Mining company's share price soars 2400% as it turns to cryptocurrencies

Natural Resource Holdings' share price has jumped 2,400 per cent since it announced it was moving into cryptocurrencies. Picture / AP

The digital currency bitcoin is often hailed by its supporters as a new version of gold, but the claim has been taken literally by one company, with spectacular results.

Natural Resource Holdings, a small Israeli outfit that has invested in a group of precious metals mines, has seen its share price jump from 105 shekels ($44) to 2,615 shekels - a 2,400 per cent rise - since it announced it was moving into cryptocurrencies.

In October, the company announced it was switching to working on blockchain - the database technology - behind bitcoin - and this week it confirmed it was planning to buy a 75 per cent stake in Bitfarms, a Canadian company that "mines" cryptocurrency.

The news has seen the company's value shoot up from around £3m ($5.9m) two months ago to £78m as of Thursday.

Mining operations have become big business amid the stratospheric rise in cryptocurrency values.

Instead of being run by financial institutions, the bitcoin network is maintained by computers solving cryptographic puzzles and creating new "blocks", records of transactions, for which they are rewarded in fees and newly minted bitcoins.

The growth of the network means that mining now requires supercomputers and enormous energy bills, turning what was once an amateur hobby into a professional endeavour, carried out at companies like Bitfarms.

The company is North America's largest cryptocurrency mining operation, according to Natural Resource Holdings' stock exchange announcement.

Before the announcement, Natural Resource Holdings was largely invested in a handful of gold, metal and silver mines across the US.

It is far from the first listed company to cash in on investor excitement about cryptocurrency.

Shares in London-based On-Line jumped more than 300 per cent when it announced it was changing its name to "On-Line Blockchain", while shares in a small biotech firm, Bioptix, rocketed more than 200 per cent after changing its name to "Riot Blockchain".

Bitcoin is trading above US$17,000.