Bitcoin mining stocks rise along with rising crypto prices
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(Kitco News) – Bitcoin miners offer investors additional exposure to the crypto market from the safety of the stock market in the same way that gold miners provide increased exposure to precious metals.
Over the past month, as the price of Bitcoin (BTC) climbed 26% from a low of $18,930 to today’s price of $23,900, cryptominers have seen their share prices increase by up to 120% over the same period as traders attempted to exposure to the crypto market.
Leading the pack was Marathon Digital Holdings (MARA), with a gain of 124.12%, according to data from Yahoo Finance, followed by Core Scientific (CORZ) with a gain of 110.39%, 98.95% for Hut 8 ( HUT) , and a 96.69% increase in the price of Riot Blockchain (RIOT).
Judging by the outsized performance of these stocks, especially compared to the 26% gain for Bitcoin and the 67.8% increase for Ether (ETH), it appears that cryptomining stocks were deeply oversold and have finally caught up to the market.
It’s not all sunshine and roses, however, as all the companies mentioned above have seen widening losses despite rising revenues, driven mainly by impairment losses on their crypto holdings.
Core Scientific reported a 1,601% increase in self-mined Bitcoin year-to-date in its Q2 results archive, published on Thursday, bringing the total mined to 6,567 BTC. Thanks to increases in digital mining and hosting revenue, the company’s Q2 revenue rose 118% year over year to $164 million.
According to Marathon Digital’s Q2 results, the firm’s BTC production has also increased year-on-year, with the firm mining 707 BTC in the quarter thanks to an 8% increase in Bitcoin mining activity despite a “challenging macro environment.”
Hut 8 Mining Corp. realized a 71% year-over-year increase in the amount of BTC it mined after it was able to increase its hash rate due to “additional highly efficient miners,” and earned 946 BTC for the quarter as it ramped up activity at its Ontario mining facility . Q2 revenue increased 30.7% year-over-year to $43.8 million.
Despite the recent gains in revenue and mining capacity, all of the crypto mining stocks mentioned above remain well below their 2021 highs and have a long way to go before they can regain their former glory. And with crypto prices continuing to struggle amid rising inflation, interest rates and energy costs, it may be a challenge for the current rally in crypto mining stocks to sustain itself.
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