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
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