This is why Bitcoin mining stocks outperform BTC prices in 2021

Bitcoin (Bitcoin) might have Outperform the traditional financial market Regarding investment returns, cryptocurrencies still lag behind Bitcoin-related companies.

The price of BTC rose by about 290% year-on-year, from 10,695 USD to a little over 42,000 USD. In contrast, the share price of Marathon Digital Holdings (MARA), one of North America’s largest crypto mining companies, rose 1,641% over the same period.

MARA stock weekly price chart. Source:

Agency-led pump

More crypto mining companies have exceeded spot BTC prices in terms of year-on-year returns. For example, Canada-based Bitfarms (BITF) surged 1,736%, while Hut 8 Mining (HUT) and Riot Blockchain (RIOT) rose 1,010% and 913%, respectively, in a year.

The performance of spot bitcoins and cryptocurrency-focused stocks in one year.Source: Econometrics

Nick, the founder of the cryptocurrency-focused communications service Ecoinometrics, called mining stocks an “obvious choice” and pointed out that they allow institutional investors to indirectly access the bitcoin market.

“I bet that many institutional investors have not yet set foot in Bitcoin spot trading, mainly for compliance reasons,” the analyst explain In an article published on September 27, it was added:

“It’s a bit like gold miners. At that time, it was very complicated to get physical gold. So these people might play away from the spot but trade stocks.”

These statements surfaced in the name of Morgan Stanley Report In its securities filing documents, it has more than doubled its exposure to Grayscale Bitcoin Trust (GBTC), a traditional investment tool for digital asset investors.

In detail, the Morgan Stanley European Opportunity Fund have As of July 31, 58,116 shares of Grayscale Bitcoin Trust or GBTC.

In July, Cathy Wood’s Ark Investment also Purchased more than 450,000 GBTC shares It is worth about 1.4 million U.S. dollars. Consistent with the performance of mining stocks, these investments indicate an increase in institutional interest in traditional investment products that focus on cryptocurrencies.

Nick added that as long as investors do not see viable alternatives, such as Exchange Traded Fund In the U.S

Zoom and storage

need Mining stocks rise Since most companies focus on two important prospects: scale and holding.

Like a marathon Reported in its unaudited August report It received 21,584 top Bitcoin mining ASIC machines from Bitmain in 2021, and added that it will currently receive 5,916 units in transit. Therefore, the company expects to operate at least 133,000 Bitcoin mining machines by the middle of next year.

At the same time, Marathon pointed out that it now holds 6,695 BTC, including the 4,812.66 BTC it purchased in January 2021.Therefore, its fair market value Bitcoin currently held by the Marathon It is now approximately 333.4 million U.S. dollars, which provides the company with sufficient funds to expand its future production scale.

Similarly, Riot Blockchain’s August report With the help of its 22,050 miners, its Bitcoin mining capacity increased by 451% year-on-year, and its hash rate capacity was 2.2 exahash per second (EH/s). The company mined 441 bitcoins in August 2021.

related: Since February, miners have accumulated $600 million worth of Bitcoin

Riot noted that it plans to put 25,650 Bitmain machines into operation by early September. It is currently building a new mining facility in Texas.

The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Every investment and trading action involves risk, and you should conduct your own research when making a decision.