The crypto space is experiencing a breath of fresh air due to Bitcoin’s rise in price, also the crypto mining stocks have surged to new highs due to the bitcoin effect.
The mining stocks have increased as a result of Bitcoin’s price recovery to a multi-month high. Numerous of these stocks involved in cryptocurrency mining saw their highest monthly performance in a year.
The increase in mining stocks was also a comfort for the struggling miners who had to sell a substantial portion of their coins last year to increase liquidity.
In the first two weeks of January, one of the biggest BTC mining companies, Bitfarms, had a 140% increase, while Marathon Digital Holdings Inc. saw a 120% increase.
The stock value of Hive Blockchain Technologies Ltd. almost doubled at that time, while the MVIS Global Digital Assets Mining Index increased by 64% in the first month.
The Luxor Hashprice Index has climbed by 21% this year in an effort to measure how much a miner may earn from the computing power required by the Bitcoin network. Larger incentives brought on by a rise in the price of Bitcoin are partially reflected in this.
A number of mining businesses went public in 2021 as a result of the bull market, while others made significant investments in new equipment and growth. However, a protracted crypto winter in 2022 revealed these mining companies’ flaws and improper structure.
The Bitcoin mining sector borrowed far more during the 2021 bull market, which had a severe impact on their financial situation during the following bad market.
The top 10 Bitcoin mining debtors jointly owe close to $2.6 billion, compared to the more than $4 billion in liabilities owed by public Bitcoin miners. Leading Bitcoin miners like Core Scientific declared bankruptcy at the end of 2022.
Bitcoin-based exchange-traded funds (ETFs) have outperformed the majority of the conventional equities ETF market thanks to the BTC price increase in January, which also helped struggling crypto mining companies achieve new annual highs.
