Bitcoin rally powers mining stocks higher

Crypto mining stocks are performing well over a five-day period following a rise in digital asset valuations as mixed operational cost outcomes threaten sustainability


Mindscape studio/Shutterstock, modified by Blockworks


When digital asset valuations surge, crypto mining stocks naturally benefit, much like other commodity producers.

Data shows that major firms including Marathon Digital (MARA), Bitfarms (BITF) and Riot Platforms (RIOT) are posting double-digit gains over the past five days, between 17% and 19%.

Speculation for crypto mining stocks has been fueled by the crypto market rally at the beginning of the week, which saw the price of bitcoin (BTC) cement a new yearly high above $35,000.

Miners faced significant challenges last year attributable to rising electricity costs, the Ukraine-Russia conflict and falling crypto prices — sending respective share prices tumbling.

In the face of those challenges and by the beginning of this year, miners managed to recover substantial losses in their valuations by August — clawing back some 150% to 200% in year-to-date terms.

As a result, over the past 12 months, MARA has exceeded its earnings per share (EPS) estimate in 25% of instances, whereas the broader crypto mining industry has outperformed the EPS estimate 61.8% of the time during the same timeframe, TipRanks data shows.

BITF and RIOT have also managed to beat similar EPS estimates leading to a rush of new investments in the wake of the crypto industry’s rising valuations.

Operating headwinds

It comes as the spot prices for existing bitcoin ASICs continue to set all-time lows, bitcoin mining consulting firm BlocksBridge noted in its weekly miner note.

Cheaper mining equipment is helping to drive down some operational costs in the face of bitcoin’s increasing hashrate — a sign of heightened competition amongst miners, Blockworks was previously told.

While miner profitability took a hit last month due to fresh local highs in those hash rate figures, it appears the sector is retaining resiliency.

Various previous-generation models, which offer a hash rate between 25 and 38 J/TH — including the Antminer S19, Avalon 1326, and WhatsMiner M30S+ — are now priced below $10 per TH/s, BlocksBridge said.

Still, it remains to be seen whether miners can sustain their good fortunes in tandem with rising operational costs.

According to data from the US Bureau of Labor Statistics, electricity prices rose 1.1% from the month of August through to September, putting further strain on households and businesses.

However, on Monday, US-regulated digital asset services firm BitOoda noted in its weekly report Coal plants need to secure fuel a year in advance and are now accumulating more coal than they can manage. 

Current coal stock levels are high compared to recent years, despite a 29 gigawatt reduction in coal capacity since 2020. This could put downward pressure on power prices in the US if plants have to operate uneconomically to deplete excess coal, BitOoda said.

“A mild winter would likely result in lower prices with coal stocks at those high levels,” the digital asset services firm said.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png


With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.


Launching cryptocurrencies the old fashioned way may soon make a return


Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug


NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.


EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down