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Bitcoin mining companies offer investors additional access to the cryptocurrency market, just as gold mining companies provide increased access to precious metals.
Over the past month, as the price of bitcoin surged 26% from a low of $18,930 to its current price, stock prices of cryptocurrency mining companies surged 120% over the same period that traders tried to access the crypto market.
According to Yahoo Finance, Marathon Digital Holdings (MARA) took the lead with a price increase of 124.12%. It is followed by Core Scientific (CORZ) with a gain of 110.39%, 98.95% for Hut 8 (HUT), and a 96.69% price increase for Riot Blockchain (RIOT).
Judging by the over-performance of these stocks, especially compared to the 26% rise for Bitcoin and the 67.8% rise for Ether (ETH), it would appear that crypto mining stocks have been heavily oversold and caught up with the market.
However, not everything is so smooth as, despite the income growth of all the companies mentioned, an increase in losses was reported, mainly due to losses from the impairment of their cryptocurrency assets.
Core Scientific has reported a 1,601% increase in self-mined bitcoins since the beginning of the year in its Q2 results report released on Thursday, bringing the total amount of bitcoins mined to 6,567 BTC. Driven by higher digital mining and hosting revenues, the company's second-quarter revenue rose 118% year-on-year to $164 million.
Compared to last year, the firm's BTC production also increased, according to Marathon Digital's Q2 results. At the same time, despite the difficult macroeconomic circumstances, the company mined 707 BTC for the quarter.
Hut 8 Mining Corp. realized a 71% increase in the number of BTC mined on an annualized basis. Q2 revenue increased 30.7% year-on-year to $43.8 million.
Despite recent growth in revenue and mining capacity, all of the crypto mining stocks mentioned above remain well below their 2021 highs and have a long way to go before they can regain their former glory. And as cryptocurrency prices continue to struggle amid rising inflation, interest rates, and energy costs, the current mining stock rally could be a challenge to sustain itself.
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