Bitcoin mining stocks have doubled in the last 30-days
There has been a 300% increase in the value of Bitcoin mining stocks in the last 30 days, with companies offering returns of 95% to 125%. Rising cryptocurrency prices and miners’ profitability are correlated with a rise in stock prices. Still, it’s a pretty big gap to cross. All mining companies have given higher returns despite the fact that Bitcoin is up 18% in the past 30 days and Ethereum is up nearly 70%.
Business is booming for mining companies
There is a discernible trend in the second-quarter financial reports that the mining companies have filed. In spite of the drop in Bitcoin’s value, most of these businesses are thriving, and they’ve seen a rise in revenue as a result. Consider the case of Core Scientific. Its self-mined Bitcoin supply has increased to 6,567, a 160% year-over-year increase. The mining firm’s revenue in the second quarter increased by 118%, to $164 million. Investors clearly have faith in the company, as its stock price has risen by 110% in the past 30 days.
As of right now, we also have Hut 8 Mining Corp., another widely recognized mining company. The number of bitcoins they’ve mined has increased by 71% year over year, to 946. Their second-quarter revenue of $43.8 million was up 30.7% year-over-year. This growth at Hut 8 is the result of increased production and more productive miners. Hut 8 Mining Corp shares increased by 98.95% last month. When you stop and consider it, mining firms are also whales because they create their own Bitcoin rather than buying it on the market. Their expenses are covered, and any surplus is invested or saved.
In light of the current market conditions, it may be challenging for miners to meet their electrical bill obligations for recently purchased mining machinery, personnel, cooling, and other operating costs. But those businesses that can weather the storm and come out stronger will reap the rewards when the bull market eventually does return. They stand to gain millions of dollars from the BTC they currently possess. Therefore, I think this inherent potential is what makes investors so bullish on mining companies. Neither side can win. Either they will make millions of dollars, or their massive holdings will be worthless.