Bitcoin mining stocks may generate high profits amid larger consolidation


After the approval of the Bitcoin ETF, there was an increased general interest in Bitcoin investments. While BTC’s new ATH alongside the positive headlines the coin has garnered has already bolstered the top coin’s narrative, over the past two weeks Bitcoin’s momentum has been rather oblique. However, Bitcoin mining stocks appeared to recover even as BTC consolidates.

Investing in BTC mining stocks could be an unconventional way to invest in Bitcoin, as highlighted in a previous article. However, now that BTC appears to be performing quite well over the past month, activity and volumes in BTC mining stocks have also skyrocketed.

So here’s how one could take a break from BTC trading and watch Bitcoin mining stocks to reap some profit.

Mining companies outperform

With Bitcoin consolidating after an ATH, it seemed like participants were turning their attention to BTC mining stocks. Notably, mining companies, including Marathon Digital and Hut 8, outperformed other crypto-related stocks on Tuesday, as the mining economy continued to shine.

Given that the market has already seen seven positive difficulty adjustments in a row over the past three months, it indicated the return of hash and miners, supported by improved hash rate, mining companies added to their BTC HODLings.

In reality, Over the past few days, mining values ​​were up across the board. Notably, the value of Hut 8 Mining has increased by almost 80% since September 21.

While CleanSpark, Canaan and Marathon also recorded impressive gains. Meanwhile, according to Glassnode data, the Bitcoin network hashrate fell to around 153 EH / s, down from 185 EH / s in October. Typically, a drop in hashrate along with rising prices means that miners get more profit from mining the coins.

Booming activity and turnover

Bitfarms recently announced that its bitcoin production in October had increased from 305 to 343 in September and expects to increase its hash rate to 3 EH / s in the first quarter of 2022 and to 8 EH / s by the end of next year.

Additionally, Marathon’s mining fleet produced around 2,516 self-mined BTCs in 2021. By producing 417.7 self-mined bitcoins in October 2021, the company increased its total BTC holdings to around 7,453 with a fair market value of approximately $ 457.4 million.

DA Davidson analyst Christopher Brendler also estimated in a recent study that for miners like Marathon Digital, gross margin, or profit after operating costs, will be around 89.6% in 2021 and 90. , 8% in 2022.

Overall, while Bitcoin mining stocks seem like a good strategy to enter the market with less risk, it would ultimately require a lot of self-research as well. Nonetheless, with the surge in crypto mining stocks, this seems like a good investment option.


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