. After integrating blockchain technology, it will unleash greater potential.

This research report will analyze the rise pattern of Block chain concept stocks, especially their combination with on-chain assets, to explore more innovative investment opportunities. For example, MSTR's issuance model demonstrates a typical path of exchanging USD assets for on-chain assets through convertible bonds and stock issuance. Recently, MSTR's stock price has rapidly surged along with the price of Bitcoin, and the yield of its convertible bonds due in 2027 has reached a three-year high, surpassing the performance of traditional tech stocks by far.

Through these perspectives, it can be found that the future development of the crypto market is not only the increment of Digital Money itself, but also the huge potential of integration with TradFi. From regulatory dividends to changes in market structure, blockchain concept stocks are at the key node of this trend, becoming the focus of global investors.

We roughly classify the current concept stocks of blockchain into the following categories:

一、Asset-driven concept：

Regarding the concept of asset allocation, the company's strategy is to use BTC as the main reserve asset. This strategy was first implemented by MicroStrategy in 2020 and quickly attracted market follow. This year, other companies such as Japanese investment firm MetaPlanet and Hong Kong-listed Boyaa Interactive have also joined in, and the number of BTC acquisitions has been increasing. Meta announced the introduction of BTC Yield, a key performance indicator developed by MicroStrategy, with a BTC yield of 41.7% in Q3 and a whopping 116.4% in Q4 (ending October 25).

TOP 30 listed companies globally that hold BTC as corporate reserve assets, data source: coingecko

Specifically, the strategy of companies like MicroStrategy is to introduce the key performance indicator of 'BTC yield' to provide investors with a new perspective to evaluate the company's value and investment decisions. This indicator is based on the diluted number of outstanding shares and calculates the amount of BTC held per share, without considering the fluctuation of BTC prices. It aims to help investors better understand the company's actions of purchasing BTC through issuing additional common shares or convertible instruments, and focuses on balancing the amount of BTC held and the dilution of equity. As of now, MicroStrategy's BTC investment yield has reached 41.8%, indicating that the company has successfully increased its holdings while avoiding excessive dilution of shareholder interests.

However, despite MicroStrategy's significant success in BTC investment, the company's debt structure still attracts market follow. It is reported that MicroStrategy's current outstanding debt total is $4.25 billion. During this period, the company raised funds through multiple rounds of issuance of convertible bonds, some of which also come with interest payments. Market analysts are concerned that if the BTC price drops significantly, MicroStrategy may need to sell some BTC to repay its debt. However, some believe that due to MicroStrategy's stable traditional software business and low interest rate environment, its operating cash flow is sufficient to cover debt interest, so even if the BTC price experiences a big dump, it is unlikely to force the company to sell its BTC assets. In addition, MicroStrategy's stock market capitalization currently stands at $43 billion, and the proportion of debt in its capital structure is relatively small, which further reduces liquidation risk.

Despite many investors being optimistic about the company's steadfast BTC investment strategy and believing that it will bring substantial returns to shareholders, some investors are also concerned about its high leverage and potential market risks. Due to the extreme volatility of the cryptocurrency market, any adverse market changes may have a significant impact on the asset value of such companies, and their stock prices are significantly higher than their net asset value, whether this situation can continue is the focus of market attention. If the stock price experiences a pullback, it may affect the company's financing capabilities and thus impact its future BTC purchase plans.

1、Microstrategy(MSTR)

Business Intelligence****Software Company

MicroStrategy was founded in 1989, initially focusing on business intelligence and enterprise solutions. However, starting in 2020, the company transformed into the world's first publicly traded company to use BTC (BTC) as a reserve asset, a strategy that fundamentally changed its business model and market position. Founder Michael Saylor played a key role in driving this transformation, shifting from an early BTC skeptic to a staunch supporter of Cryptocurrency.

Since 2020, MicroStrategy has continuously purchased BTC through self-owned funds, debt financing, and other means. As of now, the company has accumulated approximately 279,420 BTC, with a current Market Cap of nearly 23 billion US dollars, accounting for about 1% of the BTCAggregate Supply. The most recent acquisition occurred between October 31, 2023, and November 10, 2023, acquiring 27,200 BTC at an average price of $74,463. The average Holdings price of these BTC is $39,266, while the current BTC price has reached around $90,000, resulting in MicroStrategy's unrealized gains being close to 2.5 times.

Despite facing a paper loss of approximately $1 billion in its BTC investment during the Bear Market period in 2022, MicroStrategy has never dumped BTC and instead chose to continue increasing the position. Since 2023, the strong pump of BTC has significantly boosted MicroStrategy's stock price, with a Return on Investment of 26.4% year-to-date and a cumulative Return on Investment of over 100%. MicroStrategy's current operating model can be seen as a "BTC-centric circular leverage model", raising funds through bond issuance to purchase BTC. While this model brings high returns, it also carries certain risks, especially during volatile price fluctuations of BTC. According to analysis, the company may face liquidation risk only if the BTC price falls below $15,000, which is highly unlikely given the current BTC price approaching $90,000. Furthermore, the company has a low leverage ratio and there is strong demand in the bond market, further enhancing MicroStrategy's financial stability.

For investors, MicroStrategy can be seen as a leveraged investment vehicles in the BTC market. With the expectation of a steady pump in BTC price, the company's stock has great potential. However, caution is needed against the medium to long-term risks that may arise from debt expansion. In the next 1 to 2 years, the investment value of MicroStrategy is still worth following, especially for investors who are optimistic about the BTC market prospects. This is a high-risk, high-return target.

2. Semler Scientific(SMLR)

However, Semler's core business still focuses on its QuantaFlo device, which is mainly used for diagnosing cardiovascular diseases. However, Semler's BTC strategy is not just a financial reserve. In the third quarter of 2024, the company realized $1.1 million in unrealized gains from BTC Holdings, despite a 17% YoY decline in revenue in that quarter, which still provided Semler with financial hedging in economic fluctuations.

Although Semler's current Market Cap is only $345 million, far below MicroStrategy, its strategy of using BTC as a reserve asset has made it regarded by investors as a "miniature version of MicroStrategy".

3. Boya Interactive

Boya Interactive is a Hong Kong-listed company mainly engaged in the game business, and is a leading developer and operator in the Chinese chess and card game industry. In the second half of last year, the company began to explore the encryption market, aiming to transform into a Web3 listed company. The company has made large-scale purchases of encryption assets such as BTC and Ethereum, invested in multiple Web3 ecological projects, and signed a subscription protocol with Pacific Waterdrip Digital Asset Fund SPC under Waterdrip Capital for strategic cooperation in the Web3 game development and BTC ecosystem. The company has stated: "Purchasing and holding Cryptocurrency is an important measure for the Group to develop and layout Web3 business, and also an important part of the Group's asset allocation strategy." As of the latest announcement, Boya Interactive holds 2641 BTC and 15,445 Ethereum, with total costs of approximately $143 million and $42.578 million respectively.

It is worth mentioning that due to the recent activity in the Cryptocurrency market, BTC and Cryptocurrency have both seen significant gains. Calculated based on the Cryptocurrency Closing Price on the 12th, Boya Interactive has a floating profit of nearly $90.22 million on BTC and approximately $7.95 million on ETH, for a total floating profit of nearly $100 million.

The continuous pump in the price of cryptocurrencies has sparked high followings in the market for related concept stocks. Taking the Hong Kong stock market as an example, as of November 12th, Bluehole Interactive has pumped 41.18%, Xinhua Technology Holdings has pumped 27.40%, and Okey Cloud Chain has pumped 11.65%, demonstrating the strong performance of blockchain-related companies. The Hong Kong stock blockchain market is still in its early stages of development, but the policy environment is continuously improving. The recently introduced policies supporting blockchain development encourage openness and innovation, creating a favorable growth space for enterprises. Some companies rely on the asset-driven effect brought by cryptocurrency price fluctuations while actively exploring the practical application of blockchain technology in gaming, finance, metaverse, and other fields. The further rise of the market in the future will depend on the effectiveness of technological implementation and the improvement of the ecosystem, providing investors with a clearer direction and confidence.

The value of Cryptocurrency held by Boyaa Interactive has reached approximately HKD 2.2 billion. This means that the total value of Cryptocurrency held by Boyaa Interactive has exceeded the current market capitalization of the company. In the second quarter of 2024, the company recorded a revenue of approximately CNY 104.8 million, a rise of 5.8% compared to the same period last year. The revenue from web games and mobile games was CNY 29 million and CNY 69 million respectively, and the appreciation income of digital assets was CNY 6.74 million. Regarding the reasons for the rise in revenue, Boyaa stated in the announcement: "Mainly due to the appreciation income of digital assets held by the Group's Cryptocurrency."

At the same time, the company plans to increase its cryptocurrency holdings by up to $100 million in the next 12 months. In addition, Boyaa Interactive has formed a team that focuses on Web3 game development and related infrastructure research and development. Benefiting from the significant rise of Cryptocurrency assets, its first-quarter earnings rose by 1,130% year-on-year, driving the company's stock price to nearly 3.6 times since the beginning of the year, becoming a typical asset-driven Block concept stock in the market. For the stock, Boyaa Interactive's performance relies on the Fluctuation of the Cryptocurrency market, and the share price may continue to be driven by the rise of asset values.

2. Mining Concept

Blockchain mining concept stocks have been highly followed by the market in recent years, especially in the fluctuation of cryptocurrency prices such as BTC. Mining companies not only benefit from the direct income of digital money, but also to some extent participate in the layout of other high-rise industries, especially in the artificial intelligence (AI) and high-performance computing (HPC) businesses. With the vigorous development of AI technology, the demand for AI computing power is rapidly increasing, bringing new support to the valuation of mining concept stocks. Especially as power contracts, data centers, and their supporting facilities are gradually in short supply, mining companies can obtain additional income by providing computing power infrastructure for AI demand.

However, we generally believe that not all mining companies can fully meet the needs of AI data centers. The Mining business prioritizes cheap power supply and often chooses locations with lower prices and short-term power instability to maximize profits. In contrast, AI data centers place more emphasis on power stability, so they are less sensitive to changes in electricity prices and tend to prefer long-term stable power supply. Therefore, not all existing power equipment and data centers of mining companies are suitable for direct transformation into AI data centers.

Mining concept stocks can be divided into the following categories:

1. Mining companies with mature AI/HPC business: These companies are not only involved in the Mining field, but also have mature AI or HPC businesses, and are supported by technology giants such as NVIDIA. For example, companies like Wulf, APLD, CIFR, not only participate in Crypto Asset Mining, but also integrate Mining and AI Computing Power demands to a certain extent by building AI Computing Power platforms and participating in AI inference, gaining more market following.
2. Focus on Mining and Coin Hoarding in Large Quantities: These companies mainly focus on the Mining business and hold a large amount of Digital Money such as BTC. CleanSpark (CLSK) is one of the representatives of such companies, with its Coin Hoarding accounting for 17.5% of the unit Market Cap. In addition, Riot Platforms (RIOT) is also a similar company, with its Coin Hoarding accounting for 21% of the unit Market Cap. These companies aim to achieve profits in the future market pump by accumulating Cryptocurrencies such as BTC.
3. Diversified business composition: These companies are not only involved in Cryptocurrency Mining and Coin Hoarding, but also have ventures in AI inference, AI data center construction, and other areas. Marathon Digital (MARA) represents this type of company, with Coin Hoarding accounting for 33% of its unit Market Cap. These companies usually mitigate risks in a single field by diversifying their business layout, while improving overall profitability.

With the increasing demand for AI, AI Computing Power and high-performance computing businesses will be increasingly combined with Blockchain Mining, which may further increase the valuation of mining companies. In the future, mining companies will not only be 'Miners' of Digital Money, but may also become important infrastructure providers behind the development of AI technology. Although this road is full of challenges, many mining companies have been accelerating the layout of AI Computing Power and data center construction to meet this trend, striving to occupy a place in this emerging field.

1、MARA Holdings (MARA)

One of the largest enterprise BTC self-mining companies in North America, established in 2010 and listed in 2011. The company is dedicated to mining cryptocurrency, focusing on the generation of blockchain ecosystem and digital assets. The company offers hosted mining solutions based on its proprietary infrastructure and intelligent mining software, mainly mining BTC. Marathon, like Riot, has experienced a 12.6% decline in stock prices, followed by further declines. However, Marathon's stock price has pumped rapidly in the past year.

According to the latest data in October, MARA (Marathon Digital) has achieved a Computing Power of 32.43 EH/s, becoming the first publicly listed mining company to reach this scale. It is expected that Computing Power will increase by about 10 EH/s after the new 152 MW power capacity is put into use. MARA recently acquired two data centers in Ohio through acquisition and is constructing a third new site, adding 152 MW of mining power capacity, with plans to be fully operational by the end of 2025. Salman Khan, CFO of MARA, stated that the cost of this asset acquisition is approximately $270,000 per MW, and it is expected that these deployments will help the company achieve its goal of 50 EH/s Computing Power by 2024.

In addition, MARA announced the sale of $700 million worth of convertible senior notes on November 18, with a maturity date of 2030. The funds raised will be mainly used to purchase BTC, buy back the notes due in 2026, and support the expansion of existing businesses. MARA expects to use the net proceeds from these notes, up to $200 million of which will be used to repurchase some of the convertible notes due in 2026, with the remaining funds used to purchase more BTC and for general corporate purposes, including working capital, strategic acquisition, expansion of existing assets, and repayment of additional debts, etc. This move further demonstrates MARA's long-term bullish attitude towards BTC.

2, **Core Scientific(CORZ)

Blockchain infrastructure and Cryptocurrency Mining services

Founded in 2017, Core Scientific Inc**.** operates primarily in two zones: equipment sales and hosting services, as well as self-operated Mining Farm for BTCMining. The company generates revenue through the sale of consumption-based contracts and provision of hosting services, while the revenue of the digital asset mining division comes from the operation of computing equipment, which processes transactions on the Block chain network and participates as part of the user pool, yielding Digital Money assets.

Recently, Microsoft (MSFT.US) announced that it will spend nearly $10 billion between 2023 and 2030 to lease servers from the artificial intelligence startup CoreWeave. CoreWeave has signed a new 120 megawatt (MW) high-performance Computing Power hosting protocol with BTC mining giant Core Scientific. Through several expansions, CoreWeave currently hosts a total of 502 MW of GPU capacity in Core Scientific's data centers. Since signing a multi-billion dollar contract with CoreWeave, Core Scientific's stock price has surged significantly, with a cumulative increase of nearly 300%. The company also plans to remodel some data centers to host CoreWeave's over 200 MW of GPUs.

This 12-year custody contract is expected to bring Core Scientific a total revenue of $8.7 billion. Meanwhile, although its BTC Mining Computing Power remains stable, its market share has declined from 3.27% in January to 2.54% in September.

Overall, Core has perfectly integrated the two hot topics of AI and Bitcoin, especially in the field of AI data centers. Core Scientific has won large contracts and actively expanded its customer base, demonstrating strong development potential. Despite a slight decline in market share for BTC Mining business, the company's progress in AI data centers provides strong support for its long-term stability and promising rise in the future.

3. Riot Platforms (RIOT)

Riot Platforms, based in Colorado, USA, focuses on the construction, support, and Digital Money Mining business of Block chain technology. Previously, the company also invested in several blockchain startups, including BTC exchange Coinsquare in Canada, but has now fully shifted its focus to Cryptocurrency Mining.

The stock price of Riot has experienced significant Fluctuation, especially when the price of BTC fell, the company's stock price once dropped by 15.8%. However, despite this, the company's stock has still pumped more than 130% in the past year.

Although the latest Favourable Information in the market has boosted the stock price by 66% in just one week, Riot's business performance is not ideal. According to its Q3 2024 financial report, the company's total revenue was $84.8 million, with BTCMining revenue accounting for $67.5 million. The net loss reached $154.4 million, with a loss per share of $0.54, far exceeding the market's expected loss per share of $0.18. In addition, Riot's loss in the second quarter was $84.4 million, while the net loss in the same period last year was only $27.4 million. Overall, Riot's losses continue to expand, although the stock price has experienced a short-term pump, whether it can achieve long-term rise in stock price remains uncertain.

4、CleanSpark(CLSK)

Green Energy Cryptocurrency Mining

CleanSpark is a company that focuses on BTC Mining using renewable energy. The company's revenue rose to $104.1 million in the second quarter of 2024, an increase of $58.6 million, or 129%, compared to $45.5 million in the same period last year. However, the net loss for the three months ended June 30, 2024, was $236.2 million, or $1.03 per share, compared to a loss of $14.1 million, or $0.12 per share, in the same period last year. It is worth mentioning that despite the recent pump in the market in early November, CleanSpark (CLSK) did not benefit from it because the company was suspended from trading during this period. The founder of the company explained that the reason for the suspension was due to an error in calculating the subscription ratio during the acquisition process. The company also announced the completion of the acquisition of GRIID, with the goal of increasing the total computing power of the Mining Farm to 400 megawatts (MW) in the coming years. At the same time, CleanSpark holds a large amount of Digital Money such as BTC. The amount of hoarded coins accounts for 17.5% of the unit Market Cap, which means that a considerable portion of its Market Cap is supported by the holdings of BTC.

From the perspective of stock trends, CleanSpark is one of the representatives of BTC miners with renewable energy as its core. With its green Mining strategy and relatively low energy costs, it has long-term development potential. The company's acquisition of GRIID and expansion of Mining Farm Computing Power indicate its positive strategic layout in expanding market share and enhancing competitiveness. However, although the company's revenue has risen significantly, investors' follow on its profitability and cash flow will be important factors influencing future stock price trends due to the large extent of its losses. With the impact of BTC price fluctuations and energy cost fluctuations, CleanSpark's stock price may experience significant fluctuations.

5, TereWulf(WULF)

Using green energy for Cryptocurrency Mining

With the drop in operational risk and the increase in profit margin, energy companies are gradually becoming an important force in the cryptocurrency industry. TeraWulf, a cryptocurrency subsidiary of Beowulf Mining Plc, recently revealed in regulatory documents that it is expected to reach a mining capacity of 800 megawatts by 2025, accounting for 10% of the current computing power of the BTC network. TeraWulf focuses on providing sustainable cryptocurrency mining solutions, especially by utilizing renewable energy sources such as hydro and solar power, while also developing AI data centers.

Recently, TeraWulf announced that it will increase the total size of its 2.75% convertible bonds to $425 million, with plans to use $118 million for stock repurchases. The financing also includes the issuance of Options, allowing initial purchasers to add an additional $75 million within 13 days after issuance. The new issuance of bonds will mature in 2030, with part of the funds to be used for stock repurchases and the remaining funds for general corporate expenses.

TeraWulf stated that it will prioritize stock repurchases and continue to promote organic growth in the high-performance computing and AI fields, as well as potential strategic acquisitions. After the announcement, TeraWulf's stock price has pumped nearly 30% since last Friday, surpassing the performance of BTC and other mining companies. Recently, mining companies have raised funds through convertible bonds and BTC-backed loans to cope with the decline in Computing Power prices after BTCHalving.

From an overall perspective, TeraWulf's layout in clean energy and AIMining demonstrates strong potential for rise. In the short term, the company may benefit from the market's high follow of green energy and AIMining. However, considering the volatility of the mining industry and the overall market environment, long-term performance still needs to be continuously followed and evaluated. Under the current situation, TeraWulf's stock price has a certain speculative factor of pump, but it is also expected to further promote rise through its sustainable development strategy.

6、Cipher Mining(CIFR)

BTC Mining Company

Cipher Mining is mainly dedicated to developing and operating BTC Mining data centers in the United States, aiming to enhance the infrastructure of the BTC network.

Recently, Cipher Mining announced further expansion of its credit cooperation with Coinbase, establishing a total of $35 million in term loans. According to the financial report disclosed on November 1, the company increased its existing $10 million credit line to $15 million and added a $35 million term loan.

In addition, with the rise of the encryption market's demand for artificial intelligence technology, the valuation of Cipher Mining's AI business has also risen. However, compared with peer companies such as CORZ, APLD, and WUFL, the pump magnitude of Cipher Mining's stock price is relatively lagging. Although the company's infrastructure investment in BTCMining has achieved certain results, the progress in AI technology layout is relatively slow, which may affect its short-term stock performance.

7、Iris Energy(IREN)

**Renewable Energy ** for BTCMining **

Focus on BTCMining globally through green energy, especially hydropower. The main business of BTCMining driven by clean energy, with environmental sustainability as its core competitiveness, which is also an important factor that distinguishes it from other Mining companies. Compared to traditional coal and oil energy sources, IR­EN adopts clean energy Mining to reduce carbon emissions and lower operating costs. IR­EN currently has multiple clean energy-driven Mining facilities, especially investing heavily in infrastructure in clean energy-rich regions such as Canada and the United States.

In addition, REN is also trying to layout in the field of Cloud Mining, but the prospects of this part of the business are not as clear as its clean energy Mining business. Although Cloud Mining as a business model can drop the demand for Mining hardware to a certain extent and provide investors with more flexible profit paths, its revenue model and market acceptance are still in the early stages, and it is still difficult to demonstrate significant profitability compared with traditional BTC Mining. Therefore, the exploration of IREN in the field of Cloud Mining can be seen more as a trial project, which is far from mature and the valuation is difficult to overestimate.

In terms of monetizing energy assets, IREN's progress and potential are currently not as good as some competitors, such as CIFR (Cipher Mining) and WULF (Stronghold Digital Mining). These companies have made some progress in the effective integration of traditional energy assets and the application of clean energy, and have stronger market competitiveness. Although IREN's unique advantages in the green energy mining field cannot be ignored, compared with CIFR and WULF, its monetization process is still lagging behind, making it difficult to generate sufficient capital inflows in the short term.

8、Hut 8(HUT)

Hut 8, headquartered in Canada, is a company that primarily operates Cryptocurrency Mining business in North America and is one of the largest innovative digital asset Miners in North America. The company operates large-scale energy infrastructure and always adheres to environmentally friendly operations.

In 2023, Hut 8's annual revenue reached $121.21 million, a rise of 47.53% compared to the previous year. By the quarter ending September 30, 2024, revenue further rose to $43.74 million, a rise of 101.52% compared to the previous year. This increase brought the total revenue for the past 12 months to $194.02 million, with an annual rise rate of 209.07%.

According to the third quarter report, Hut 8 accelerated the pace of building digital infrastructure platform in the past few months and promoted its commercialization process. All the company's data show a strong rise momentum and continuously strengthen its business development.

9、Bitfarms(BITF)

Headquartered in Canada, Bitfarms focuses on the development and operation of BTC Mining Farm, and continues to expand its mining scale. The company recently announced plans to upgrade the originally planned 18,853 Antminer T21 BTC Mining Rig from Bitmain to the S21 Pro model with an additional investment of $33.2 million. According to the third-quarter financial report, Bitfarms has modified the procurement protocol with Bitmain, and the upgraded Mining Rig is expected to be delivered from December 2024 to January 2025. According to analysis by TheMinerMag, thanks to the use of the latest generation of Mining Rig, Bitfarms' Mining Rig costs have significantly dropped: from $40.6 per PH/s in the first quarter to $35.5 in the second quarter, and further dropped to $29.3 in the latest quarter.

Overall, Bitfarms has demonstrated strong potential for rise by lowering costs while improving mining efficiency through updating Mining Rig equipment and optimizing procurement strategies. This strategy not only enhances the company's profitability but also strengthens its position in the competitive Crypto Assets market. With further drop in Mining Rig costs, Bitfarms is expected to continue to gain advantages in the BTC Mining field, especially in the case of BTC price rise or market demand rise. 01928374656574839201

10, HIVE Digital Technologies (HIVE)

CryptocurrencyMining company, hpc business.

Hive Digital recently announced the acquisition of 6,500 Canaan Avalon A1566BTC Mining Rigs and plans to increase the total computing power to 1.2 EH/s. This move demonstrates the company's continued investment in the field of Cryptocurrency Mining. However, since the end of last year, Hive Digital has explicitly stated that it will shift more resources and focus to High-Performance Computing (HPC). The company believes that HPC business has higher profit margins compared to BTC Mining and has certain technological barriers, which can bring more sustainable income to the company. Therefore, Hive will transform the 38,000 Nvidia data center GPU cards originally used for Ethereum and other Cryptocurrency Mining into on-demand GPU cloud services, opening up a new chapter in its AI and HPC field.

This strategic transformation is in line with the industry's development trend. Similar to other mining companies such as Hut 8, Hive quickly shifted its focus to HPC and AI business after Ethereum transitioned from POW to POS. Today, Hive's HPC and AI business can generate income 15 times higher than Bitcoin Mining, while the demand for GPU computing is rising rapidly. According to Goldman Sachs' report, the future of the GPU cloud service market is broad. Fortune Business Insights predicts that the GPU service market in North America will rise at a compound annual rise rate of 34% by 2030. Especially with the continuous increase in demand for AI projects, the large language model technology behind ChatGPT is just beginning, and almost all enterprises need a large amount of GPU computing power to support the operation and development of these technologies.

From an investment perspective, Hive Digital's transformation strategy has laid a solid foundation for its future rise. Despite the company's layout in the Crypto Assets Mining field, with the rapid development of HPC and AI businesses, Hive has gradually freed itself from over-reliance on traditional Bitcoin Mining, opening up more diversified and highly profitable revenue channels.

Three, Infrastructure and Solution Providers

Mining Rig manufacturing/Blockchain infrastructure concept stocks refer to companies that focus on BTC Mining hardware, Blockchain infrastructure construction, and related technical services. These companies primarily profit from designing, manufacturing, and selling specialized Mining equipment (such as ASIC Mining Rig), providing cloud Mining services, and operating the hardware infrastructure required for Blockchain networks. Mining Rig manufacturers are the core of Blockchain infrastructure as they provide hardware devices for Cryptocurrency Mining, such as BTC. ASIC (Application-Specific Integrated Circuit) Mining Rig is the most common type of Mining Rig specifically designed for Cryptocurrency Mining. The revenue of Mining Rig manufacturers mainly comes from two sources: Mining Rig sales and Mining Rig hosting and cloud Mining services.

Generally speaking, the price of Mining Rigs is influenced by various factors, including the fluctuation of the BTC market, the cost of Mining Rig production, and the stability of the supply chain. For example, when the BTC price pumps, miners' earnings also increase, and the demand for Mining Rigs usually pumps as well, thereby driving up the revenue of Mining Rig manufacturers. In addition to Mining Rig production, the blockchain infrastructure also includes Mining Pools, data centers, and other cloud service platforms that provide computing power support.

For investors, Mining Rig manufacturers and Blockchain infrastructure companies may offer higher growth opportunities, especially when the Cryptocurrency market is in a rising cycle. The demand for Mining Rigs is positively correlated with the BTC price. However, these companies also face high volatility risks, influenced by multiple factors such as market sentiment, technological innovation, and regulatory policies. Therefore, when investing in such concept stocks, besides having a positive outlook on the Cryptocurrency market, it is also necessary to consider the potential risks brought by market uncertainties.

1. Gate.io (CAN)

Block Chain hardware product development

Established in 2013, Canaan Technology released the world's first blockchain computing device based on ASIC chips, leading the industry into the ASIC era and gradually accumulating rich experience in chip production. In 2016, the mass production of 16nm products marked Canaan Technology as the first company in the mainland China to adopt advanced processes. Since 2018, Canaan Technology has successively achieved the world's first mass production of self-developed 7nm chips, as well as the mass production of the self-developed commercial edge AI chip Kendryte K210 based on RISC-V.

Since its establishment, Canaan Technology has become an important player in the blockchain hardware field with its leading ASIC Mining Rig technology and self-developed chips. Compared with other Mining Rig manufacturers, CAN and BT-DR, which can increase Mining profits with self-produced Mining Rig, have more potential favorable information. In the past year, despite the Bear Market, Canaan Technology's Mining Rig sales have remained at a high level, especially against the backdrop of BTC price rebound, and future sales are expected to rise significantly.

The biggest potential Favourable Information factor is the change in Mining Rig prices. If Mining Rig prices pump - for example, due to demand exceeding expectations or supply constraints - the pump in Mining Rig prices may drive up the valuation multiples of mining companies, thus forming a 'Davis double-click' effect, boosting the overall valuation of the company. CAN has recently signed two important institutional orders, with HI­VE purchasing 6,500 units of Avalon A1566 Mining Rig, which will further drive up its sales and revenue, rise, and also demonstrate market recognition and demand for its Mining Rig. From the fundamentals and market expectations of Canaan, the current stock price does not fully reflect its future potential. Assuming the BTC market warms up and Mining Rig prices remain stable or pump, Canaan's sales revenue and profits will experience a significant rise, further driving valuation upwards.

2、Bitdeer(BTDR)

Provides cloud mining services and manufactures Mining Rigs

Bitdeer provides global CryptoMining Computing Power, allowing users to lease computing resources for BTCMining. The company offers Computing Power sharing solutions, including Cloud Mining and Computing Power market, while providing a one-stop Mining Rig hosting service covering deployment, maintenance, and management to support efficient CryptoMining.

Recently, Bitdeer has released its new generation water-cooled Mining Rig SEALMINER A2, which is the second generation product of the SEALMINER series. The SEALMINER A2 Mining Rig is equipped with the second-generation chip SEAL02 independently developed by Bitdeer. Compared with the A1 series, the A2 has achieved significant improvements in energy efficiency, technical performance, and stability. The A2 series includes two models: the air-cooled SEALMINER A2 and the water-cooled SEALMINER A2 Hydro, aiming to meet the mining needs in different environments. Both Mining Rigs adopt advanced heat dissipation technology, optimize power consumption control and computing power performance, ensuring stable operation under high load. According to test data, the energy efficiency of A2 is 16.5 J/TH, and the computing power reaches 226 TH/s, slightly lower than mainstream Mining Rigs on the market such as Bitmain and MicroBT, which have an energy efficiency of 13.5 J/TH. The company also stated that A2 has entered mass production stage and is expected to increase 3.4 EH/s of computing power by early 2025. Bitdeer also plans to complete the tapeout design of the SEAL03 chip in the fourth quarter, with a target energy efficiency of 10 J/TH.

Overall, Bitdeer is at a key period of innovation and rise, especially in the field of water-cooled Mining Rig and Computing Power sharing. It is worth noting that as a cloud mining platform, it provides Computing Power leasing and hosting services, rather than just traditional Mining Rig sales. Unlike traditional Mining Rig manufacturers, cloud mining and hosting companies are more flexible in capital and resource allocation, and can expand market share by providing on-demand computing resources to meet the investment needs of different scales. Therefore, although the overall trend of the Cryptocurrency market may affect Bitdeer's performance, the diversity and innovation of its business model may help it maintain relative stability in market Fluctuation.

3, BitFuFu(FUFU)

Cloud mining services and digital asset management services

BitFuFu is a BTCMining and cloud mining company supported by Bitmain, dedicated to providing cloud mining services to global users, allowing users to participate in BTCMining without purchasing hardware. According to the latest third-quarter financial report, BitFuFu holds approximately $104 million in digital assets, equivalent to 1600 BTC. 340 BTC belongs to the company, while the rest of the BTC belongs to cloud mining and hosting service customers. BitFuFu is not only a service provider in the BTCMining field but also an important BTC asset manager.

In addition, BitFuFu has reached a two-year credit protocol with Antpool, a subsidiary of Bitmain, with a maximum loan amount of $100 million. This credit protocol further consolidates the cooperation between BitFuFu and Antpool, and enhances its flexibility in capital operation. With the Fluctuation of the BTC market, an increasing number of BTC mining companies (such as MARA and CleanSpark) are also beginning to adopt financing methods such as BTC mortgage loans, flexibly using their BTC assets to support business development and capital expansion.

From an investment perspective, BitFuFu has the support of Bit Mainland and Ant Mining Pool, giving it a unique advantage in hardware supply and Computing Power resources, enabling it to provide efficient and stable Mining Rig equipment for BitFuFu, and helping optimize Mining Farm operations and Mining Pool support. Therefore, BitFuFu has a clear technological and resource advantage in the cloud mining field, which can attract more users and capital to enter.

Overall, with the gradual recovery of the BTC market and the increasing demand for cloud Mining, BitFuFu may benefit from this trend. Compared to traditional Mining companies, cloud Mining allows investors to participate in BTC Mining at a lower cost, especially suitable for users without hardware resources.

Four, Concept of exchange:

1、Coinbase (COIN)

**Cryptocurrency trading platform, trading and storage services for Digital Money

Coinbase was founded in 2012 and went public on Nasdaq in 2021, making it the first and only legally compliant listed cryptocurrency exchange in the United States. This position has made it the largest cryptocurrency exchange in terms of volume in the United States, and has also attracted many institutions to choose it as their preferred platform for storing encrypted assets. Coinbase has partnered with Circle to issue the USD-pegged stablecoin USDC, and has expanded its services to include stake custody and other diversified businesses. In addition, Coinbase is a core holding of ARK Invest fund manager Cathie Wood, who has publicly expressed her optimism about it several times.

The trend of Coinbase's stock price is highly correlated with BTC. For example, its historical high point appeared on November 8, 2021, almost coinciding with BTC's historical high point on November 10, 2021. And at the recent low point on November 21, 2022, the stock price hit bottom synchronously with BTC's price. From the high point of $368.9 in 2021 to the low point of $40.61, the stock price has experienced a maximum decline of 89%, even exceeding the 78% decline of BTC during the same period, reflecting the amplified leverage effect of Coinbase in the crypto market.

In the past six months, the fluctuation of Coinbase's stock price has been mainly affected by regulatory pressure and the approval process of the BTCETF. In 2023, the approval of BTCETF was initially considered a major favourable information, but the market subsequently worried that such products might have a diversion effect on Coinbase's traditional business model, causing the stock price to fall. Nevertheless, the market dynamics after the election brought Favourable Information to Coinbase.

With Trump winning the election, the market confidence is enhanced by its cryptocurrency-friendly policies, driving the rapid pump of Coinbase stock price. The stock price briefly dipped to $185 in the early stages of the election, but eventually soared to around $329. It can be expected that the BTC investment demand of ordinary investors in the relatively closed Compliance encryption market in the United States will continue to benefit Coinbase. As the leading enterprise of legal exchanges in the United States, Coinbase has a relatively solid foundation and its highly compliant identity gives it a greater advantage in policy Favourable Information. In the future, with more ordinary investors entering the market, Coinbase may attract large-scale traffic.

2、Bakkt Holdings(BKKT)

Bakkt is a leading cryptocurrency platform dedicated to providing compliance-driven encryption asset custody and trading services for institutional investors. The company holds an encryption asset custody license issued by the New York State Department of Financial Services (NYDFS). Due to recent security incidents at multiple encryption asset custody platforms, Bakkt has gained trust, especially among institutional clients, thanks to its compliance and strong regulatory background.

Bakkt was originally founded by Intercontinental Exchange (ICE) and later spun off into an independent publicly traded company, demonstrating the integration between TradFi and crypto assets. Recently, Bakkt's stock price has experienced significant pump, mainly due to the full acquisition plan of Bakkt by DJT, a media and technology group under Trump. According to the Financial Times, Trump's company DJT is in deep acquisition negotiations with Bakkt. If the acquisition plan is successful, it will further advance Trump's layout in the cryptocurrency market and provide Bakkt with financial support and more development opportunities.

On the day of the announcement, Bakkt's stock price soared by 162%, and continued to pump by over 15% in after-hours trading. DJT's stock price also rose by approximately 16.7%. In addition, Bakkt's market cap prior to the acquisition was slightly above $150 million, a valuation based on the company's financial performance and the fluctuation of the crypto market in the past period. Despite Bakkt's revenue not meeting expectations (with revenue of $328,000 and operating losses of $27,000 for the three months ending September 30).

From an investment perspective, Bakkt is a company with huge potential but still facing challenges. First, Bakkt has unique advantages in compliance and institutional services, especially in the trend of institutional investors gradually entering the market. Secondly, Bakkt's stock price has recently pumped significantly, mainly benefiting from the acquisition intention of the Trump Group. This acquisition will provide Bakkt with more funds and resources, potentially accelerating its development in the field of Cryptocurrency trading. However, Bakkt's past profitability performance has been poor, and its main revenue comes from encryption asset custody and trading services, and the rise potential of these businesses is still uncertain. Therefore, when investing in Bakkt, it is necessary to consider the sustainability of its profit model and the intensity of market competition.

5. Payment Concepts:

Block (SQ)

Founded in 2009 as a payment service provider, formerly known as Square Inc. As early as 2014, Square started accepting Bitcoin (BTC) as a payment method. Since 2018, Square has been active in the BTC field. Starting from 2020, Block has been purchasing a large amount of BTC for payment services and as company asset reserves. In the third quarter of the fiscal year 2024, Block's total net revenue reached $5.976 billion, achieving a steady rise of 6% compared to the same period last year's $5.617 billion. If BTC-related revenue is excluded, the total net revenue rises to $3.55 billion, a year-on-year rise of 11%. Net profit increased from a net loss of $93.5 million in the same period last year to a profit of $281 million, a year-on-year rise of 402.1%.

As a concept stock for payments, followBlock can also follow paypal. As we all know, PayPal, as a global payment giant, provides digital payment services to global merchants and consumers. In recent years, they have also shown strong interest in blockchain technology, with representative initiatives including the launch of Stable Coin PayPal USD (PYUSD) in 2023. This is a Stable Coin based on the ETH block and backed by the US dollar, which is one of PayPal's core strategies in the integration of digital payments and blockchain. PayPal also made its first blockchain investment using PYUSD, supporting Mesh, a company focused on digital asset transfer and embedded financial platforms.

On the contrary, Block's focus in the blockchain field is more concentrated on BTC, integrating it into payment services and company asset reserves.

Summary:

The demand for Block chain concept stocks is rising rapidly, and may even surpass the demand for traditional technology stocks and Crypto Assets themselves. As Block chain gradually expands from the early application of Crypto Assets to a wider range of industry solutions, the market's demand for related technologies and infrastructure has also increased significantly. Compared with traditional technology stocks, the rising potential of Block chain concept stocks is more prominent, because they rely not only on continuous technological innovation, but also closely related to the digital transformation of the global financial market and the Decentralization trend.

With the maturity of Block chain technology and the optimization of the policy environment, the market prospects of Block chain concept stocks will become more and more clear. Especially in the context of the gradual clarification of the regulatory policies of encryption assets by governments around the world, Block chain enterprises are expected to experience explosive growth on the basis of Compliance. We look forward to more traditional industries adopting Block chain technology, promoting further technological innovation and market demand in this field.