- “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.
- 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.
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