Why these 3 Bitcoin miners raked more than 8% today

What happened

For insiders and those watching the cryptocurrency sector from afar, Bitcoin (BTC 4.14%) is usually the most followed resource in this area. Wednesday’s impressive increase of more than 4% in the last 24 hours from 3:30 PM ET is notable.

And today’s rise in Bitcoin has had a big impact on a number of crypto-related stocks. As of 3:30 PM ET, Bitcoin miners Riot Platforms (RIOT 13.81%), Digital Marathon (MARA 10.42%)and Cabin 8 Mining (COTTAGE 9.94%) had rocketed 11.4%, 9.3% and 8.4% respectively since yesterday’s close.

So what

Much of today’s impressive movement in Bitcoin has come from increasingly bullish sentiment around bank-related contagion fears that have subsided in the last day or so. As the financial system appears to remain robust, investors have begun to reassess allocations and positioning.

Thus, it seems that many in the market believe that they have taken too much risk off the table. Consequently, with Bitcoin and other cryptos remaining further up the risk spectrum, these higher risk assets appear to be in higher demand today.

For these three Bitcoin miners, higher Bitcoin prices tend to flow through disproportionately into their valuations. That’s because when the price of Bitcoin rises (and it’s up about 70% year-over-year alone), these companies’ profit margins increase along with rising revenues.

And with most of these companies having debt denominated in dollars, their debt is essentially reduced as a proportion of their Bitcoin holdings (which can be substantial).

What now

Given the leveraged upside these three crypto miners provide relative to Bitcoin, investors looking to play the upside or downside momentum in the crypto space might consider these three stocks as ways to play in this otherwise volatile space.

Since these companies are publicly traded, many investors will be able to much more easily trade these stocks in a more liquid way than many cryptocurrencies. And buying and selling publicly traded Bitcoin miners could allow investors to avoid meddling in crypto exchanges, which have been plagued by problems, at least in the past year.

Today, Riot, Marathon and Hut each seem to be showing investors why they are worth considering in times of volatility. Those who think Bitcoin has longer to run may want to take a look at these higher beta assets right now.