Crypto Miners Rally As Bitcoin Climbs Above $64,000
HomeNewsCrypto Miners Rally As Bitcoin Climbs Above $64,000

Crypto Miners Rally As Bitcoin Climbs Above $64,000

Ruby Layram
Ruby Layram
31st Jan 2023

Crypto mining companies including the likes of Marathon Digital and Hut 8 have significantly outperformed other crypto-related stocks on Tuesday. The economics for crypto miners continues to be lucrative but appears elevated for now. 

Shares of crypto miners have the highest correlation to the price of Bitcoin. Much like the coin, crypto miner shares began the month with a bullish chart. On November 2, Bitcoin price surged above $64,000 and the price of crypto mining shares followed suit. 

This follows from an exciting October, in which Bitcoin rallied above $60,000 and Ethereum also rallied to an all-time high of $4,500. 

Bitcoin’s network hashrate- a measure of mining activity- dropped to 153 exahash per second from 185 exahash per second in October. Typically, a hashrate decline during a price rally means that the miners can make more profit from mining the coins. 

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With Bitcoin’s recent price surge and the hashrate dropping by about 18%, Bitcoin economics remain high. This is according to Lucas Pipes,an analyst at B Riley. 

In a recent research note, analyst Christopher Brendler estimated that for some miners, the gross profit after operating costs will be around 89.6% in 2021 and 90.8% in 2022. 

On Tuesday, Bitfarm’s stock climbed 12%, after achieving record high mining power in October. Shares of Marathon Digital rose 11% along with Hive Mining and Hut 8 climbed an impressive 10%. Unlike their rivals, Argo Blockchain failed to experience a price surge and instead fell by 1.7%. This came as a surprise to some investors after the firm reported record revenue in the third quarter. 

Miners are stockpiling Bitcoin

Amid the rally, crypto miners are stockpiling Bitcoin. This is driving a supply shock and setting the currency up for even higher gains. Since September, the 0-hop supply that determines whether miners are holding onto coins has risen by 50%. 

The supply shock caused by stockpiling has increased demand for Bitcoin and set the coin up for even further gains. Many are now predicting the coin to reach its $100,000 mark and perhaps trend even higher. 

Author Bio
Ruby Layram
Ruby Layram
Ruby is a writer for Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. Ruby has been a professional personal finance and investment writer for 2 years and is currently building her own portfolio of altcoins. She is currently studying Psychology at the University of Winchester, specialising in Statistical analysis.