Bitcoin Mining Stocks Outperform Tech Stocks As BTC Rises

Bitcoin mining stocks are outperforming tech stocks and indices so far this year, following an 80% rise in the underlying asset, BTC.

There has been a resurgence in the development of Bitcoin mining stocks this year. The big moves for the leading players follow a painful downturn for many in 2022.

According to BTC mining expert Jaran Mellerud, 20 of the industry’s leading mining companies have seen inventory double or more this year.

Their performance has outpaced Bitcoin itself and dwarfed the performance of the best tech stocks.

On 18 April, Mellerud published a summary of the mining industry’s best achievements in 2023.

Massive Gains for Bitcoin Mining Stocks

Core Scientific is the best Bitcoin mining company so far in 2023, with a whopping 455% gain. The analyst explained the motives behind the large share change.

“The massive debt has given equity a boost in the market so far in 2023. Cash flows relative to equity have been positively impacted (but disproportionately) by the improvements in the mining economy.”

Furthermore, Digihost, Cipher, Riot, Iris Energy and Marathon have also seen big gains between 237% and 378%.

Most of these companies have relatively low levels of debt in relation to equity and are significantly less financially leveraged than Core Scientific, Mellerud pointed out.

“The outperformance of these stocks is likely driven by company-specific factors, as they all delivered solid monthly operating updates that beat expectations this quarter.”

Also, Bit Digital, Bitfarms, Cathedra, Hive Blockchain and Hut 8 all increased between 142% and 213% this year.

Remarkably, the 20 mining companies have outperformed Bitcoin’s 80% rise since the beginning of the year.

The analyst predicted that if the BTC price rose another 40% to reach $42,000 this year, “most mining stocks would rise by more than 50% from today’s levels, while the top four-to-five winners would rise by more than 150 %.”

Tech stocks can’t compete

By comparison, according to MarketWatch, the technology-heavy NASDAQ 100 index has only managed a 20% increase so far this year.

The world’s dominant search firm, Alphabet, has seen its shares rise a miserable 17% this year. Since New Year’s Day, software giant Microsoft has only posted a 20% gain.

Furthermore, the world’s largest technology company Apple has managed a 33% increase in share prices in 2023.

Often referred to as a store of value, gold prices have risen just 9% this year.

Even Coinbase stock (COIN) has doubled in price since the beginning of the year. Therefore, the crypto narrative has returned with a bang in 2023, but can it be sustained for the rest of the year?