As a seasoned crypto investor with a knack for spotting trends and opportunities, I find myself intrigued by the recent surge in Bitcoin mining stocks. After weathering the storm following the halving event, it seems that the crypto mining industry is poised for a comeback. The potential benefits from the push into artificial intelligence (AI) are particularly appealing to me, as an investor who has witnessed firsthand the exponential growth of AI in various industries.
Monday witnessed an impressive 25% surge in shares of Bitcoin mining companies, with Bitcoin’s price breaking through the $70,000 barrier. This recent upward trend occurs in anticipation of the US election results, as some economic indicators predict a potential win for Donald Trump. Meanwhile, the growing interest in artificial intelligence (AI) among BTC miners presents an additional opportunity for increased revenue.
Compared to other cryptocurrency companies, Bitcoin mining stocks have struggled over the last few months. After the Bitcoin halving event, BTC miners faced a difficult period due to a 50% decrease in rewards and increasing operational expenses. Yet, it appears that the tough times may be over for the crypto mining sector.
On October 28th, shares of leading U.S.-based Bitcoin mining companies experienced a significant increase in value, with gains ranging from 12% to 20%. Notably, Marathon Digital’s stock (NASDAQ: MARA) rose by 11.9%, Hut 8 Corp (NASDAQ: HUT) saw a surge of 15.5%, and Core Scientific (NASDAQ: CORZ) experienced a rise of 6.21%. These upward trends were observed amid a general upswing in the stock market on Wall Street. Mitchell Askew, an analyst at Bitcoin mining firm Blockware, commented on this situation.
Higher deficit spending and reduced interest rates worldwide are increasing overall financial fluidity. However, investors are concerned about potential long-term high inflation due to these actions, as indicated by subpar returns on government bonds following the September rate reduction.
As a crypto investor, I’ve noticed that some Bitcoin miners who found it difficult to make a profit after the halving event in April have decided to leave the market. These miners were putting significant selling pressure on the market, but their departure might actually be beneficial for Bitcoin’s price. This is suggested by the upcoming third increase in mining difficulty, as pointed out by Askew.
Bitcoin Mining Firms Benefits from AI Push
As a dedicated crypto investor, I’ve noticed that leading Bitcoin miners have skillfully adapted their operations to keep pace with the escalating needs of the Bitcoin mining sector. It appears that many Bitcoin mining firms are thriving by broadening their horizons into Artificial Intelligence (AI) and high-performance computing, as suggested by Askew.
On October 28th, several mining stocks experienced substantial growth, with Bitdeer Technologies from Singapore taking the lead by rising 24.4%. Additionally, IREN and Gryphon Digital Mining also had impressive performances, increasing by 17.8% and 16.5%, respectively.
One of the top-performing Bitcoin miners’ who has benefitted from the AI transition early is Core Scientific. The CORZ stock is up by a massive 312% since the beginning of 2024 and is currently trading at $14.20 as of Monday’s closing. This summer, Core Scientific signed a 12-year deal with AI hyperscaler CoreWeave, potentially generating up to $3.5 billion in revenue. The mining company has now secured three contracts, adding 70MW and 112MW deals to its initial 200MW agreement.
On the morning prior to Monday’s market opening, analyst Jonathan Peterson from Jefferies recommended buying shares of Core Scientic, predicting a price of $19 for the company. In his report, he expressed this viewpoint.
A remarkable turnaround narrative unfolds after bankruptcy, with the company utilizing its substantial energy resources, originally intended for Bitcoin mining, to establish cutting-edge AI data centers instead.
Adam Sullivan, CEO of Core Scientific, expressed their intention for substantial expansion in the upcoming year. “Securing another 500MW or 1GW of contracts within the next few years would propel us from being a $2.5 billion entity to possibly a company valued between $25 and $30 billion,” Sullivan stated.
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2024-10-29 12:30