South_Agency
Bitcoin (BTC-USD) rose 9.3% in November, further boosting Bitcoin miners' stocks and their profitability prospects.
The job of these miners is to receive Bitcoin (BTC-USD) as a reward for completing “blocks” of verified transactions by solving a complex mathematical problem on the blockchain. All other things being equal, mining companies want BTC prices to rise as it would increase their revenue. However, to ensure they are profitable, miners must keep equipment and electricity costs under control.
Last month's Bitcoin (BTC-USD) rally was enough to offset the rise in network hashrate – a measure of industry competition, which hit a record high for the 11th straight month, said JP Morgan analyst Reginald Smith, a Group of 14 US companies observed. listed BTC miners – wrote in a recent note to customers.
One of the main reasons for Bitcoin (BTC-USD)'s rise over the month is the continued confidence that the US Securities and Exchange Commission will soon approve an exchange-traded fund that invests directly in Bitcoin. Many have suggested that a spot Bitcoin ETF, if approved, could open up crypto markets to players in traditional finance.
Another development is growing hopes that the Federal Reserve will begin cutting interest rates next year from a 22-year high. But both narratives, particularly the ETF narrative, have helped the most prominent cryptocurrency rise about 130% over the past 11 months following last year's market downturn.
JP Morgan's Smith said CleanSpark (CLSK), whose shares have risen nearly 275% year-to-date, is his top choice among BTC miners due to its “combination of size, solid fleet efficiency and electricity costs.” He has an “Overweight” rating on the stock. Iris Energy (IREN) is another miner he rates overweight as the company expects outsized hash rate expansion in the near term, as well as “favorable power contracts and additional expansion opportunities at the Childress site, as well as high value relative to peers.”
The sell-side analyst is not bullish on all the miners he covers. Marathon Digital Holdings (MARA) is rated Underweight due to its high variable cost base. And while Riot Platforms (RIOT) has a “clear path to meaningful hash rate expansion,” the stock already appears to be “pricing in a meaningful Bitcoin price increase (or network hash rate decline),” it says Note.
It will be interesting to see how Bitcoin (BTC-USD) production and miner hash rate growth fared over the last month. Some of them, including CleanSpark (CLSK), recorded strong statistics for October – when BTC rose by 28.8% – despite increasing mining difficulties.
Other Bitcoin miners: HIVE Digital Technologies (HIVE), BIT Mining (BTCM), Hut 8 Mining (HUT), Bitfarms (BITF), Bit Digital (BTBT), Greenidge Generation (GREE) and Core Scientific (OTCPK:CORZQ).
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.