If you want to invest in cryptocurrency during this bear market but don’t want to learn how to use a crypto exchange, manage cold wallet storage, or panic when bitcoin experiences a price crash, bitcoin mining stocks could be the solution.
Investing in publicly traded companies that mine bitcoin provides exposure to the world of cryptocurrency while avoiding many of the risks associated with holding cryptocurrency, which is a deregulated, decentralized asset.
But did you know that Bitcoin mining stocks, on the other hand, are regulated by the Securities and Exchange Commission, easily traded on public exchanges through brokers or investment apps, and function similarly to any other stock? Yes, Bitcoin mining stocks check all those boxes.
Are Bitcoin Mining Stocks a Good Buy?
The best bitcoin mining stocks are currently trading lower than their year-ago highs. That is, before investing, it is critical to evaluate the company’s fundamentals and do your best to determine the true value of the mining company. When the bear market is behind us, these companies will be well-positioned to profit as the value of the assets they mine rises.
Bitcoin has a total supply that is capped at 21 million and over 19 million bitcoin have already been mined. Factor in the millions of bitcoin that have been lost forever in dead wallets and the value of companies that specialize in mining bitcoin would naturally increase.
Bitcoin Mining: The Ultimate Pick and Shovel Strategy?
A pick-and-shovel buy is an investment strategy in which the underlying technology required to produce a good or service is invested in rather than the final output. It is a method of investing in an industry without having to bear the risks associated with the final product’s market.
So, with Bitcoin mining stocks investors are making a bet that bitcoin will be around for a long time and despite fluctuations in price the equipment and technology needed to produce it will be in high demand.
Let’s take a look at the top 8 Bitcoin mining stocks on the NASDAQ that you can invest in today.
Canaan has been rated as one of the best performing cryptocurrency mining stocks in recent months, with the fewest losses during this bear market. A strong quarterly earnings report in the second quarter of 2022, combined with its expertise in ASIC chips and being one of the first to market with bitcoin mining technology, gives it an advantage.
Bitfarms, founded in 2017, now employs 50,000 miners across nine farms in four countries. The farms are powered by low-cost hydroelectric energy, which gives the company an advantage in an industry that has been chastised for its lack of sustainability. Its proprietary software and innovative management team promise global expansion, making it one of the best bitcoin mining stocks to invest in today. Bitfarms were also one of the best performing mining stocks in 2022, with the smallest declines.
Riot Blockchain stock is currently on the rise as a result of a report on the amount of bitcoin mined in August, which was 15% lower than this time last year but 15% higher than in July 2022. With so much potential ahead of it, several analysts believe Riot is currently undervalued.
HIVE Blockchain Technologies, like Bitfarms Ltd., mines bitcoin and ethereum with green energy. The company was the first to go public with its crypto mining operations. HIVE may be significantly undervalued right now, according to Zacks data. Analysts anticipate returns in the coming months.
Folks in the know like Canadian mining firm Hut 8. With four analysts recommending a “buy” rating and one recommending a “hold,” according to CNN. The stock is currently trading at $1.88, with a median target price of $4.75, a high estimate of $5.00, and a low estimate of $3.89.
Hut 8 Mining is one of the world’s largest cryptocurrency mining companies. According to a company press release, the company has outstanding ESG Performance when compared to its peers and reported strong quarterly revenue of $53.3 million in the first quarter of 2022.
Note: At the time of this article the Hut 8 website was down. No further information was available but stock was still listed and trading on the NASDAQ.
Stronghold has been identified as one of the most undervalued bitcoin stocks by bitcoinist.com, which would make it a fantastic deal at its current price of $0.96.
As more mining companies strive to make bitcoin mining more environmentally friendly, Stronghold is taking an innovative approach by powering its operations across Pennsylvania with reclaimed coal refuse.
Core Scientific, the world’s largest bitcoin mining company, is currently focused on expansion.
It sold the majority of its bitcoin holdings in June 2022 to pay down debt and add to their mining machine arsenal. B. Riley Principal Capital II also entered into a $100 million common stock purchase agreement with the Austin, Texas-based company. This will increase the company’s liquidity even further as it continues to streamline operations.
As a result, CNN polled seven analysts, and seven of them said the stock is a “buy now.” The current price for CORZ is $1.05.
Marathon Digital Holdings Inc.
Marathon Digital Holdings, in addition to Core Scientific, is one of the largest bitcoin mining operations in the United States. They have a mining facility in Hardin, Montana, that is co-located with Beowulf Energy, allowing Marathon to keep 100% of its mined bitcoin. Marathon’s location allows for significant growth. Marathon, unlike many of the stocks on this list, is not undervalued. However, experts believe that this will give the stock more long-term price stability.
Speaking with a financial advisor or using a stock trading platform like TD Ameritrade, Fidelity, or Robinhood can make investing in bitcoin mining companies simple. Investing in mining companies can be a simpler way to gain exposure to bitcoin while the crypto winter continues to drive prices down. Yet, the same care and caution should be taken when considering investing in Bitcoin mining stocks as one would exercise when investing in any product or service.
People also ask
Which bitcoin mining stock is the best?
In our research, these Bitcoin mining stocks stand out as good investments. Hut 8 Mining, Stronghold, HIVE, and Canaan are all currently undervalued in the eyes of investors, making them a good buy. Because of their low trading prices, these stocks all have the potential for high returns at a low cost of entry.
Despite the fact that bitcoin trading and crypto-related investments, such as crypto ETFs and mining company stocks, are still considered highly speculative and thus high-risk, the low prices of these stocks can help investors get in the game with less risk.
Furthermore, because stocks are regulated by the SEC, they are less risky than investing directly in bitcoin or other cryptocurrencies.
Is investing in bitcoin mining profitable?
According to experts, bitcoin mining will still be extremely profitable in 2022 and beyond. Bitcoins mined today are worth less than they were in the early days of cryptocurrency due to a process known as halving, in which the rewards for mining bitcoins are reduced over time.
Miners would earn 50 BTC for each new block discovered and coin mined in 2009. The next halving is scheduled for 2024. Miners will receive 6.25 BTC for each coin minted until then. Bitcoin mining can be extremely profitable even at this rate.
Professional bitcoin miners can now earn $20 million per day, or $600 million per month. Large mining companies now dominate the industry due to the high cost of mining machines, which can range from $2,000 to $20,000, according to BuyBitCoinWorldwide.com.
Individuals can make the most money from bitcoin mining by investing in mining company stocks like the ones listed above, rather than trying to compete with giant commercial bitcoin mining operations.
Who is the biggest bitcoin miner?
Core Scientific stands as the largest bitcoin mining company in the world.
What will one bitcoin be worth in 2030?
Giving longer-term price targets for bitcoin in 2030, DigitalCoinPrice suggested the coin could trade at a staggering average price of $103,524. While the algorithmic forecaster did not provide a bitcoin price prediction for 2040 or 2050, it did forecast that the coin could be worth $128,740 in 2031.