After BTC Recovers, Crypto Mining Stocks Reach New Highs

After a terrible year in which public crypto miners racked up $4 billion in debts, the rise in crypto mining stocks was a relief for the industry.

The Bitcoin price’s rise to a level not seen in months has also been good for mining stocks. Many stocks related to crypto-mining had their best month in a year. The rise in mining stocks also helped the miners who had trouble and had to sell a lot of their mined coins to get more cash in 2022.

Bitfarms, one of the best BTC mining companies, saw its stock price rise by 140% in the first two weeks of January 2023. Marathon Digital Holdings came in second, with a 120% rise in its stock price. In the same period, the value of Hive Blockchain Technologies’ stock almost doubled, and the MVIS Global Digital Assets Mining Index went up by 64% in the first month of the new year.

The Luxor Hashprice Index, which tries to figure out how much a miner could make from the processing power used by the Bitcoin network, has gone up by 21% this year. This is partly because the price of bitcoin has increased, which has made the rewards bigger.

During the bull run of 2021, several mining companies went public, and others spent a lot of money on equipment and growth. But a prolonged crypto winter in 2022 showed that many of these mining companies needed to be stronger and set up correctly.

During the bull market in 2021, the Bitcoin mining industry borrowed a lot more money, which hurt their finances during the following bear market. More than $4 billion is owed by public Bitcoin miners, and the top 10 Bitcoin miners owe a total of almost $2.6 billion. By the end of 2022, major Bitcoin miners like Core Scientific would have gone out of business.

The rise in the price of Bitcoin in January helped struggling crypto mining stocks reach new highs for the year. It also helped bitcoin-based exchange-traded funds do better than most traditional equity ETFs.