Bitcoin miners’ stocks, such as Marathon Digital Holdings and Riot Platforms, have outperformed the largest digital currency this year, with returns of more than 800% and 400%, respectively. During the same time frame, the US crypto exchange Coinbase Global and Bitcoin proxy MicroStrategy both increased by more than 350%. In 2023, Bitcoin will have increased by approximately 160%.
Crypto mining stocks, in retrospect
Bitcoin mining is an energy-intensive process in which miners use specialized computers to validate Bitcoin blockchain transactions and collect token payouts.
The stock market is surging as digital-asset mining firms expand operations to bolster Bitcoin production, with anticipation that demand for the crypto will skyrocket if US regulators allow exchange-traded funds to hold it directly.
Bloomberg Intelligence analysts predict that the Securities and Exchange Commission will approve a spot Bitcoin ETF within the next two weeks.
According to Yahoo Finance market data, the publicly traded company has seen more than 105 million shares worth of trading volume in the last 24 hours, outperforming blue-chip firms such as Tesla, Apple, and Amazon.
Riot Platforms recently announced huge purchases of mining machines. Marathon, the largest miner by computer power, acquired additional facilities to boost mining efficiency, a significant departure from its long-held policy as an asset-light mining company.
Marathon has increased for 11 consecutive trading sessions, more than tripling to $31.07. When Bitcoin reached its all-time high in November 2021, the stock was trading for more than $80.
If the rise continues, mining stocks may face greater buying pressure and a short squeeze, driving prices even higher.
Bitcoin mining set to push market prices higher
Most crypto equities began 2023 at their lowest price levels of the year, following a series of industry scandals and bankruptcies, such as the collapse of the FTX exchange, making them a popular target to bet against.
While Bitcoin has grown at an exponential rate throughout 2023, up more than 163% since the beginning of the year, shares in Bitcoin miners have far surpassed the market-leading cryptocurrency.
Coinbase, the largest publicly traded crypto exchange, has also benefited from strong tailwinds, rising more than 450% since the beginning of 2023.
Still recovering from FTX’s demise and a slew of other high-profile meltdowns in 2022, crypto-related equities began the year as a hot short trade.
On the other hand, traders looking to gamble against the crypto industry may have gotten more than they asked for, with more than $6 billion in crypto-related shorts liquidated so far this year.
BTC market performance
Today’s Bitcoin price is $43,039.64, with a 24-hour trading volume of $20,657,581,464.76. This reflects a 0.70% gain in the last 24 hours and a -1.60% decrease in the last seven days.
The global crypto market valuation is now $1.77 trillion, a 2.77% increase over the last 24 hours and a 114.2% increase over a year ago. Bitcoin has a market cap of $842 billion as of today, reflecting a 47.55% domination. Meanwhile, the market cap of stablecoins is $132 billion, accounting for 7.44% of the total crypto market cap.
Bitcoin investors will be pleased to learn that Saylor disclosed on X (formerly Twitter) on Wednesday that his firm invested an additional $615.7 million to acquire 14,620 Bitcoin. This resulted in a price per coin of $42,110 on average. He added that MicroStrategy currently possesses 189,150 Bitcoin as of Tuesday.
This quantity cost the company $5.9 billion at an average price of $31,168 per coin, which, considering the current value of the coin, is quite a bargain. A straightforward calculation demonstrates that MicroStrategy is currently holding unrealized Bitcoin gains in excess of $2 billion.
These are the types of figures that elicit enthusiasm among investors. Bitcoin’s meteoric rise, along with that of numerous other cryptocurrencies and associated crypto assets, only served to increase the temperature on a market investment that was already extremely heated.
And, as is customary, Bitcoin mining firms track Bitcoin’s movements. Investors anticipate substantial future returns for miners that have maintained their position during the peak of this rally and the crypto winter several months ago.