If history repeats itself, Bitcoin miners may return

With bitcoin struggling to maintain the psychologically important price point of $ 20,000, it is not surprising that bitcoin miners were among the most rejected stocks in what was a miserable first half of 2022 for the wider market.

Among the other problems that weigh on equities for bitcoin miners is that growth stocks are at a disadvantage. Exchange traded funds, such as VanEck Digital Assets Mining ETF (DAM), paint that picture. However, there is some hope for DAM and its components.

To be sure, bitcoin miners are currently an asset class that is difficult. Investors are worried about falling incomes and possible margins due to falling prices for the largest digital currency. As a result, some bitcoin miners are flooding exchanges with cryptocurrencies to strengthen their cash positions and ensure survival. Still, DAM can be positioned for better views if history repeats itself.

“Bitcoin (BTC), which visited the $ 20,000 series after a year and a half, made mining – the most important job for the ecosystem – a costly affair. But if history were to repeat itself, BTC investors could witness another epic bull run that has helped in the past. Bitcoin reaching a record high of $ 69,000, “Arijit Sarkar reported for Cointelegraph.

Translation: The last time things were so bleak for bitcoin miners from an income perspective was about a year ago. From there, bitcoin prices – and the miners’ shares – rose through the end of the year.

“Despite mixed feelings about the recovery of the crypto-ecosystem, it turns out that small investors have increased their investment efforts in the middle of the bear market when they fulfill their long-term dream of owning an entire BTC (1 BTC). Global recession, geopolitical tensions, falling crypto-economies like Terra and the ongoing COVID-19 pandemic is currently preventing the Bitcoin ecosystem from unleashing its true potential, ”according to the Cointelegraph.

DAM, which tracks the MVIS Global Digital Assets Mining Index, was not included in that run when the VanEck ETF debuted in March. However, the majority of the fund’s were 25 holdings. This may signal that DAM has the right amount of influence for a possible decline for bitcoin miners.

In addition, the analysis company Arcane Crypto says: “Argo, CleanSpark, Stronghold, Marathon and Riot are the best positioned miners to maintain the crypto winter. At the same time, the major player Core has almost matched its operating costs with its total revenues,” added Cointelegraph.

Riot, Marathon and CleanSpark make up over 17% of DAM’s list. Argo has 4.54% of the fund’s weight.

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The opinions and predictions expressed here are solely those of Tom Lydon, and may not come true. Information on this site should not be used or interpreted as an offer to sell, an invitation to buy or a recommendation for any product.