Miners like Marathon Digital, Hive Digital Technologies, Hut 8 and Iris Energy are not only among the top performers on the Nasdaq stock exchange, they also leave Bitcoin’s returns far behind.
Measured since the beginning of 2023, the Las Vegas-based miner Marathon Digital Holdings has gained 193 percent. BTC, on the other hand, “only” prints a price increase of 54 percent on the table.
HIVE Digital Technologies (+113 percent YTD), HUT 8 (+162 percent YTD) and top performer Iris Energy (+250 percent YTD) also achieve similar dream returns. Mining stocks therefore act as a kind of leverage on Bitcoin. But why exactly?
The leverage is due to miners always holding Bitcoin on the balance sheet,
says German HIVE representative Wolfgang Seybold in the BTC-ECHO Experts Podcast.
Accordingly, an increased Bitcoin price increases the balance sheet on the books. After all, you could sell the BTC for a profit at a later date.
“In addition, the mining market is still relatively small. “So a relatively large amount of capital can flow into the sector within a short period of time,” Seybold continues. Sounds logical: Small markets can be moved with less capital inflow. In addition, the operating costs for the mining facilities remained relatively constant, according to the mining expert. Electricity prices are fixed in the long term through so-called power purchase agreements.
But – you have to be honest: “The lever also works the other way around.”
Recently, mining stocks also collapsed alongside Bitcoin. According to the Hashrate Index Crypto Mining Stock Index, mining stocks have fallen around 29 percent since the peak on July 13 this year.
You can find out how the Bitcoin network is currently doing and what to pay attention to now in the current Bitcoin Report.
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