Bitcoin Mining Stocks Rocket 24% On Macro Climate, AI Play: Analyst

Share prices of Bitcoin miners soared as much as 24.4% on Oct. 28 as Bitcoin rallied above $70,000 — with an analyst pointing to an increasingly favorable macroeconomic climate and miners’ continued diversification into AI.

“Deficit spending and lower interest rates are driving global liquidity higher [while] investors are fearful of high inflation over the long term, as evidenced by poor performance from treasury bonds since the Sept[ember] rate cut,” Mitchell Askew, head analyst at Bitcoin mining firm Blockware told Cointelegraph.

As such, investors are turning to the Bitcoin markets where Bitcoin mining stocks are trading at a “beta.”

Some Bitcoin miners are also benefiting from diversifying into AI and high-performance computing sectors, Askew added.

Singapore-based Bitdeer Technologies was the biggest winner on Oct. 28 with a 24.4% rally, while the Nasdaq-listed IREN, Gryphon Digital Mining and Hut 8 increased 17.8%, 16.5% and 15.5%, respectively, Companies Market Cap data shows.

Marathon Digital and CleanSpark had double-digit gains of 11% and 10.2%, while Riot increased by 9.5% on the day.

TeraWulf and Core Scientific also performed strongly on Oct. 28.

Askew said the miners that became unprofitable following April’s Bitcoin halving event have since “capitulated.” 

They were a “significant source of sell pressure,” so the relief of this is bullish for price action, Askew said. 

“This is evidenced by the fact that mining difficulty is about to increase for the 3rd time,” Askew pointed out.

Change in Bitcoin mining difficulty since Jan. 2024. Source: Blockware Solutions/ Glassnode

On the other hand, “surviving miners are healthy, and profit margins for miners with the latest equipment are solid,” said Askew, adding: “We are so back".

It comes as Argentina, the United Arab Emirates and Ethiopia recently confirmed they’re using state-owned resources to mine Bitcoin, Matthew Sigel, head of digital assets at VanEck, noted in an Oct. 28 CNBC interview.

Sigel highlighted that BRICS member nations are planning to settle international trade with Bitcoin to “circumvent” the United States dollar.

Meanwhile, Bitcoin crossed the $70,000 milestone on Oct. 28 for the first time since June 10, following two weeks of strong net inflows into US spot Bitcoin exchange-traded funds, totaling over $3 billion.

Several crypto traders also claim Bitcoin saw a “golden cross” — a bullish chart pattern in which its 50-day moving average crosses above its 200-day long-term moving average — indicating the potential for a price breakthrough.

VanEck forecasts Bitcoin will hit $2.9 million per coin by 2050. 

For that to occur, Bitcoin would need to increase at a 16.6% compounded annual growth rate over the next 25 years.

Source: https://cointelegraph.com/news/bitcoin-miners-soar-24-percent-macro-conditions-ease