To be sure, many bitcoin miners are not yet profitable, and this year’s decline in the largest digital currency is weighing on the efforts of these companies to throw away their money.
For Bitcoin miners, profitability is a top priority
It has been a burden for exchange-traded funds which VanEck Digital Assets Mining ETF (DAM ), but with some market observers predicting a short-term rally for bitcoin, miners may be ready to follow suit. In addition, some companies in this area place more emphasis on profitability.
“With current prices and Bitcoin network difficulties, only Bitcoin miners with the latest, most efficient rigs and very competitive power rates are able to break even. That is, if they rely solely on Bitcoin mining for their income .The firms that are keeping their heads above water have had to find other ways to monetize their hardware fleets,” reports Stacy Elliott for Decrypt.
Citing comments made by Applied Blockchain CEO Wes Cummins at the company’s recent earnings conference, Decrypt highlighted some of the bitcoin miners that relatively have quality characteristics. The good news for investors who don’t want to pick stocks in this battered group is that DAM is home to some of the best-positioned names to weather a longer-than-expected crypto winter and show leadership once that scenario is over.
“I think Marathon is one of the best counterparties, if not the best of the listed miners in the industry,” Cummins said on the company’s conference call.
Marathon Digital (NASDAQ: MARA) is the largest of the 25 holdings in DAM with a weight of 8.30%, according to VanEck data. The company’s strong counterparty positioning can help build confidence among investors. As it is, the stock is performing less badly than many rivals in this trying environment.
Another name that can offer upside and contribute to a DAM Rebound is Hut 8 Mining Corp. (COTTAGE). That stock makes up 6.29% of the ETF’s list.
“But Hut 8’s Bitcoin verve tapered off as CEO Jamie Leverton said the company is growing HPC business, ‘which includes potential exploitation of our GPU machines to provide AI, machine learning or VFX deliver services to customers, and mine the second most profitable digital asset for proof of work during idle time,” reports Decrypt.
Time will tell, but some of the steps DAM components that take to survive today can pay off in the long run.
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