Unseen Opportunity: Bitcoin Mining Stocks Ready For Comeback
By Benzinga
The disparity between Bitcoin’s performance and the shares of mining companies might offer an intriguing investment opportunity.
A recent newsletter from 10x Research, authored by Markus Thielen, suggests that despite recent challenges, the Bitcoin mining industry could be on the brink of growth.
Effects Of Bitcoin’s Halving Event
Bitcoin’s halving event, which reduced miners’ rewards, initially led to increased transaction fees and mining difficulty. This decreased miners’ daily revenue from $70 million to $30 million. However, the market is showing signs of recovery, with miners’ revenue rebounding to $35 million.
Thielen explains in the newsletter that “Bitcoin miners’ revenue has marginally increased to $35 million, indicating a small distress signal to investors. However, listed miners have increased their holdings from 39,000 BTC in December to 48,000 BTC, creating a substantial revenue buffer of $700 million.
Historical Trends and Future
Historical data offers optimism, as Bitcoin mining shares typically decline or consolidate for about 50 days post-halving before experiencing a rally. If this pattern holds true, mining shares could see improved performance in the coming months. Additionally, increased merger and acquisition activity is notable, with large players like Riot Platforms building reserves to acquire smaller competitors, potentially benefiting shareholders in these acquisition targets.
Bitcoin Network’s Resilience
The Bitcoin network performs better than expected despite heightened network difficulty and near-all-time high hash rates. Thielen notes in the report, “The network is doing much better than initially feared. Bitcoin miners might come out on top of this year’s halving.” With Bitcoin mining shares down by an average of 20% year-to-date while Bitcoin has rallied by 60%, there is a potential for substantial gains in mining stocks.
Engage with Leaders in NYC
The Benzinga Future of Digital Assets event will bring together digital asset companies and institutional investors. The event promises extensive networking opportunities, with 4,000 one-on-one meetings and exclusive access to small group roundtables with executives. This one-day event aims to provide a comprehensive overview of the future of digital assets, offering attendees the chance to diversify their portfolios and engage with leading companies and industry experts.
As the digital asset market continues to evolve, investors remain interested in the resilience and potential growth of the Bitcoin mining industry. The upcoming Benzinga event in November will be an essential platform for exploring these opportunities and staying informed about the latest trends in the industry.
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Image: Midjourney
