John McAfee’s latest gambit is mining Ethereum — the cryptocurrency that’s up nearly 4,000% this year

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Jonathan Garber

Jonathan Garber

Jonathan was the editor of Markets Insider. He previously worked at Briefing.com, and on the floor of the Chicago Mercantile Exchange.

MGT Capital, the company run by John McAfee, said it would start to mine Ethereum — the bitcoin rival that has surged nearly 4,000% this year — in its latest bid to turn a profit.

 

MGT, which is publicly traded over the counter, has pitched itself to investors mostly as a cybersecurity company. Cybersecurity is where McAfee made his mark as the founder of the antivirus company that bears his name.

But McAfee has more recently started to tout cryptocurrencies. He said last month that investments in bitcoin would help put MGT back in the black by the end of the year.

 

Ethereum is like bitcoin in that it can be “mined” by computers that solve complex computations. MGT said Friday that it reached an agreement with BIT5IVE LLC to buy up to 60 graphics-processor-based mining computers to help mine for ether.

 

“We are more convinced each day of the growth and value of digital currencies, and our company is uniquely positioned to be a leading provider of processing power to relevant blockchains,” McAfee said in the statement. McAfee’s foray into the cryptocurrency space comes when others have been sounding the alarm after a huge run-up in prices.

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In early June, billionaire Mark Cuban said it was evident that bitcoin was a bubble, tweeting, “When everyone is bragging about how easy they are making $=bubble.” Days later, Goldman Sachs warned that bitcoin was looking “heavy” and that a drop to between $2,330 and $1,915 a coin was looking likely. Bitcoin put in a low of $2,076 just a day later after the scaling debate came back into focus as the bitcoin-mining firm Bitmain outlined its “contingency plan” for if a hard fork were to occur. Bitcoin has recouped those losses and now trades at $2,708. Ethereum is up by 3,964% in 2017. As for MGT, its stock is up by 42% year-to-date.

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