As The Bitcoin Price Rises, The Landscape For Public Mining Investment Improves

By Landon Manning

Despite many bitcoin miners suffering greatly during the 2022 downturn, BTC is rallying harder than ever and with it, many new opportunities are blossoming for investments in mining.

2022 began in the middle of a sharp crash from one of bitcoin’s all-time price highs, and this crash proved to be just one of several for the year as bitcoin’s value slipped below many previous records. All in all, it lost about 65% of its value across 2022. This price cycle had many causes, most especially a series of exchange collapses.

And yet, the new year has shown a strong start for bitcoin, with a stable December 2022 turning into growth reaching about $8,000 per bitcoin. With this rise, publicly-traded bitcoin miners have also seen a strong return from a year where many were listed as penny stocks. According to data aggregated by Bitcoin Magazine, many of the leading firms saw their values annihilated, with many going from leadership positions to stock prices of under $1. And this isn’t counting the firms that failed entirely.

But the key thing for possible investors to understand is that many such struggling miners did not fail. The Bitcoin space is no stranger to huge amounts of fluctuation, growing and dying back at wild margins, and those that choose to specialize in this industry can gain vast experience from these hungry times. Besides investing directly in the crypto asset, savvy entrepreneurs have the option of supporting businesses like this to gain other forms of exposure to the world of bitcoin. And the world of bitcoin mining is showing promising strides in the organization of capital.

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The opening months of 2023 have already seen several specific trends that suggest positive growth. Miner Hut 8, one of the companies that fell below this $1 valuation, carried out a merger with US Bitcoin Corp. that promised to “bring together Hut 8’s operational track record and diversified revenue streams with US Bitcoin’s scalable mining sites, sizable hosting business, and industry-leading managed infrastructure operations.” 

In other words, some hardened industry veterans are getting a new advantage in terms of resources. Stronghold, another listed firm, has also undergone restructuring, reaching a new credit agreement with Whitehawk Finance with greatly increased liquidity and flexibility. 

Still, despite all of these positive auguries, it must be noted that a potential investor in bitcoin mining has to be smart about their choices. As stressed by Glyn Jones, CEO of Icebreaker Finance, specific clues in the daily operations and current status of mining companies can show how well positioned such operations are to take best advantage of a continuing rally. 

A rally in the value of bitcoin will ultimately lead to a higher hash rate and, therefore, lower revenue per mining unit, and some firms will be able to flourish in this environment much more efficiently. It is up to the individual to decide how to best evaluate a potential bonanza, but one thing is clear: The mining industry offers a lot of potential for anyone considering new bitcoin exposure.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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