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If you’d like to stake a claim in the world of crypto during this bear market — but don’t want to learn how to use a crypto exchange, manage cold wallet storage or otherwise worry about your investment — Bitcoin mining stocks could be the answer.
Investing in publicly held companies that mine Bitcoin offer exposure into the world of crypto without many of the risks related to holding crypto, which is a deregulated, decentralized asset.
On the other hand, Bitcoin mining stocks are regulated by the Securities and Exchange Commission, traded easily on public exchanges through brokers or investment apps, and work just like any other stock.
Are Bitcoin Mining Stocks a Good Investment?
Right now, the best Bitcoin mining stocks are down from their highs of last year. That means it’s important to evaluate the company’s fundamentals and do your best to determine the true value of the mining company before investing. When the crypto winter ends, these companies will be well-poised to profit as the value of the assets they are mining rise.
Canaan is rated as one of the best performing crypto mining stocks in recent months, showing the fewest losses during the crypto winter. A strong quarterly earnings report in the second quarter of 2022, coupled with it expertise in ASIC chips and the fact that its Bitcoin mining technology was one of the first to market gives it an advantage.
Bitfarms Ltd., founded in 2017 now has 50,000 miners in its operation with 9 farms across 4 countries. The company’s farms run on low-cost, hydro-electric energy — an advantage in an industry that’s been criticized for its lack of sustainability. Its proprietary software and innovative management team promises global expansion for the company, which could make it one of the best Bitcoin mining stocks to invest in today. Bitfarms also ranked as one of the best performing mining stocks, with the smallest declines in 2022.
Riot Blockchain stock is currently on the rise, following a report on the quantity of Bitcoin mined in August, which was down 15% from this time last year, but up from July 2022. With great potential in front of it, several analysts consider Riot undervalued right now.
HIVE Blockchain Technologies
Like Bitfarms Ltd., HIVE Blockchain Technologies uses green energy to mine Bitcoin and Ethereum. The company was the first publicly traded crypto mining company. According to Zacks data, HIVE may be significantly undervalued right now. Analysts expect returns within the next few months.
Hut 8 Mining Corp.
Analysts look favorably upon Hut 8 Mining Corp., with 4 analysts giving it a “buy” rating and one giving it a “hold,” according to CNN. The stock is currently trading at $2.09 and investors are giving it a median target of $4.75, with a high estimate of $5.00 and a low estimate of $3.89.
Hut 8 Mining stands out as one of the world’s largest crypto mining companies. The company shows outstanding ESG Performance compared to its peers, and showed strong quarterly revenue of $53.3 million in the first quarter of 2022, according to a company press release.
Stronghold has been identified by Bitcoinist.com as being one of the most undervalued Bitcoin stocks, which would make it a tremendous deal at its current price of $1.46.
As more mining companies aim to make Bitcoin mining more eco-friendly, Stronghold is taking an innovative approach by powering its operations through reclaimed coal refuse across Pennsylvania.
The largest Bitcoin mining company in the world, Core Scientific is currently focused on growth.
It sold most of its Bitcoin holdings in June 2022 to pay down debt and add to their arsenal of mining machines. The Austin, Texas-based company also entered into a $100 million common stock purchase agreement with B. Riley Principal Capital II. This will further increase the company’s liquidity as it continues to streamline operations.
As a result, seven out of seven analysts polled by CNN are calling the stock a “buy now.”
Marathon Digital Holdings
Besides Core Scientific, Marathon Digital Holdings is one of the largest Bitcoin mining operations in the U.S. Marathon has a mining facility co-located with Beowulf Energy in Hardin, Montana, enabling Marathon to retain 100% of its mined Bitcoin. The location gives Marathon extensive expansion capabilities. Unlike many of the stocks on this list, Marathon is not undervalued. However, experts say this can give the stock more long-term stability in its price.
Investing in Bitcoin mining companies can be as easy as speaking to a financial advisor, or using a stock trading platform such as TD Ameritrade, Fidelity or Robinhood. If you want to gain exposure into Bitcoin while the crypto winter is still driving prices down, investing in mining companies can be a simpler way to do so.
Bitcoin Mining Stock FAQ
- What is the best Bitcoin mining stock?
- 8 Bitcoin mining stocks stand out in our research as being solid investments. Hut 8 Mining, Stronghold, HIVE and Canaan are all undervalued in the eyes of investors right now, which makes them a deal. Due to their low trading prices, these stocks all provide the potential for great rewards with a low cost-of-entry. Even though Bitcoin trading and crypto-related investments, including crypto ETFs and mining company stocks, are still considered highly speculative and, as a result, high-risk, the low prices of these stocks can help investors get in the game with less risk. Additionally, since stocks are regulated by the SEC, they inherently carry less risk than investing directly in Bitcoin or other cryptocurrencies.
- Is it profitable to invest in Bitcoin mining?
- Experts say that Bitcoin mining remains extremely profitable in 2022. Bitcoins mined today are worth less than what they were worth in the early days of crypto, due to a process called halving, where the rewards for mining Bitcoins are reduced as time goes on. In 2009, miners would earn 50 BTC for every new block discovered and coin mined. The next halving is set to occur in 2024. Until then, miners receive 6.25 BTC for each coin mined. Even at this rate, Bitcoin mining can be extremely lucrative. Professional miners today can earn $20 million in Bitcoin per day or $600 million per month. Due to the price of mining machines, which can range from $2,000 to $20,000, according to BuyBitCoinWorldwide.com, large mining companies now dominate the industry. The best way for individuals to earn money from Bitcoin mining is to invest in mining company stocks, such as the ones listed above.
- Who is the biggest Bitcoin miner?
- Core Scientific stands as the largest Bitcoin mining company in the world.
Information is accurate as of Sept. 8, 2022.
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