Bitcoin mining companies outperformed Bitcoin by a huge margin amid the recent bullish price action in the top cryptocurrency.
The average year-to-date stock price gains in 2023 among the top nine public Bitcoin mining firms by market capitalization stood at 257.14%. The figure is almost three times higher than Bitcoin’s (BTC) gain in the same period.
The higher gains represent the leveraged beta effect that mining stocks enjoy. Leveraged beta suggests that during Bitcoin upside, these stocks outperform, whereas when Bitcoin slumps, they face deeper downside risk.
Due to its high leveraged beta, Bitcoin’s price performance will remain a crucial factor in determining the direction of mining stocks.
The trends within the mining sector show that miners are positioning themselves for the long term by buying more machines. However, they have yet to exhibit accumulation levels that match previous bull markets, suggesting that the uptrend in the stocks could stall in the medium term.
Multiple mining companies expanded in the past month, which added to the positive sentiments and long-term value of the stocks. At the same time, the mining conditions improved with a dip in hash rate and an increase in price.
However, on-chain data shows miners unloaded a significant portion of their holdings, which could be a sign of a downturn in the near future.
Mining companies make expansive moves
The public mining companies in the United States made aggressive moves in June, signaling long-term strength in the industry.
Hut 8 Mining (HUT8) mer
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Author: Nivesh Rustgi
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