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(Kitco News) – Bitcoin mining companies offer investors ancillary exposure to the crypto market from stock market security in the same way that gold mining companies offer increased exposure to precious metals.
Over the past month, as the price of Bitcoin (BTC) has climbed 26% from a low of $18,930 to its current price of $23,900, crypto mining companies have seen the price of their Shares surge as much as 120% over the same period as traders rush to gain exposure to the crypto market.
The leader of the pack was Marathon Digital Holdings (MARA), with a price gain of 124.12%, according to data from Yahoo Finance, followed by Core Scientific (CORZ) with a gain of 110.39%, 98.95% for Hut 8 (HUT), and a 96.69% increase in the price of Riot Blockchain (RIOT).
Judging by the outsized performance of these stocks, especially compared to the 26% gain for Bitcoin and the 67.8% increase for Ether (ETH), it would seem that crypto mining stocks have been deeply oversold and eventually caught up with the market.
It’s not all sunshine and roses, however, as all of the companies mentioned above have seen increased losses despite rising revenues, primarily due to writedowns on their crypto holdings.
Core Scientific reported a 1,601% increase in self-mined Bitcoin year-to-date in its second-quarter earnings filing, which was released Thursday, bringing the total mined to 6,567 BTC. Driven by increased digital mining revenue and hosting revenue, the company’s second-quarter revenue grew 118% year-on-year to $164 million.
According to Marathon Digital’s second quarter results, the company’s BTC production also increased year-over-year, with the company mining 707 BTC in the quarter thanks to an 8% increase in Bitcoin production activity despite a “difficult macro environment”.
Hut 8 Mining Corp. achieved a 71% year-over-year increase in the amount of BTC mined after it was able to increase its hash rate thanks to “additional highly efficient miners,” earning 946 BTC for the quarter as it increased l activity of its Ontario mining facility. Its revenue for the second quarter increased 30.7% year-on-year to $43.8 million.
Despite recent gains in revenue and mining capacity, all of the crypto mining stocks mentioned above remain well below their 2021 highs and still have a long way to go before they can return to their former glory. And with crypto prices continuing to struggle amid rising inflation, interest rates and energy costs, it may be difficult for the current rally in crypto mining stocks to sustain. .
Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.