“you can mine for gold or you can sell pickaxes.”
During the California Gold Rush fortunes were made and dynasties were forged, although not from mining gold. The most successful businessmen were those who sold the mining equipment. They made a killing selling pickaxes, shovels, wheelbarrows and jeans. The impact was so great it can be seen generations later.
Have you ever heard of Levi Strauss, or bought a pair of Levi jeans?
“Strauss was a German-American businessman who founded the first company to manufacture blue jeans. His firm, Levi Strauss & Co., began in 1853 in San Francisco, California.” Wiki
Levis is the global brand it is today because of the California Gold Rush.
With this anecdote in mind, an article published by Bloomberg recently caught my eye.
These Companies Stand to Gain the Most From the Cryptocurrency Rush
“Mining references generally evoke images of picks and shovels."
"For advocates of bitcoin and the other cryptocurrencies surging in value, the gold may be in the shares of the companies that produce the computer processors and chips used to create the digital currencies in the process that’s become known as mining.”
As it was in the 1800s so it is today, companies selling the mining equipment have the most to gain.
“A complete mining rig, which is made up of graphics cards, a processor, power supply, memory, cabling and a fan, costs between $2,400 to $3,800 on Amazon.com. The Antminer S9, which is estimated to mine 0.29 bitcoin per month, and retails for $2,795, which means you can break even in about four months with bitcoin at $2,700, without taking into account electricity costs. Miners typically buy complete rigs or build them themselves.”
"The following are some of the companies that make the parts."
Nvidia Corp
“The Santa Clara, California-based company manufactures graphic processing units used by gamers and increasingly, by digital-currency miners. GPUs listed in Nvidia’s website can cost as much as $1,200.”
Advanced Micro Devices Inc.
“AMD, as the company is known, also makes graphics cards used for mining ethereum and other coins. The Sunyvale, California-based company’s shares have rallied the most in the Philadelphia Semiconductor Index in the past week, in part thanks to a PCWorld article that said it’s almost “impossible” to get AMD’s Radeon graphics cards after a surge in demand from ethereum miners.”
Intel Corp.
“Digital currency mining has the potential to boost demand for Intel’s processors, said Kevin Cassidy, an analyst at Stifel Nicolaus. While AMD CPUs are popular among miners, Intel is the traditional leader in the sector and is taking steps to counter its fledgling rival.”
Micron Technology Inc.
"Boise, Idaho-based Micron is the largest U.S. maker of memory chips, one of the components of a mining rig, so it also stands to benefit, Cassidy said."
What do you think? Will history repeat itself?
Check out the link below to visit Bloomberg and read the full article.
Source
https://www.bloomberg.com/news/articles/2017-06-08/these-companies-stand-to-gain-the-most-amid-digital-coin-rush