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A Great Migration: The Ultimate Guide To Public Bitcoin Mining Companies In North America (Part One)

Summary

Bitcoin mining is moving from China to North America.

China is gifting a $6 billion a year industry to North American.

Need to find 1.5 gigawatts of electrical capacity - won't be easy.

For the last 40 years, North American industries have flocked to China—now a multi-billion-dollar industry is moving from China to North America.

It’s cryptocurrency “mining”—a $US 6 billion industry. 

Why are the miners leaving China? In a move last October, the Chinese government banned ALL forms of cryptocurrency, including China.

Just last week, the Chinese government update their great Internet firewall to block all overseas crypto-exchanges.

For Chinese miners, the writing is on the wall. They are no longer being given access to cheap electricity and they can’t unload the Bitcoin they mine in mainland China.

They need to move, and the country they want to move to is Canada. And Canadian miners are prepared to welcome their equipment and expertise, not to mention to pick up the slack that the Great Migration is causing.

What does this Great Migration entail? Well China currently mines more that 60% of the world’s Bitcoin.

About 1.5 gigawatt of electricity is needed to mine that much Bitcoin. More than one million mining rigs (computer servers) are needed to mine that much Bitcoin.

And the Chinese government doesn’t want them in China anywhere. They have to go.

Tens of millions of dollars have been raised by public companies in Canada in the last few months to get ready for this Great Migration.

But it won’t be simple or easy. Finding local Canadian partners, organizing locations, power supply, getting municipal permits…will all take a lot of time, money, patience and expertise. And there will likely be some need for cultural understanding between east and west.

As I follow this Great Migration, I’ll tell you who the early leaders and winners are, and how they’re making it all happen. Early investors with a basic understanding of The Great Migration have an opportunity to get in on the ground floor.

The math is very simple. At present there are 1800 Bitcoin mined every day. With a Bitcoin price of US $8500, that’s US $15.3 million a day or US $5.85 billion a year.

That’s doesn’t include mining from other coins such as Bitcoin Cash or Ethereum. Nor does it include transactions fees. Finally, we have not even included any possible revenue from other private blockchain initiatives that may roll out in the next couple of years.

It’s important for investors—and the general public—to understand this Great Migration will be done with great transparency, following all local laws etc…that’s the only way The Big Money (brokerage firms, private equity, institutional money) can fund and help grow this industry.

Over the last few years, many private fortunes have been made speculating in cryptocurrency. Now it is time for the public markets to take over.

The Great Migration is All About Cheap Electricity

There is no doubt this billion-dollar industry is coming to North America, specifically Canada. Canada has megawatts of excess power, both hydroelectric and natural gas.

Just one example: Canadian natural gas prices went negative—below zero—several days last summer.  Overall, the entire Canadian natgas industry will not be profitable this year, with prices so low . Electricity prices across North America have been dropping for years. 

Cryptocurrency miners are looking to leave mainland China and partner with Canadian natural gas producers—Its a natural fit.

Rob Colcleugh, CEO of Iron Bridge (IBR-TSXv) is just one of many Canadian power producers who have been talking to Chinese mining refugees;

What we quickly realized when we were starting to source some equipment was a bunch of the miners, the large guys from China in particular, are actually looking to move out of China. Obviously from a political standpoint, it's not ... they're getting their thumb pushed down on them a bit. They're looking for pretty material opportunities where they can site some of their own mines over here.

            They're looking to have somebody host thousands and thousands of mining rigs at any particular time and they are knocking on doors. The group I just met with had already knocked on a couple larger companies' doors. The interesting thing is they just aren't getting anywhere on the larger oil and gas front.

            That's, I think, a function of despite the fact that's 100 megawatt facility, it's a massive facility from a mining work perspective…

Rob Colcleugh, CEO of Iron Bridge

It important to understand that this Great Migration is happening NOW. This Tuesday, the first of the Canadian bitcoin mining companies is going public and I will tell you all about that company on its first day of trading.

In the year of the dog, Canada is being gifted a billion-dollar industry courtesy of China.

Ross

P.S. After Tuesday’s announcement, I will continue with this series. In my next article we look at sheer size of the Bitcoin mining industry and why it has no choice but to move to Canada.