Crypto Mining Stocks Could Keep Beating Bitcoin in 'Modern-Age Digital Gold Rush'

Crypto mining stocks could deliver amplified returns during a bitcoin bull market, according to FundStrat research.

Mar 19, 2021 at 6:27 p.m. UTC
Updated Sep 14, 2021 at 12:29 p.m. UTC

Over the past year, crypto mining stocks have outperformed bitcoin (BTC), and the trend has accelerated since the cryptocurrency climbed past $20,000 a few months ago, according to the financial research firm FundStrat. The dynamic might hold if bitcoin stays in a bull market, the firm predicts.

  • “Bitcoin and the wider crypto market are the modern-age digital gold rush,” wrote FundStrat, which means crypto mining stocks could see further upside.
  • Because "miners play such a critical role in ensuring the Bitcoin network functions properly, investors have sought opportunities to gain exposure to mining companies,” which generate revenue in the form of mined bitcoin.
  • The largest publicly listed mining companies include Riot Blockchain (NASDAQ: RIOT), Hive Blockchain (OTCMKTS: HVBTF), and Marathon Patent Group (NASDAQ: MARA).
  • As the bitcoin price increases, miners spin up new rigs or upgrade hardware in pursuit of higher block rewards. And FundStrat expects more-efficient mining machines will help some firms remain competitive, which could boost profit margins.
  • But buyer beware: “Mining company equities may serve as a high-beta play on bitcoin … [and when the cryptocurrency] enters a bear cycle, we would expect mining equities to have greater downside volatility than bitcoin,” according to FundStrat.
CoinDesk - Unknown

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Commerce Dept. Asks for Public Comments on Framework for US Crypto Competitiveness

The request is in response to Joe Biden’s executive order in March asking for agencies to coordinate their approach to digital assets.

The request is in response to Joe Biden’s executive order in March asking for agencies to coordinate their approach to digital assets.

CoinDesk - Unknown
2
CoinDesk - Unknown
Panama President May Veto Crypto Regulation Legislation

The bill was approved by the country's legislature in April.

The bill was approved by the country's legislature in April.

CoinDesk - Unknown
3
CoinDesk - Unknown
Ryder Ripps, Bored Apes and 'Owning' an NFT

A debate over fair use and copyright in the NFT age ensues.

A debate over fair use and copyright in the NFT age ensues.

CoinDesk - Unknown
4
CoinDesk - Unknown
Sponsor Labels

CoinDesk - Unknown