Bitcoin Price Boosts Miners, as Hashrate Climbs
Share prices of US-traded crypto mining firms finished the week higher on Friday, bolstered by short-term risk-on trader sentiment for digital assets
Exclusive art by Axel Rangel, modified by Blockworks
The majority of crypto-related equities finished up in positive territory last week, with US-traded mining firms gaining distance from historical lows set at the end of last year.
Bitcoin is also pushing for further gains on the day after closing the session roughly 3.2% higher to $23,800 Sunday, while its market capitalization also leaped 3.3% to $458.6 million.
Ether clocked a higher daily close above $1,645, gaining 4.5% alongside a $10 billion uplift to its market value. Bitcoin and ether are now up 43.9% and 37.6% year-to-date respectively.
Bitcoin miners continue to rise alongside market sentiment, witnessed by the positive jump in spot prices for digital assets as the beleaguered sector takes stock of a shifting risk-on attitude.
Hong Kong-based Bit Mining (BTCM), listed on the New York Stock Exchange, posted a Friday close of 7.6% to $3.55 while Chinese miner SOS ADR, also listed in New York, rose almost 2%.
NASDAQ-listed mining firms Bitfarms, Stronghold Digital, Cipher Mining, Cleanspark and Bit Digital rose between 2.8% and 16.6% on Friday.
Marathon Digital and Iris Energy were the US’s main outliers in the bitcoin mining category, shedding 8.3% to $8 and 4.3% to $2.10 respectively by the end of last week’s closing bell.
Greenidge Generation Holdings, which also fell 0.8% on Friday, has begun to reverse prior losses, with a 2.6% gain in after-hours trading to $0.90.
Prices for most US-traded miners have more than doubled this year, following daily lows set at the end of 2022. It comes as the average mining difficulty for bitcoin hit a new all-time high beginning Jan. 18 — now 41% greater than a year ago, data from YCharts show.
Global hashrate — a measure of bitcoin network security — hit a fresh all-time high on Friday at 316 exahashes per second (EH/s), while miners have until Feb. 11 before the next difficulty adjustment will make it an estimated 4.3% harder to mine.
Both a rise in the price of bitcoin and anticipation of cheaper power prices this year are beginning to erase previous sector sell-offs that had begun amid last year’s Q2 market rout.
Read more: Going Nuclear: Bitcoin Mining’s Potential Energy Future
Other sectors across the industry also posted positive gains Friday, with exchanges Coinbase (COIN) and Robin Hood (HOOD) up 15.7% and 7.8% respectively. COIN has continued to outperform both the broader tech sector and bitcoin, up an eye-watering 80% since the new year began.
Analyst fears over a global recession remain firmly entrenched, with several leading indicators now pointing to declining economic growth in the second quarter of this year.
The impact for risk-on assets, such as crypto, would likely result in further market sell-offs as traders seek to book profits and allocate capital into cash, large market cap equities and gold.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
