Bitcoin Mining Stocks

From BTC holdings to hash rates - what actually matters to pick the right stock in this space.

Hello People 👋

A little word about bitcoin mining stocks today…

Bitcoin mining stocks are radically different from other stocks in the market. They don’t follow the same logic, correlation or even valuation metrics.

Dividend yield, share buybacks, price to earnings and even revenue growth trajectory are secondary to bitcoin mining stock pickers.

We know it - the miners’ stock price action is heavily correlated to the price of bitcoin. But there is something else that matters. It’s the bitcoin miners’ efficiency (cost) of mining operations and their ability to retain and grow their bitcoin holdings.

As of today only four bitcoin miners managed to exit the basket of listed small cap bitcoin mining stocks.

1. Marathon Digital Holdings (ticker: MARA) - $5.1 bn market cap - HQ in USA - 20,000 BTC

2. CleanSpark (CLSK) - $3.4 bn - USA - 6,591 BTC

3. Riot Blockchain (RIOT) - $2.8 bn - USA - 9,084 BTC

4. Phoenix Group (PHX) - $2.8 bn - UAE - 508 BTC

Additionally to those four, there is another one named Hut 8 Mining Corp (HUT) with $1.2 bn market cap, headquartered in Canada and currently holding 9,116 BTC.

I noted one crystal clear anomaly when analyzing the bitcoin miners and found an excellent opportunity: Riot Blockchain. This crypto miner is by far one of the very largest bitcoin holders after Marathon.

I have little doubt that Riot will surpass Hut 8 this year: Riot is expected to achieve a hash rate (number of hashes (or guesses) per second on a blockchain network - essentially the speed of mining bitcoin) of 36 EH/s this year while Hut 8 stands at a comparatively low 22.3 EH/s.

In comparison, Marathon managed to achieve an all-time high mining power of 31.5 EH/s during the last quarter, so it should remain in a position of leader in terms of BTC holdings, with double of Riot’s BTC holdings.

While Marathon is the “obvious” play in the space because of its sector leadership, I am betting on Riot. Its efficiency of operations demonstrated by the hash rate, its spectacular growth and scaling of operations, as well as its large and growing BTC holdings make Riot an attractive stock.

The stock recently sold off impacted by general crypto price drops, and is currently at an attractive low when we look at it from a chart perspective.

I currently have it in my portfolio and plan to buy more of it. Check it out here.

Thank you for subscribing to my blog. Let me know YOUR favorite bitcoin miner in the comments section. 💚👇

Etcaetera