What happened
Today, Bitcoin miners TeraWulf (WULF 21.94%), Riot Platforms (RIOT 9.99%), and Marathon Digital (MARA 15.03%) are showing serious price jumps, as Bitcoin’s price surged 8.8% higher in the past 24 hours. TeraWulf’s stock’s intraday moves peaked at a 24.5% gain this morning, while Riot rose as much as 12.8%, and Marathon Digital posted a peak price increase of 18.5%.
The ongoing banking crisis, exemplified by First Republic Bank‘s precarious situation, has investors seeking alternatives to the traditional financial system. Many are turning to cryptocurrencies like Bitcoin, which is great news for companies that make a living from minting new Bitcoin tokens.
So what
As old-school banks continue to stumble in the late stages of this inflation crisis and the federal interest rate increases it inspired, the cryptocurrency market is enjoying a resurgence. These three Bitcoin miners all benefit directly from that crypto market trend.
- Marathon, ambitious and striving to be the largest Bitcoin miner in North America, focuses on scaling its operations and maintaining a large-scale mining operation. With more than 12,200 Bitcoins on its balance sheet, Marathon is one of the leading cryptocurrency holders among public companies today, behind only Michael Saylor’s MicroStrategy and its 140,000 Bitcoins.
- TeraWulf is the environmentally conscious newcomer to the scene, focusing on sustainable, eco-friendly mining operations. It’s using cutting-edge technology and partnering with some of the biggest names in the industry. It’s also the youngest, smallest, and least heavily traded company on this list, Hence, it is more volatile and sensitive to Bitcoin’s price swings — and even more so when the financial system itself is the chief reason for Bitcoin’s price moves. It has mined roughly 1,000 Bitcoins so far, including 233 in March 2023.
- Riot Platforms, a veteran in the space, aims to build a sustainable, scalable Bitcoin mining operation while investing in various blockchain technology companies. You could see it as a middle ground between TeraWulf’s intense environmental focus and Marathon’s larger scale. Riot’s Bitcoin reserves stand at approximately 7,000 coins today.
So when the banking sector buckles at the knees again and crypto investors double down on the digital currency’s ability to keep trucking with or without support from dollar-denominated banks, these three crypto miners are ready to outperform Bitcoin’s own price moves. For the record, First Republic shares plunged as much as 41% lower on Wednesday as the bank lost more than $100 billion of customer deposits.
Now what
Given the current banking crisis and growing interest in cryptocurrencies, these Bitcoin miners are well positioned for potential growth. Today’s price jumps make sense from that point of view.
However, there are significant differences between them. Investors should keep a close eye on the evolving crypto market as a whole and consider the merits of each Bitcoin-mining company.
TeraWulf may be the obvious choice for environmentally conscious investors. Riot Platforms has a versatile growth strategy. Marathon Digital boasts grand ambitions for large-scale mining operations. So each miner presents a unique value proposition for investors seeking exposure to the increasingly relevant cryptocurrency sector.
At the same time, keep in mind that all of these digital mining stocks are inherently riskier than simply owning Bitcoin. They all see long-term value in owning Bitcoin and attempt to boost that value by growing their digital currency holdings over time. That’s the upside.
On the downside, the Bitcoin ownership is wrapped in many layers of additional risk. Investors could be left penniless if their favorite Bitcoin miner runs out of operating cash, or its mining facilities are damaged by a natural disaster, or the management team runs off to Belize with a digital wallet full of embezzled Bitcoin — I mean, most of these extreme risk scenarios will never play out, but you can never be sure.
So tread lightly around these exciting price jumps. Crypto-mining stocks are also prone to sudden price drops when Bitcoin is having a bad day. This is one of the most volatile sectors on Wall Street these days.
