Why Are These 3 Bitcoin Mining Stocks Surging Today?
Investors in a range of cryptocurrency mining stocks are winning big today. As of 1:45 p.m. ET, CleanSpark (NASDAQ: CLSK), Bit Digital (NASDAQ: BTBT), Bitfarms (NASDAQ: BITF), and TeraWulf (NASDAQ: WULF) investors have seen gains of 7.8%, 7.2%, 4.5%, and 1.8%, respectively, from yesterday's close. Interestingly, each of these companies has given up some of their gains from their intraday highs.
These moves appear to be driven by a resurgence in Bitcoin prices today. The price of Bitcoin, the most important factor in terms of revenue generation and profitability for these crypto miners, is up 1.8% over the past 24 hours at the time of writing. Additionally, it appears many crypto miners remain bullish on the outlook for Bitcoin prices over time, with the upcoming Bitcoin halving in 2024 being the key catalyst some in the sector are looking to for growth.
Bitcoin prices have traded within a relatively narrow range in recent months, and today's rather significant swing to the upside has been somewhat of an outlier. That said, any sort of significant surge in Bitcoin prices often leads to even greater moves higher in Bitcoin miners, due to the leverage these companies provide to the underlying price of Bitcoin. A 2% surge in Bitcoin often leads to 4% to 8% moves in Bitcoin miners, as these companies benefit disproportionately from higher Bitcoin prices (revenue is denominated in Bitcoin, while debt is mostly denominated in dollars).
Source Fool.com
