After a historically bad year for bitcoin mining, a strong pushback in bitcoin led to a spike in publicly traded companies in penny stocks in January.
2022 was the worst year on record for Bitcoin mining. All markets suffered unprecedented reckless consequences by central banks around the world. However, the mining sector of the Bitcoin economy took a beating and hurt last year because Bitcoin is volatile and mining acts as a leveraged bet on Bitcoin itself. , relegated to trading as literal penny stocks.
But thanks to an unexpectedly strong start to the new year, investors have seen bitcoin mining stocks come back to life. will be However, how long this rise will last is an open question.
In this article, we summarize the state of Bitcoin mining at the start of this new year, the tragedies left by the previous year, and the opportunities ahead.
New Year Mining Rally
2023 is off to a strong start for listed Bitcoin mining companies.
According to TradingView market data, companies like Riot Platforms, Marathon Digital and CleanSpark have seen profits of between 40% and 110% since the beginning of the year. These stock price spikes are largely due to the sustained rise in the Bitcoin price.Major cryptocurrencies since New Year’s Day Earn 44% or moreAs a result, the economics of mining are also improving. hash value Jumped 25% even with a set hashrate (usually hash value goes down as hashrate goes up) New all-time high in January.
Overall, however, bitcoin miners ended 2022 in a very bearish tone.
Overview of Penny Stocks
Penny stocks intuitively suggest securities that trade at a market price of just a penny. In fact, the stock prices of many Bitcoin mining companies have fallen to 1 cent. But officially meaning Penny stocks are stocks of small companies that trade for less than $5 per share. Penny stocks can be traded on large exchanges like Nasdaq, which lists many Bitcoin mining companies. However, most of them are traded via over-the-counter (OTC) trading.
That said, some bitcoin mining companies would have been lucky if their shares were above $5 by the end of last year. The data in the next section shows that many, if not a few, mining companies are trading below $1 after their market capitalization surged into the billions.
Bitcoin mining penny stock data
Bitcoin Around 65% reduction by 2022Miners weren’t so lucky, even though it wasn’t the worst bear market drop in Bitcoin’s history. The line chart below shows the actual share price of a selected group of major mining companies over the 2022 period. Even one glance at the visuals reveals a common theme: “falling… a lot.”
For these poor companies, the worst came at last. By the end of 2022, the stock prices of nearly a dozen companies have fallen below $1. The list below consists of Bitcoin mining companies. Trade under $1 by the end of last year.
- Core Scientific: $0.20
- Hut 8: $0.87
- Terrawolf: $0.58
- Mawson: $0.28
- Desihost: $0.47
- BIT Mining: $0.20
- Argo: $0.44
- Crypto: $0.62
- Bit Digital: $0.56
- Greenwich: $0.37
- Fortress: $0.46
After reviewing all the above data, you may be wondering, “Does Bitcoin mining stock price matter?” Clearly not for Bitcoin’s long-term success. The chaos that unwinds bull market risk-taking, greed and general excess is no fun. Hopefully the worst is over.
road to pink slip
How did the once-booming public Bitcoin mining sector end up in penny stock status?
After a surge to the total market value of over $100 billion, the Bitcoin mining company crashed. This impact is somewhat inevitable if Bitcoin itself is crashing. The mining business is costly, capital intensive and highly competitive. When market conditions are less than perfect, the head metaphorically begins to roll.
It’s also worth noting that the macroeconomic headwinds facing all markets have effectively killed all tech markets around the world. Bitcoin mining had no chance of escaping bloodshed.For example, meta is worst performer Apple, which dominated the weight of the same S&P 500 index in last year’s Standard & Poor’s 500 Index by about 6%, also ended last year. steep descent.
But beyond macroeconomic conditions, Bitcoin miners are not immune from greedy and reckless business decisions. A significant portion of the publicly disclosed mining hash rate growth and mining company valuations are being run by over-leveraged investors and operators making high-risk bets in the same style as other now bankrupt “cryptocurrency” companies. directly related to the person. A miner becoming a penny stock or filing for bankruptcy is the result of the same qualitative choice.
new year miners
Many new mining teams that have entered the market in the last few years have failed to reach 2023. Is the bear market over? no one knows However, even in the face of bankruptcies, lawsuits, board resignations, delisting, etc., miners who are still hashing today may continue to hash everything.
Hopefully the lessons from the last bull market’s greed and regression won’t be forgotten anytime soon, but this author doesn’t hold his breath.
This is a guest post by Zack Voell. Opinions expressed are entirely his own and do not necessarily reflect those of his BTC Inc or Bitcoin Magazine.