Making cryptocurrency coins is known to be an energy-wasting process, but Australian Bitcoin (CCC:BTC-USD) miner Iris Energy (NASDAQ:IREN) wants to change that. Indeed, you can get direct exposure to environmental, social and governance (ESG) compliant crypto mining with a position in IREN stock.
Admittedly, Iris Energy’s initial public offering (IPO) took place not long ago and it hasn’t exactly been a resounding success. As we’ll see, the early shareholders are in a tough position now.
Yet, a tough position isn’t necessarily a hopeless one. For one thing, the downturn in IREN stock appears to be correlated to Bitcoin’s recent slump.
In other words, a turnaround in the Bitcoin price could also benefit Iris Energy’s shareholders. Besides, if the future of crypto mining is cleaner and greener, then a long-term position in Iris Energy could prove to be a winner.
A Closer Look at IREN Stock
Going back to the beginning, Iris Energy established an IPO price range of $25 to $27. Then, the company set the IPO price at $28.
Unfortunately, Iris Energy’s opening day on the Nasdaq didn’t go well. On Nov. 17, 2021, IREN stock’s first trade was for $28, but the stock closed the session at $24.45.
The situation only got worse from there, as the share price slid throughout November and early December. There were a few price pops along the way, but they didn’t last long.
By Dec. 3, IREN stock had fallen all the way down to $15.43. This isn’t a good omen, but investors probably shouldn’t lay all of the blame on Iris Energy.
Bear in mind that from Nov. 17 (Iris Energy’s IPO date) to early December, Bitcoin’s price tumbled from $60,000 to $50,000.
Therefore, if you’re bullish on Bitcoin, then you might consider a stake in Iris Energy. After all, the ebb and flow of IREN stock will likely continue to correlate strongly with the price moves of Bitcoin.
The main selling point of Iris Energy is that the company mines for cryptocurrency sustainably and renewably, as much as possible.
As the company explains in its prospectus, Iris Energy is focused on locating its operations in areas with low-cost and excess renewable energy.
For instance, Iris Energy’s mining operations in British Columbia, Canada, are connected to the BC Hydro network. There, the electricity was 98% sourced from clean or renewable sources as of 2021.
Moreover, Iris Energy explicitly states that its flagship data center operation in British Columbia runs on hydroelectricity, which is basically harnessing the energy produced by flowing water.
In addition, Iris Energy owns, and therefore has full control over, its electrical infrastructure and data centers.
Looking ahead, the company envisions a “near-term growth pipeline across Western Canada, Central USA and Asia-Pacific” with over a gigawatt of power.
Miners, But Not Holders
Along with the clean-energy angle and the envisioned geographic diversification, Iris Energy has yet another differentiating characteristic.
Specifically, the company liquidates all of the Bitcoin it mines.
In fact, as of Sept. 30, 2021, Iris Energy didn’t have any Bitcoin held on its balance sheet. If the company didn’t hold any Bitcoin in late November and early December (though I can’t prove this to be the case), it would have been a good thing as BTC-USD’s price tanked during that time.
Really, then, IREN stock is a pure crypto-mining play, rather than a wager on Bitcoin itself.
Finally, here’s one more thing that sets Iris Energy apart from much of the competition: quadruple-digit revenue growth.
Notably, Iris Energy’s third-quarter 2021 revenues of 14.3 million AUD (around $10.4 million) represented growth of about 1,177% over the 1.1 million AUD (roughly $0.8 million) from the year-ago quarter.
The Bottom Line on IREN Stock
Clearly, powerful revenues can be generated from sustainable cryptocurrency mining.
Whether it’s a good or a bad thing that Iris Energy doesn’t hold the Bitcoin that it mines, is up to you to decide.
Either way, there’s no denying that Iris Energy is unique among Bitcoin miners.
Thus, IREN stock could stage a comeback in the near future as Iris Energy seeks to set the standard for ESG-compliant crypto mining.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content — and crossed the occasional line — on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.