The Media Is Catching Up to Us!

As Equal Times reports:

At a cost of only US$0.04 a kWh, electricity rates in Kazakhstan are among the cheapest in the world. The promise of saving on energy costs is attracting more and more cryptocurrency mining companies, whose energy-intensive activities leave a large carbon footprint. French companies like BigBlock Datacenter, which failed to sustain its business in Ukraine due to political instability and rising electricity costs, are now betting on Kazakhstan.

Over the last several months, the largest country in Central Asia has become a stable and attractive environment for data centres thanks to its cheap electricity and ‘crypto-friendly’ policies. Moreover, there is no risk of supply interruptions since Kazakhstan’s power stations can produce more energy than its population and current industries require.

“With renewable electricity such as hydroelectricity, there’s production capacity that isn’t necessarily resold. The dam depends on the driving force of water, which can sometimes overwhelm demand,” explains Sébastien Gouspillou, co-founder and CEO of BigBlock Datacenter. The company’s facility in Kapchagay will be able to use up to 45 megawatts to generate bitcoins, the best known of the 1500 currently listed cryptocurrencies, for its foreign clients.

Below we republish our original essay from 27 November…

In today’s Money Morning…the country of Kazakhstan could be about to become both an energy and financial powerhouse…cryptos and energy intersect…the end of the petrodollar and the start of something new…and more…

OK, some news for you.

The Money Morning crew and I have been quietly working away at a new research project for some time.

Our findings are big. Potentially, very big.

If we’re even half right, our conclusions will put you ahead of the curve going into 2021. (Update: You can now find those conclusions here.)

What we’ve been delving into is the great leap forward that has been taken in the energy world this year. And their investment implications for you.

But what we’ve uncovered, as you’ll see when we unspool this story over the coming week, is not just centred on renewables and clean energy.

Yes, that’s been getting a lot of attention recently.

And so too have many clean energy stocks.

There will be some very happy owners of certain wind, solar, and battery companies around the world going into the Christmas break.

But this is bigger than that.

What we’re going to be talking about is what happens next. And how energy is going to intersect with all kinds of different industries next year…to create some potentially bumper gains on certain shares.

As you know if you’ve followed us for a while, my sweet spot is where megatrends collide.

Historically, it’s in these rare instances — and they are very rare — that create genuine fortunes.

I believe that’s about to happen.

And I want to make sure you’re ahead of it.

So, what exactly am I talking about here?

Let’s start with something a little bit left field. But stick with me…

Money and energy are intersecting — and ‘it’s nice’ for investors

The country of Kazakhstan has gotten a bad rap over the years.

They were famously satirised in the Borat movies as a backward nation with questionably interlinked family trees!

Initially the poor Kazakhstanis were outraged by the film and threatened to sue. But they eventually did what all smart people do in such circumstances.

They used the publicity to their advantage.

As reported in Yahoo News:

Kazakhstan’s tourism board has adopted the Borat catchphrase “very nice” in its new advertising campaign.

The phrase is used by the film character Borat, a fictional journalist from Kazakhstan.

The first Borat film caused outrage in the country, and authorities threatened to sue creator Sacha Baron Cohen.

But the country’s tourism board has now embraced Borat as a perfect marketing tool — particularly as a second Borat film has just been released.

The tourism minister added:

Kazakhstan’s nature is very nice. Its food is very nice. And its people, despite Borat’s jokes to the contrary, are some of the nicest in the world.

If the social media response to this campaign is anything to go by, this clever response is going to pay dividends for the Kazakhs.

Not so dumb after all!

In fact, the Kazakhs are actually being very smart in powering ahead with two vitally important industries right now.

Borat might not believe it, but the country of Kazakhstan could be about to become both an energy and financial powerhouse.

Let me show you why…

Cryptos and energy intersect

As you might know the price of Bitcoin [BTC] has been on a tear these past few months.

It’s fast approaching all-time highs, though we did see a sharp pullback last night.

But the fact is, a number of big-name players are starting to get involved including fintech giants, PayPal, and Square.

Even the old money of JPMorgan — who once famously decried bitcoin as a fraud in 2017 — just put a price target of $180,000 on it.

That’s quite the turnaround.

But what’s this got to do with Kazakhstan or energy markets?

Well, earlier this year the forward-thinking nation announced they were going to invest a lot of money into the activity of bitcoin mining.

As reported in Reuters it was one of the first things the newly appointed minister of digital development announced (my emphasis):

On the 2nd of September, the newly appointed Kazakh minister of digital development, Bagdat Mussin, confirmed that his government was going to invest a high amount of money in Bitcoin mining.

His predecessor Askar Zhumagaliyev had already addressed his country’s ambitious $700 Million project. On the day he was sworn in, Mussin told Reuters:

“More than 80 billion tenge ($190 million) has been invested in the sector, today we have preliminary agreements on attracting investments worth 300 billion tenge.

He also added that his country already has 13 active mining farms, with another 4 farms being under construction. Thanks to large coal and oil reserves, Kazakhstan has relatively cheap energy costs, giving it a competitive edge in the global hashrate market.

Bitcoin ‘mining’ is the process of using energy-intensive computing power to secure the bitcoin network.

It’s the process that keeps the system decentralised and thus useful.

Bitcoin miners are rewarded with newly created bitcoin in return for their computer power. So, the higher the bitcoin price goes, the more companies compete to mine bitcoin, the more energy is used, and the more secure the network becomes.

That’s why the bitcoin mining process is called Proof of Work (POW). The energy dedicated to securing the network is part of the POW.

It’s an ingenious system that creates a virtuous circle of strength.

But are you starting to see the connection between energy and money too?

If bitcoin is indeed starting to become accepted as a new form of money or digital gold — then access to cheap energy becomes a competitive advantage for countries that want to mine bitcoin.

In a way this connection is nothing new…

The end of the petrodollar and the start of something new

The 20th century saw the rise of the petrodollar system.

Countries could only buy oil using US dollars. This gave the US a unique advantage as everyone needed their currency to buy energy.

It’s perhaps no coincidence that the fall of oil dominance is coinciding with the fall in US dollar strength.

The fact is, we’re entering a new era for both money and energy.

Right now, both industries are in flux. And investors are scrambling to work out where the chips will fall.

As an exponential investor, such intersections are where I live.

I think there are huge opportunities for those that can jump aboard the early movers.

But what’s really amazing is what such changes might bring.

A new energy market is forming.

A new ‘green’ president is about to enter the White House, and the United States is almost certainly going to re-enter the Paris Accord.

Clean energy stocks everywhere are firing on all cylinders.

Global investors managing nearly $7 trillion of assets are planning to almost double their spending on renewable infrastructure in the next five years.

That this is a huge new megatrend is not in dispute.

But will the new renewable energy paradigm being created ALSO be part of a decentralised financial system?

Will Kazakhstan and other cheap energy nations be able to maximise stranded oil and gas assets by hitching a ride on new energy-driven money like bitcoin?

Will blockchain-enabled power meters enable clean power trading within the next few years?

All fascinating questions.

Ones not really being asked by anyone in the mainstream financial media right now.

And there lies your advantage…

But the intersection of clean energy and money is just part of what we’ll be unwrapping for you next week.

See, this clean energy revolution you’re witnessing is going to have massive ripple effects.

They’re going to have great disruptive impacts. And in places many investors least expect.

But I’m confident that recognising these second-order effects will be the key for investors looking to cash in on these fast-changing energy markets.

You just need to identify what these second-order effects are.

And latch onto the right stocks…before everyone else…

Good investing,

Ryan Dinse Signature

Ryan Dinse,
Editor, Money Morning

Editor’s note: Want to know what stocks we have just put buy recommendations on with this theme in mind? Click here to learn more.


Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle.

Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.

Ryan's premium publications include:


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