For a long time, bitcoin has been compared to gold. Perhaps this comparison is rooted in the fact that bitcoin can be “mined” and can be used as a store of value. Perhaps it’s because it’s a commodity asset as well as a potential transaction token, or a safe haven for risk-off sentiment. Whatever is at the root of the comparison, chances are it will remain in place for the foreseeable future.
The big news at the space this week, and as relates to this comparison, is that a large gold mining company has pivoted its operations to focus on bitcoin mining – from one store value to another.
The company in question, Leeta Gold Corp, just changed its name to Hive Blockchain Technologies Inc. and has registered a new ticker, HIVE, with the NASDAQ, switching from the previous PRELF.
Many reading might already be familiar with Hive. The company is a spinoff of Genesis Mining, the bitcoin mining incumbent, with the latter owning a 30% stake in the former and providing much of the seed capital required to get things off the ground.
The guy behind the move is called Frank Giustra and he’s a pretty well-known guy in the public company space in the US. Among others, he was the founder of Goldcorp Inc. and Lions Gate Entertainment Corp.
So why is this important?
Well, traders and investors are looking to pick up an exposure to bitcoin but there remains a barrier to entry in terms of technological know-how and a risk of storage security.
As such, these individuals are looking for alternative exposures, with publicly traded entities preferential. There aren’t many publicly traded companies that can offer an investor exposure to bitcoin without actually having to find the underlying asset right now, and some of those that claim to do this are not particularly reputable and have very tenuous links to the sector as a whole.
With Hive, this is not the case.
The company is associated with an already well-established entity in cryptocurrency (Genesis) and is led by Guistra, making it one of the safest alternative exposures available on the market today.
We’ll keep an eye out for any developments going forward.
Image courtesy of Bobo Boom via Flickr