Saturday, January 28, 2023

Top Bitcoin Mining Stocks Post Higher YTD Gains Than Crypto Itself


The top two BTC mining companies in America, Riot Blockchain (NASDAQ:) and Marathon Patent Group (NASDAQ:), have posted 492.6% and 387% gains over the past 12 months, outperforming both and Ether at 170% and 368%, respectively.

Caution Ahead for Bitcoin Mining Stocks

This year’s rise in Bitcoin mining stocks has been comparable to the surge in gold mining companies during the 1970s and the early 2000s.

Furthermore, a similar trend took place three years ago.

When prices surged in 2017, cryptocurrency stocks also surged. At the peak of the bubble, the 60-day rolling average gains on blockchain-based stocks was 165%, with a median growth of 126%.

However, the fleeting nature of rising prices in the last few months is also a reason to be cautious. Bitcoin’s 2017 rally proved to be a short-lived bubble, and this year’s Bitcoin rally could lead to a downfall with a similar effect on crypto stocks.

Tesla Provides a Benchmark

Bitcoin mining company stocks are also comparable to some electric vehicle (EV) stocks.

Upslope Capital Management, an alternative asset management firm, reported a similar uptrend in its EV stocks, with 60-day rolling averages and median gains of 143% and 162%.

EV Stocks

Trailing 60-day returns for EV companies Source: Twitter

Bitcoin mining stocks have 60-day average gains of 114.2% with a median of 125.2%. Those stocks are, therefore, slowly entering the “danger region” as well.

More specifically, hardware manufacturing companies and institutional mining support firms like Argo Blockchain PLC posted average 60-day trailing gains of 74.6%.

Share price gains of Bitcoin mining based companies in America and Canada.

Searches Show Investor Interest

Additionally, Google (NASDAQ:) search data for “Bitcoin” reveals that investor interest in Bitcoin is far below the peak interest levels experienced in 2017.

Google search volume for “Bitcoin” (blue) and “Tesla (NASDAQ:) Inc. (red) Source: Google Trends

On the other hand, the search volume for “Tesla Inc.” witnessed noticeable spikes throughout the year. “Bitcoin” search trends are now approaching their 2019 peak and could narrowly surpass the interest for “Tesla Inc.”

Investor interest in Bitcoin is slowly catching on and is expected to explode when BTC crosses all-time highs. Only time will tell what this will mean for relevant mining outfits.

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