If QNC Can Reach $2.00, MATE Could Certainly Reach $5.00

 

We have written extensively about Blockmate Ventures Inc. (MATE.V)(MATEF) over the last several weeks. Since first mentioning it on November 13, the stock has ran an impressive 313%. However, Quantum eMotion Corp. (QNC.V)(QNCCF) leaves that performance in the dust as it has raced over $2.00 from less than $0.20 during that time. We find that very bullish for MATE, as it proves that we are in a market where TSXV stocks run heavily on hype. If QNC can run to $2.00, MATE certainly could reach our $5.00 target sooner than later. MATE has a much better upside than QNC right now, so MATE shareholders should be excited. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1022 followers on here as well as 121 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers. 

We have no opinion for or against QNC and wish traders or investors in that stock the best. However, here are the facts:

1. QNC is now trading above a $300 million market cap.

2. There are many quantum stocks and private companies with similar types of IP out there. QNC will face competition.

3. QNC doesn't have any revenue yet, though it promises commercialization soon. 

Let's compare this to MATE. QNC promises a lot of good things to come. MATE is doing the same, except also has Hivello out in the market today with active users generating DePIN tokens for themselves and the platform through the revenue sharing program. MATE isn't all just 100% promises, partnerships and promises of future partnerships. It has a product out there that investors can test for themselves. QNC does not. Quantum computing and random number generation for cybersecurity is a technologically complex business to understand. Right now shareholders are reliant fully on the word of management about the viability of QNC's future products in the market and how they stack up to competitors. It's a risk that MATE simply does not have. Domenic Carosa is busy pushing Hivello, but ultimately the users and investors will try it out for themselves. In fact, he wants them to try it out. There is no mechanism for the technologically illiterate QNC investor to understand QNC the way MATE investors can understand Hivello, even if QNC management was very willing and open to try to do so. 

This idea of competition is important. For QNC to thrive, it will have to prove that its QNRG model is superior to others out there. Its business model is to receive money in exchange for a product or service, like most business models. The business model of MATE in our eyes is superior and unique. For the simple fact that users make money off the platform. It's not even like a Facebook model, where you and your data are the products, and people can get sensitive about that. Hivello is asking for computing power. Not for money. Not for your data. This changes the idea of what competition is. Hivello is competing for computing power, but there is nothing stopping someone who is profitable on mining DePIN from merely buying more computing power. As long as Hivello's business model proves to have positive ROI after purchases of equipment, there is nothing stopping anyone from using Hivello alongside any number of DePIN opportunities out there. 

But let's say an investor was worried about competition, we would encourage people to review this post. A crypto bro doing his research on DePIN found that Hivello was the second highest earner out of 15 DePIN options out there. And that's in the early stages of the platform where most users are earning around $1.00 a month with the Hivello token (the bulk of the promised earnings power for low end equipment) not yet released. Hivello, rather than being a DePIN itself, is a DePIN aggregation platform. That enables regular people who aren't really into crypto mining to earn a truly passive income as Hivello manages to optimize your earnings power based on your computing resources. As opposed to you setting up nodes on individual DePINs and managing it all yourself. A snapshot of our own test case on a ten year old laptop shows earnings from three different coins, though the majority is in filecoin: 

 

Our electricity bill for December was actually lower than it was for November. Lots of variables in that, but at least that shows the power usage for the laptop while in sleep mode using Hivello is negligible. If this is a profitable venture for us using absolutely no effort and making no investment, imagine what it can be for people who do make that little bit of effort and investment.

QNC is currently valued at over a $300 million market cap. Is that expensive? Who knows. Quantum stocks in the United States are trading well above a billion dollars in valuation and have ran more than QNC has. But what we do know is that relative to QNC, MATE is extremely cheap. It has a superior business model that is more immune to competition. Both stocks could be categorized as speculative start ups, but MATE has something currently out in the market generating early stage revenue. That means its risk profile is superior to QNC. Then we have the fact that QNC has 166 million shares outstanding. Similar to, but larger than, MATE's 129 million shares outstanding. If QNC can run from $0.10 to $2.00, so can MATE. The float is not too large. 

The one area where QNC has the advantage is sector hype. The name, the Q-starting symbol, the business model, is all tied strongly to quantum. This makes it easy to ride the wave with Quantum Computing Inc. (QUBT), Quantum Corporation (QMCO), Rigetti Computing, Inc. (RGTI) and the rest. This is a double-edged sword though. If those stocks see a decline in hype, so will QNC. MATE is loosely tied with Bitcoin and other crypto investments out there. However, as a DePIN aggregator, MATE is carving its own path. This can be frustrating for shareholders like us who are seeing "only" a four-bagger so far, as MATE is somewhat overlooked. But that also provides some cushion against a drop in crypto as MATE's business model is much more robust in a crypto bear market. As a DePIN aggregator, if one DePIN becomes less valuable to mine, Hivello will simply jump to one that is more robust. Volatile prices prove out the importance of Hivello. 

Given all this, QNC's rise in valuation is good news for MATE shareholders. It shows that while we view a $5 target on MATE as a long term, there is living proof in QNC that it can run on the right amount of hype well before the level of execution justifies it. With the full launch of Hivello and the token expected this quarter, there are no shortage of positive catalysts to take place that can hype the stock. With lots of QNC profits around, looking for the next big thing to jump into. 

Disclosure: We are long MATE.V

Edit: Less than an hour after we posted this, QNC tanked. One of its partners claimed that QNC's technology failed. This is exactly what we meant when we said that MATE has a superior risk profile. Investors of QNC rely solely on company statements that the technology is good. MATE investors do not. They can download Hivello for themselves and see how it works. Someone claiming that Hivello doesn't work won't cause the stock to drop 50% because enough people out there know that it does work. People understand right now that it's in beta release and most people are earning just a few pennies, but earning nonetheless. No one is hyping it up beyond what it is truly able to provide today, but see a clear path to a bright future. 

Consider the Dip on MATE a Buying Opportunity as the Tony G Story is just Getting Started

We have written extensively about Blockmate Ventures Inc. (MATE.V)(MATEF) over the last month. Today's post is meant to be a short blog. Review our previous write ups if you're not already familiar with the opportunity. We are not worried about the drop seen today, in fact we consider it a buying opportunity for those who don't yet have a position. This trading is reminiscent to trading on QNC on December 12 before it took off to the next level. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1020 followers on here as well as 120 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers. 

14 million shares is an oddly specific number for Tony G to buy. Why not 10 million? Why not 20 million? It makes a lot more sense when you consider Canada's rules on insider buying and reporting in the context of MATE's share count. 14 million shares represents 11% of the company's 125 million shares outstanding. This is just above the reporting threshold of 10% ownership before one is considered an insider. He could have bought 10 million shares and avoided any reporting requirement. He clearly wanted to be considered an insider with reporting duties. Likely driven by a goal of transparency and knowing that reporting of his ownership stake would be seen as a bullish sign by traders. 

At the same time, the 11% stake also affords him the opportunity to buy on the open market, as the ownership limit before someone must be considered a control person is 20%. Should he be interested in doing so, he can easily buy up any supply overhang from flippers and day traders and send the stock rocketing. Reporting of any open market buys would further increase buying pressure, as people realize he is willing to buy at higher levels as well as at $0.10. We can't say for certain what he is thinking or how large of a position he wants. Or if he will buy any on the open market. While we are optimistic that such a scenario can happen, we think investors should consider it a bonus to the investment thesis, rather than a central theme to it. MATE is cheap here with or without Tony G. His involvement means that the level at which MATE should no longer be considered cheap or a strong buy has substantially increased. 

While his investment has provided an immediate boost to the stock, the business will also be positively impacted. As an investor, he now becomes an ambassador for Hivello. People who respect what he has done with Sol Strategies will now look at Hivello's business model with greater interest and trust. The more people who try out and earn money on Hivello, the more profitable it will be. Also, the more likely it will reach and surpass a critical mass to becoming viral. Tony G is akin to a celebrity endorsement in the crypto space. But instead of paying for the celebrity endorsement like so many brands do, Tony G is paying MATE money for shares in the company. That's the best type of endorsement any business can get. It's looking more and more likely in these very early stages that Hivello will be a success.  

In the meantime, look for an official SEDI filing of his 14 million shares to be the next positive catalyst to drive the stock upwards. 

Disclosure: We are long MATE.V

Tony G's Investment into Blockmate is a Game Changer

We have written extensively about Blockmate Ventures Inc. (MATE.V)(MATEF) over the last month. Today readers were massively rewarded as the stock nearly doubled to $0.285 in Canada with no end to this run in sight. If you are new to this story, read our previous report that goes into details about the fundamentals, near-term positive catalysts and speculative upside of MATE and Hivello:

https://value-trades.blogspot.com/2024/12/blockmate-unambiguously-undervalued-crypto-stock.html

The stock is no longer trading below $0.20 so it's no longer trading below the value of its stake in Hivello. However, the news today justifies it. New investors to the story can look at a $0.285 stock price and say they are paying just above the value of the Hivello stake in exchange for any new blue sky potential that this deal will bring, within or outside of Hivello. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1017 followers on here as well as 120 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers. 

In our previous report, we left some room for share dilution along the way to our eventual $5.00 target, assuming 200 million shares outstanding for warrant exercises and further financings. A financing came sooner than we expected, but in a very desirable way. Instead of the usual broker private placements where paper is blown out to the market once the four month hold expires, Blockmate received a strategic investment from Antanas Guoga, aka Tony G. It's a $1.4 million investment in the form of 14 million shares, with 10 million of those shares in a one year lockup. This investment comes with warrants at a strike price of $0.50. Which would be another $7 million into the company's bank upon exercise. This really shores up MATE's books for the foreseeable future. In addition to that, the $0.50 strike price foretells where Tony G thinks this stock will go. To be able to exercise 14 million warrants profitably, the stock has to be significantly above $0.50 and heavily traded. 

Tony G is the Chairman and major shareholder of Sol Strategies Inc. (CYFRF)(HODL.CN), where he has led the stock to a 20x winner since September thanks to it becoming the "Microstrategy of Solana". When you understand the business model of HODL, his interest in Hivello makes sense. Hivello could be seen as the "Sol Strategies of DePIN", with an ability to aggregate multiple DePIN nodes under one platform. The added benefit being that users of Hivello can make money alongside investors in the stock. While HODL attracts the interest of crypto and finance bros who understand the business strategy, Hivello is unique in that it has potential to become mainstream like YouTube content creation. It's a potential source of passive income for regular people, because regular people are the ones who own the nodes aka the decentralized physical infrastructure. There is also the simple rocket ship explanation which is - Tony G might not be done buying. He easily has enough resources to do significant open market buying should he choose to do so. Burn shorts burn (somehow MATE has accumulated over a million shares in short interest). 

That leads us into our next point. The news release stated:

"Blockmate’s primary asset, its controlling stake in Hivello Holdings Ltd, has been able to source capital independently since December 2023, so this new capital will assist in launching Blockmate’s subsequent companies."

MATE doesn't need the cash as Hivello finds its own capital. MATE plans to use the cash to invest in other opportunities. What will those be under Tony G's guidance? A similar business model to Sol's? This is why the idea that MATE is now trading above the NAV of its holding in Hivello is not at all a missed opportunity. MATE will transition from essentially a one business entity into a holding company with multiple operations. It's not just about Hivello anymore. We look forward to what MATE has in store for shareholders given this game-changing strategic investment. Our $0.50 target looks achievable any day now and the $5.00 target went from long-term pipedream to something with a substantially greater than 0% chance to be achieved within a year. 

A final point - all this talk and we didn't even mention Hivello's partnership with Swarm announced today. The management team running Hivello is 100% dead serious in making this project a success.

Disclosure: We are long MATE.V

Blockmate: Unambiguously Undervalued Crypto Stock With Unicorn Potential Through Hivello

 

Since our first write up on Blockmate Ventures Inc. (MATE.V)(MATEF) about a month ago, the stock has performed fairly well, increasing nearly 50% from $0.075 to $0.11 in Canada. However, we think this is a drop in the bucket compared to its potential both in the near term based on fundamental value and long term upon successful execution of the Hivello business model. The stock reached as high as $0.165, but has mostly bounced around the $0.10 to $0.12 mark. Shares have churned and we think the temporarily stalled price is due to in-the-money warrants being exercised. While frustrating for short term sentiment, in the long term this means little and we think presents a last-minute buying opportunity before the train leaves the station. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1017 followers on here as well as 120 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.

We are not going  to rehash every little detail about Blockmate and Hivello, so we recommend you read these three posts as primers if you haven't already:

https://value-trades.blogspot.com/2024/11/the-cheapest-crypto-stock-you-never-heard-of.html

https://value-trades.blogspot.com/2024/11/if-you-like-bluesky-you-should-absolutely-love-blockmate.html

https://value-trades.blogspot.com/2024/11/blockmate-hivello-is-billion-dollar-idea.html

Recent insider filings have shown evidence of in-the-money derivatives being exercised, as one insider has exercised his options then sold the shares on the open market. The CFO is the lone seller and is described on the company website as holding officer positions in a number of companies. His decisions have little to do with how he feels about the individual company's future, since his time is split between many and is likely focused on CFO line of duties such as the current state of the books. Rather than growth potential of the business. As the CFO, he may have been influenced by the desire to increase the company's cash balance while simultaneously improving his own financial situation. So in our view, it's much more good news than bad. Neither CEO Justin Rosenberg nor President and "face" of the company Domenic Carosa have sold any shares. Carosa's last activity was a wave of open market buying six months ago at 3-4 cents. This open market buying is a very good signal for buyers, though it remains to be seen if he would do it at prices that are three times higher. If he did, we would consider that to be a surprise bullish catalyst. He already owns approximately 20 million shares, warrants and options. He owns enough. 

Now with the commentary about insider activity out of the way, we want to focus next on the near term fundamental value. Despite the move over the last month, Blockmate is still unambiguously undervalued compared to its stake in Hivello. Hivello is undertaking a $3.5 million raise at a $30 million U.S. valuation. Blockmate owns slightly over half of Hivello. The value of that holding translates to a little over $0.20 CAD per share while the stock trades barely over half of that. Even considering dilution from all 34.5 million warrants, MATE's per share value of its Hivello holding plus $2.6 million in cash from the warrants would be $0.18. We think that the closing of the financing would be the bullish catalyst needed to at least bring it up to the $0.20 level. TSXV investment holding companies tend to trade below their NAV, but that is usually due to them holding some illiquid mining and exploration stocks. Stocks like MicroStrategy (MSTR) demonstrate that crypto stocks can often trade at a premium to their crypto holdings. Although the Hivello coin won't be owned by Blockmate or its Hivello subsidiary, it will be used as currency to drive user growth and value to the Hivello platform. So we expect the valuation of the token and the platform to be linked and highly correlated. 

The token's success will be driven by hype and usage of Hivello, which will in turn drive users to the platform as an increasing token price increases compensation. For those reading this who don't yet know, Hivello is a DePIN aggregation tool that allows users to share their computing power and resources for things like storage, VPN services or improving AI models. DePIN tokens are the method for which to compensate users for lending out their computer resources. Carosa has used analogies such as AirBnB for your computer or SETI's amateur scientist projects to help explain the concept. After nearly three weeks of trying out the beta, this is our earnings so far when using a 10-year old laptop with limited resources available for crypto mining:

In terms of USDT, the coins mined haven't yet reached $1.00. But the wild card is the 5,000 points. Those points will convert to Hivello coin, and the company estimates that a full month's worth of points will translate to $10-$15 worth of Hivello per active node. This is to ensure that every user sees a minimum of $20 in passive income when using Hivello. Management expects that upper end equipment should get users up to $200 to $300 per month. However, a DePIN mining bro - who is obviously more motived to pump DePIN initiatives than he is to pump TSXV stocks - has claimed to make $227 per day using Hivello: 

Whether this is true or an attempt to push DePIN as a better get rich quick scheme than any YouTube video about Temu dropshipping, the relative numbers are what is most important, assuming all DePINs are equally inflated. Out of these 15 options, Hivello is listed second in earnings potential only to Grass, with the top 3 choices choices being head and shoulders above the next 12. If this user is having this level of success with the beta model, imagine what can happen when Hivello is up at full capacity. The mere mention of Hivello by some crypto geek shows that it's being taken seriously in the industry and not just some ploy to remove money from Canadian gamblers through a TSXV listing. 

The alleged experience of this one user aside, assume the typical earnings for medium grade equipment is $100 per node per month. That might not be much to people living in the west, but that is not the target market here. Management plans an aggressive expansion campaign in Africa, Asia and other developing areas where these few dollars a month represent a significant improvement in someone's standard of living. Management is hopeful to secure third party computer rental programs so that people without ownership of equipment can still benefit from Hivello. The company could then onboard users at a large rate using these rental programs. This leads us back to the positive feedback loop on the value of the token, the incentive for users to use Hivello and the value of the stock we mentioned above. If Hivello is popular, the value of the coin will go up. That $20 we expect from passively using Hivello could turn out to be worth a lot more. If that's the case, our experience and the experience of other early adopters will spread through word-of-mouth. More people join, the demand for the token increases due to the project gaining traction and the cycle starts all over again. 

Demonstrating this effect, here is another post on TikTok from that same crypto bro:

Notice that $GRASS was the top performing DePIN project for November, up 317%. Grass was the only earner higher than Hivello in the previous graphic. So there is reason to believe that the Hivello token can follow a similar path. That hype would almost certainly translate over to the stock. This is why we believe a $0.50 target is achievable in the near term. The Hivello token is slated to launch in Q1, with a target valuation of $45 million U.S. That compares quite favorably to the stock at $0.50. So that's why we think the stock can reach there upon successful launch of the token and the full public release. With the amount of hype of Hivello being generated *in the industry* just from the beta launch (note: NOT just hype in the stock like most pump and dumps, in fact the opposite, anti-hype, as MATE is trading below fundamental value), Hivello is bound to gain some level of traction that should push the stock towards $0.50. The only thing we can see stopping this from happening is if the launch of the token and/or full release of the platform is delayed beyond Q1. And even then, that's a delay in the timing, not a question if it will happen or not. A complete blowup of the platform and token would have to occur, and considering Carosa's CV, we think that is highly unlikely. 

A move from $0.11 to $0.50 is 355% upside which is already good enough. But for those who want to wait for a retirement stock and make 45 times their money, we think MATE offers a reasonably good possibility of that. In a world where Bluesky Digital Assets Corp. (BTC.CN) (BTCWF) can move from $0.05 to $1.00 on literally nothing, we can't rule out that MATE could run from $0.11 to $5.00 in a timeline of weeks or months on significant enough hype and early success. But chances of that are slim, and the company will have to have significant levels of success in the business over time to make it happen. However, the unicorn potential is there. We say $5 because it's reasonable to expect some dilution beyond warrants during that time. An assumption of 200 million shares leaves a 50 million share cushion from today's fully diluted total, as well as clean math to a billion dollar market cap at a $5.00 stock price. We also have to mention that partnerships with the right projects could accelerate hype and/or revenue growth at any time. For instance, the partnership with XYO. XYO is being hyped as the next Tesla and Elon Musk connection. If that goes down as planned, Hivello and MATE will almost certainly get positive run-off. But consider these possibilities as a bonus, rather than central to your investment in MATE or Hivello. 

Some simple math demonstrates how $5.00 through fundamental performance can happen. Assuming $100 per month in earnings per user and 20% revenue share, that's a $20 per month ARPU. 750,000 active users leads to $15 million in monthly revenue, or $180 million annually. An 8x revenue multiple leads to a $1.44 billion valuation U.S. or $2 billion CAD, half of which goes to MATE.  Considering that the company has already mentioned 30,000 users on the platform and have a target market in Africa and Asia that would likely exceed two billion people, 750,000 active users seems very achievable. In order to make this come true, Hivello must:

• Have a successful token launch and ensure that HVLO's valuation remains strong. 
• Ensure that Hivello can handle increased traffic from a growing user base.
• Effective marketing of Hivello, while also relying heavily on word of mouth.
• Increase the variety of DePIN tokens available on the platform.
• Make sure users reach the estimated $20 to $300 per month in revenue.
• Ensure its AI models result in optimal use of each user's spare computing resources.

If these things are all met as promised, it should be only a matter of time before Hivello and then Blockmate achieve unicorn status. In the meantime, shareholders can be reasonably sure of a $0.20 floor price occurring in the near term. With $0.50 reasonably likely heading into Q1 on the hype of the token and full platform launch acting as catalysts. 

Disclosure: We are long MATE.V

Blockmate: Hivello Is The Billion Dollar Idea On Its Way To Billion Dollar Execution

We have been extremely bullish on Blockmate Ventures Inc. (MATE.V) (MATEF). The stock's pullback back under $0.10 after running to $0.13 from $0.03 represents an ideal level to buy while others chase expensive pumps like Bluesky Digital Assets Corp. (BTC.CN) (BTCWF). As we have explained before, MATE offers the superior business model and is unambiguously cheaper as it is trading at half the price it should be based on its majority stake in Hivello. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1016 followers on here as well as 120 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.

For those who aren't familiar with DePin, it can be summed up as allowing others to use your computer's resources for a larger project or purpose. Some examples include data storage, using your IP address as a VPN or using your computing power to develop and test out AI models. Hivello has started with its marketing campaign and we decided to download and use the public beta to see for ourselves how it works. After one day of use, these are the earnings generated so far:

A couple of pennies plus 350 points which are to convert into HVLO tokens. That's the wild card until we know the conversion rate of points into HVLO and demand for the HVLO token once it starts trading. Our goal is to accumulate a good amount of these tokens, just in case. We will continue to try this out to see how earnings improve as our network remains online long enough to start to generate traffic from the more lucrative coins:

The main issue for us was proving out that this platform was functional, and it is. That's already more than what most penny stock vaporware can say. We are experimenting primarily with an old laptop purchased in 2014 and out of commission since 2019 which would otherwise be too slow and frustrating to be functional for anything else. Laptops are not built for crypto mining, especially not useless junk from 2014. The fact that it hasn't conked out yet is already a good sign. This is where we think Hivello has a moat. The idea of bringing DePin mining to the masses with an easy to use and self-managed platform. For instance, it isn't that difficult to set up a Mysterium node by yourself. However, that old laptop would not be able to handle the multiple nodes and platforms needed to duplicate what Hivello offers. It downloaded and operated Hivello with no issue. There must be hundreds of thousands of old and outdated computers hung onto by people which can now be put to good use. Even if it's only $20 per month net of higher utility costs, it'll be worth it to a good amount of people. Especially those in low income regions of the world or where it's difficult or preferable to get your hands on US Dollars. 

No matter how much Mysterium tries to portray itself as a kind of heroic VPN service that allows citizen journalists from North Korea a place to get their voice out, the reality is the platform is being used to do some amount of illegal activity. Read the Reddit forum to get a sense of the issues, but it's not that hard to imagine what type of web searches might be run on an advanced VPN service that makes the end user difficult to trace. If you don't want cops knocking on your door, you absolutely cannot let public networks from myst.exe through your firewall. As Mysterium has tried to crack down on the bad behavior, now it looks like demand is sporadic from the private networks. The MYST token has tanked in value since inception and people are now complaining they are making hardly any money with inconsistent traffic. For someone who created their own Mysterium node, that's going to be a problem. They have to manage the new reality and in the meantime their earnings go down and their computer resources are used inefficiently until they find an alternate DePin:

 

The point of having passive income through DePin mining is kind of self-defeating if you have to manage it all the time. If someone who was ahead of the curve on DePin mining to the point that they set up their own node and they post on Reddit about it is having issues, imagine the thousands of people who aren't ahead of this curve who would be that much more frustrated, cynical or confused about it. That is Hivello's target market. If something like Mysterium falls off a cliff, the AI in the Hivello system will adjust the DePin mining targets to optimize the user's earning potential based on the computing resources they have and current demand for their resources. Right now with six of them available on Hivello, it isn't that much of an advantage. But once Hivello gets dozens then hundreds of these DePin tokens on its platform, we can't imagine anyone being able to manually duplicate what Hivello can do for them. Every user is going to have a different maximum earnings potential based on their individual location and computer resources. It's not like someone can go on YouTube and find "How to maximize earnings with DePin" follow the instructions and get the best result. Even experienced miners will be willing to share some of the revenue with Hivello in exchange for a system that allows them to operate to maximum efficiency. If they are currently earning $1,000 a month but can use Hivello to increase that to $1,100 a month net of Hivello's take, they'll do it. 

This is where we think our reviews help as well. Hivello/Blockmate Chairman Domenic Carosa is touting the benefits of Hivello as "AirBnB for your computer" and he's going to continue with a positive message. Crypto mining has pitfalls and risks. Risks of depreciating your machine from overuse and risks of bad actors using your computing resources to mask their activity at your expense. As different tokens deal with these bad actors like a whack-a-mole game, the lucrative nature of mining their tokens will ebb and flow and miners will have to adjust. Hivello can manage that adjustment for you.  

Now that we did a product review, we can talk about the near-term potential of the stock. We previously estimated a price target of $0.50 on MATE and still think that is a realistic near term target. But after getting familiar with the platform and its potential, the sky is much higher than that. MATE's value proposition can be broken into two components:

1. The value of the Hivello token (55% owned by MATE)

2. The earnings power of the Hivello platform.

The current capital raise is being undertaken at a $30 million valuation and the token FDV is proposed to be at $45 million. After accounting for the 55% ownership stake and USD to CAD conversion, MATE would have $0.20 to $0.30 per share of value just from its ownership stake in Hivello. The beautiful part to the investment thesis is that it's already covered off on the balance sheet side of things while the revenue potential works its way out. Eventually the tokens will be earned by people who are on the Hivello network, but that process only occurs by generating revenue for Hivello. 

There are three main components to figuring out Hivello's revenue potential:

1. Active users on the platform

2. Revenue per user

3. Percent of revenue share taken by Hivello

The first component is the biggest driver of extremely high potential here. The company has stated that there were 30,000 people on the waitlist for the beta launch. More than 50,000 were watching the AMA with Domenic Carosa yesterday. This was all before any serious attempt at marketing. As long as the system can handle it, there is not going to be an issue onboarding a ton of people. The message is simple and compelling to people new to crypto and active miners. Earn extra money from sharing computer resources and mining crypto on an easy-to-use platform for the new people. For the experienced ones, the pitch will be the aforementioned AI-generated peak earnings potential and ability to handle a bunch of DePin tokens on one platform. 

Revenue per user is another wild card, but with a more defined ceiling. Carosa stated yesterday in the AMA that the upper limit of earnings potential with a GPU and the latest equipment should be $200 to $300 per month per device/location. $20 to $30 on the lower end with older equipment. Based on our early stage use, the system is functional but so far not driving anywhere near the rates needed to hit the lower target. We are on pace for about $1 a month so far. If people don't see earnings potential that is material to them, they won't last long on Hivello. The ability to download and use Hivello is a great advantage to shareholders. This is a level of due diligence rarely given to investors. If the platform does result in the returns promised by Carosa, investors who use it will be the first to know. 

The revenue share rate will be at least 10% given that the investor presentation states that Hivello users can stake the Hivello tokens for up to 90% of the rewards. We will make a relatively conservative assumption of 15%. 

Assuming the average user earns $50 gross a month and a revenue share is 15%, Hivello's ARPU would be $7.50. The total addressable market is a big question. There is an estimated 560 million people who own some form of crypto. An estimated one million have mined Bitcoin. While it's unknown how many people have mined DePin. All of these numbers will only increase with time. With think one billion is a reasonable estimate of an addressable market when considering the amount of people who own crypto and the populations of places like Africa and India which stand to benefit a disproportionately high amount from being able to earn a few dollars a month while having decent internet access. 

Out of one billion people, should Hivello attain 1% penetration, or 10 million, that would be $75 million in monthly revenue, or $900 million a year. It's of course much easier said than done, which is why we are keeping our much more reasonable $0.50 target on MATE for now. But it's an illustration of the potential here. It's a lot easier to convince people to make money off of a free platform like Hivello in a relatively hands-off way than it is to acquire users who have to pay for a platform (or even join for free but don't make any money). That's why 10 million might not be nearly as far-fetched as it seems. As long as people find Hivello worth it - so the monthly payout has to be high enough to keep their interest. 

This billion dollar idea is on its way to becoming a billion dollar execution. So far Hivello is active and functional. That is a significant first step. If the company is able to do the following, the stock and the platform will be a success:

• Have a successful token launch and ensure that HVLO's valuation remains strong. 
• Ensure that Hivello can handle increased traffic from a growing user base.
• Effective marketing of Hivello, while also relying heavily on word of mouth.
• Increase the variety of DePin tokens available on the platform.
• Make sure users reach the estimated $20 to $300 per month in revenue.
• Ensure its AI models result in optimal use of each user's spare computing resources.

Disclosure: We are long MATE.V

If You Like Bluesky, You Should Absolutely Love Blockmate

If there is one thing to learn about Canadian penny stock traders, it's that they love to chase stocks high after the best money has already been made. Even more than U.S. traders. That has become apparent when looking at Bluesky Digital Assets Corp. (BTC.CN) (BTCWF). In ran from $0.05 to over $0.80 in Canada last week before pulling back into the $0.30's. It's currently in the $0.60's at just after 11am Eastern on Monday, leaving it with a market cap of around $17 million. There were rumors that it ran based on some confusion around the growing popularity of the social media platform also named Bluesky. But it's main bread and butter is BlueskyIntel, a business intelligence and web engagement platform for businesses looking to get into AI and blockchain technologies. It's expected to launch in January. To simplify it, we feel that it's kind of like a Wix for AI and blockchain based on Bluesky's corporate presentation, and will be a SAAS business model to ideally generate profitability. It's a decent business model and idea, but it's not clear to us how this small cap out of Canada plans to dominate this industry when Silicon Valley dollars will almost certainly come up with their own solutions. 

Contrast this to our recent pick Blockmate Ventures Inc. (MATE.V)(MATEF). At $0.10, MATE has an $11 million market cap. Its 55% owned Hivello DePIN platform is slated to launch in December, along with its token. Bluesky has a tighter float which is conducive to greater spikes and more volatility, but that's already offset with the higher price and the (in our opinion unjustified) greater valuation. In every other way, MATE presents a far better investment opportunity than BTC:

• Hivello has been able to raise capital through the private equity market, with the latest $3.5 million at $30 million U.S. valuation in the latter stages of completion. That means Hivello has managed to attain a valuation outside of the Canadian penny stock market. MATE's 55% stake implies a per share CAD price of over $0.20 and that excludes the potential valuation bump once the Hivello token starts trading. It's trading at half the price it should be based upon a verified third party valuation of Hivello from experienced institutional crypto investors who are willing to hand over a check at that price. In contrast, we don't know how much BlueskyIntel is actually worth because there is no third party investment outside of the Canadian smallcap markets. 
• A follow up to the previous point, Bluesky has been raising capital. The latest raise of just under 5 million shares recently closed at $0.05, with warrants at $0.065. This is substantial dilution for those who are buying in at over 10 times the price just a few days later. In contrast, MATE's share count has remained steady at 111 million for over a year as the last capital raise through the public vehicle took place in mid-2023. Bluesky might have the lower share count, but once the capital raises come off their lock, it will have a lot more selling pressure. 
• The previous point is backed up by substantial insider selling seen on Bluesky. The COO and President Anthony Pearlman has sold nearly half of his shares on the run up:  
  
  
  
• While BlueskyIntel seems like a decent idea, as a SAAS model, it will face an uphill battle to profitability. We find Hivello's DePIN model that enables users to participate in crypto projects and get paid inherently superior in today's economic climate. For Bluesky to make money, it has to convince businesses to hand over money for its services. Hivello enables its users to MAKE money and takes a cut of the earnings. Everyone with access to spare computing power who wants to make a few extra dollars a day will be a potential target. In a climate that's very favorable to that type of model given the gig economy and rising prices of groceries and housing costs. Contrast that to the climate BlueskyIntel's target market is facing - small business closures and rising input costs. As Bluesky is asking for money, it's subject to competition from similar (and presumably more well financed) solutions. There is nothing stopping someone from using Hivello, making money there, then making additional money on another DePIN project that isn't run on the Hivello platform. There are no competitors in the same way Bluesky faces competition.
• Finally, investors in MATE are actually engaged in what the company is doing. They know about Hivello, the arbitrage opportunity through the private equity raise and the business model. They actively talk about these opportunities on the message boards. They can hype the company's prospects without hyping the stock. They are what we would classify as "smart" money. In contrast, BTC is absolutely inundated with dumb money right now or dishonest day traders posing as diamond-handed longs. The rocket ship crowd that just talks about stock prices and their half-assed technical analysis. They're not talking about BlueskyIntel or its coming release in January. They are ignoring or laughing off the insider selling. There is also misinformation out on the stock. Bluesky is NOT the social media platform. Bluesky ISN'T currently mining crypto. But that doesn't matter to someone who is FOMOing in at $0.60 hoping for a $1.00. Well, it doesn't matter until the hype is gone then they have to face the reality of what they actually own and how much it's actually worth. 

Bluesky appears to be a perfectly named company with the perfect CSE symbol that is trading purely on hype. Blockmate is a real investment in the crypto space. Smart money will be coming into MATE and taking profits on BTC while there is profits to be had. It's up to each trader if they want to be smart money or dumb bagholders. Because BTC is almost certainly headed down. Or if the market is so strong that BTC still gains from here, MATE is going to catch up and have the far better returns from this point forward. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1016 followers on here as well as 120 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.

Disclosure: We are long MATE.V

The Cheapest Crypto Stock You Never Heard Of

With Trump easily winning the U.S. election last week, left-wingers in politics are trying to understand why. Especially with a split ticket trend where people voted Trump for President, but voted Democrats otherwise. AOC did some market research on this topic to figure out why some people support her and Trump. Anti-establishment and anti-war reasons were brought up, but one theme that sticks out is the idea that Trump wants regular people to make money and be successful and self-sufficient. Rather than being poor and relying on government handouts and therefore big government bureaucracies. That falls in line with his pro-crypto stance and why he is so popular with crypto traders. A 22 year old with $1,000 to his name will be able to turn that into $10,000 or $100,000 with the right crypto play easier than trying to build wealth through labor or racking up large student loan debt in college. 

We have seen the impact on the price of Bitcoin and crypto-based listings like BTC Digital Ltd. (BTCT) which has gone up 10x in three days. This trend is so strong that it has even infiltrated the notoriously dead Canadian small cap market, where TSX Venture and CSE listings such as Spirit Blockchain Capital Inc. (SPIR.CN), Bluesky Digital Assets Corp. (BTC.CN) and BIGG Digital Assets Inc. (BIGG.V) are on fire. However, there is one crypto stock that is trading well below fundamental value that has one of the biggest upsides of them all, Blockmate Ventures Inc. (MATE.V). While it's up 67% so far today, it's still relatively unknown and trading at a fraction of the value of its majority-owned project. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1016 followers on here as well as 120 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.

At $0.075 and with 111 million shares outstanding, its market cap is currently $8.3 million. Its main asset is the Hivello DePin project, which is in the latter stages of a $5 million raise at a $30 million USD valuation. MATE will maintain a 55% stake, so the value of its holding is $16.5 million USD. Translating that to CAD, it's $23 million, or a little over $0.20 per share. Even with the stock having doubled from its zombie price at the start of the week, it still is nearly two-thirds undervalued compared to the value of the project. 

Why the disconnect? We think it's simple. The TSXV is currently so far removed from the crypto space that the liquidity of the crypto project dominates the liquidity of the parent stock. But we have seen this trend happen before. Eventually the TSXV catches up as the mining investors capitulate and chase the hot trend. And when that catchup happens, it will be violent. SPIR was trading at $0.03 at the start of October, and it's around $0.30 now. The TSXV is the birthplace of HIVE, one of the first listed crypto stocks. Investors there have shown themselves to support the crypto trend. What makes MATE unique is that it's sitting so far below its intrinsic value that another 200% move merely has it trading at a justified level. The "pump" wouldn't have even begun, but shareholders can expect it to after that. 

The Hivello project can raise funds at a $30 million valuation for good reason. DePin projects are like crowdfunding in the crypto world. Instead of only rich people in the know having access to the best projects, individual crypto investors can contribute and make money on these projects. We're not sure if the near 80-year old Trump understands everything there is to know about crypto, but the Hivello project which promotes the monetization of assets while they would otherwise be idle would be something up a real estate mogul's alley. 

Hivello describes itself as such:

"We are dedicated to simplifying DePIN nodes for the masses, aiming to break down the complex barriers often associated with decentralized networks and making them more accessible and user-friendly for everyone.

We are in the process of building a radically simple desktop app. This app is designed to empower users by enabling them to earn a passive income simply by contributing their computer resources. This innovative approach not only benefits the users but also strengthens the overall network."

For anyone who is old enough to remember the early days of the internet, you'll know that pay-to-click ad business models were very popular among students and other people looking for some spare change in the late 90's and early 2000's. The market is definitely there for even $5 per day income streams. With today's hustle and gig economy, that market has only gotten bigger. The advantages to Hivello and other DePin projects are that they are completely passive income. You don't have to be at your computer to earn money. Users can benefit by running the program overnight during non-peak hours, where electricity rates are cheapest. It has the potential to turn everyone in the working class with a computer to at least get a taste of how capitalism works. We expect it to be extremely popular in the developing world where every U.S. Dollar goes a lot further than it does in the West. 

With the launch expected in a few weeks, there is substantial hype around Hivello. Its X account has over 100,000 followers and each mundane post gets a decent amount of engagement. Once it does launch, we expect that hype to increase, with positive effect on MATE's stock price. If Hivello ends up with a valuation north of $100 million (not at all a big ask for a Web3.0 project that makes money for people in this political and economic environment), the value of MATE's investment stake would be worth in excess of $0.50 per share. This is completely disregarding the FOMO hype that can be generated from day traders piling into momentum stocks like we have seen on BTCT or SPIR.CN. If you have made money trading crypto stocks, redeploying those profits into an obscure blockchain stock that has barely moved and is trading below its fundamental value seems like a good move. 

While we think $0.20 per share should be the minimum value on MATE due to its stake in Hivello, our target is $0.50 given the bullish macro environment and pending launch. This target is certainly achievable when looking at the performance and fundamental valuation of peers. Heck, we can't even rule out a move to $0.50 in a few days. 

Disclosure: We are long MATE.V