• The bitcoin mining industry has seen a resurgence in activity due to a rally in bitcoin’s price.
• Lower energy costs have also helped miners get back on their feet.
• Publicly traded bitcoin mining firms have outpaced bitcoin this year, with some stocks up as much as 693%.
Bitcoin Miners Rebound from Crypto Winter
The bitcoin mining industry is slowly recovering from the brutal crypto winter of 2020-2021. After seeing several bankruptcies and fire sales, the recent surge in bitcoin’s price has provided some relief for miners. Additionally, lower energy costs over the past few months have also helped to improve their economics.
Rising Investor Sentiment
The rally in BTC’s price has led to an increase in investor sentiment towards the crypto mining sector. According to Ethan Vera of Luxor Technologies, this shows that investor sentiment is still largely driven by BTC prices rather than mining fundamentals. This is evidenced by a composite index of public mining rig manufacturers, foundries and miners compiled by Luxor which has already increased by 52% so far this year, compared with Bitcoin’s 44% rise.
Publicly Traded Mining Firms Outpace Bitcoin
Shares of publicly traded bitcoin mining firms have particularly outperformed Bitcoin so far this year. Core Scientific (CORZQ) has been the biggest winner with its equity value growing 693%, followed closely by Digihost (225%). Other notable stocks include Cipher Mining (CIFR), DMG Blockchain (DMGI), Bitfarms (BITF), Iris Energy (IREN) and Bit Digital (BTBT). All these stocks have at least doubled since the beginning of 2023.
Miners Still Have A Long Way To Go
Despite these gains, stock prices are still below pre-crypto winter levels and miners may not be completely out of the woods yet. They will need sustained bullish momentum if they want to return to where they were before March 2020 when Bitcoin was trading near all-time highs near $20,000 per coin.
Although it appears that miners are starting to emerge from the crypto winter, there is still a long way to go before they can return to pre-2020 levels of profitability and activity levels. However, rising investor sentiment combined with lower energy costs suggest that they may be headed in the right direction once again