As Bitcoin starts to heat back up, traders and investors are scouring the markets for fresh ways to participate in the upside potential offered by the unique asset, and one stock stands out on a deep-value basis: GD Entertainment & Technology Inc. (OTCMKTS:GDET).
The company is involved in both crypto and CBD and has a unique angle on the promise of bitcoin. Moreover, we think it has been entirely overlooked over the past year and stands to make up ground – potentially dramatically – once the reconciling process begins in earnest.
GDET is a player in the crypto markets as a mining firm, a providing of cold-storage card accounts, and as an emerging star in the rapidly growing Bitcoin ATM market – which is an interesting marketplace offering two-way market access to crypto markets through publicly available ATMs capable of allowing underbanked and cash-bearing individuals with access to the crypto markets.
The Start of Something Big?
One of the most important develops for the stock as it moves to transition its model to a robust commercial-stage venture is its pilot program for the BTC ATM business – which operates under the “HyperDigital” subsidiary. In December, the company announced “the official commencement of the Company’s Bitcoin ATM Pilot Program with the full installation and activation of its inaugural Bitcoin ATM unit at iVapeATX, a premier vape products store located in Austin, Texas.”
“We want to emphasize to our shareholders that this step is not about the revenues we will drive from this location – which could be significant – but about the pilot data we will have in hand as we market the HyperDigital service to locations across the country that meet prime specifications for transaction volume in two-way Crypto transactions driven by cash patrons,” commented Anil Idnani, CEO of GDET.
Recent research from MarketsandMarkets calls for the Bitcoin ATM space to grow at a compound annual growth rate of nearly 55%, with total market size increasing from $6.8 million in 2017 to over $144 million by 2023. A recent survey conducted by CoinATMRadar.com found that, on average, operators of Bitcoin ATMs reported an average transaction volume of $30,000 per machine per month, with some operators reporting monthly average transaction volumes exceeding $100,000 per machine.
According to the release, “The Company has installed the pilot unit at the iVapeATX location, where the machine is now active. Data from this location, including transaction volume and overall user engagement, will serve as the basis for expansion to other locations with similar demographic and market profiles. The Company already has initial interest from several additional locations local to the Austin market, including a second Vape store with the same ownership as the pilot location.”
“Once we can prove the value, we believe we will have an easy time driving organic growth in the HyperDigital segment,” continued Mr. Idnani. “Proof means we are showing both net profitability at each location for our model and enough interest to suggest to store owners that they not only benefit from lease payment revenue but can also expect a material uptick in store traffic as they catch a tailwind from a large and rapidly growing crypto-friendly community.”
Our sense is that this pilot trial is destined to produce a solid margin profile. At that point, we are likely to see a sharp expansion in this segment and the company will likely be positioned as the overall leader in the BTC ATM market space.
If Bitcoin gets back into gear on a sustained basis at the same time, GDET shares could become a serious speculative favorite.
The goal of successful micro-cap speculation is to research undervalued names in this group and get into speculative favorites before the crowd finds out about them. That’s how successful micro-cap traders can grab a piece of stories that show dramatic gains over short periods. It’s about anticipation. They won’t all work out. But if just 1 in 10 get traction, you can end up with very sizeable gains. GDET may be an excellent candidate for this type of strategy as Bitcoin starts to heat back up.
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