Cryptocurrency mining stocks recover as bitcoin climbs back above $50,000

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Bitcoin mining.

  • Bitcoin mining stocks mounted a recovery on Friday after bitcoin found support at the $50,000 per-coin level.
  • Shares of Riot Blockchain, Marathon Digital Holdings, BitDigital, and other crypto-associated stocks all rose early Friday.
  • Bitcoin has been under pressure after Elon Musk reversed a decision to accept bitcoin as payment for Tesla vehicles.
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Cryptocurrency mining stocks recovered on Friday as bitcoin climbed back above the $50,000 per-coin level despite continued pressure on the cryptocurrency for its environmental impact.

Shares of crypto miners like Riot Blockchain, Marathon Digital Holdings, and Bit Digital all rose during premarket hours on Friday.

However, over the past month, shares of Riot Blockchain are down 62%, while shares of Bit Digital and Marathon Digital Holdings are down 37% and 61%, respectively.

The fall comes amid a breakdown in bitcoin’s price due to repeated questions about the cryptocurrency’s environmental drawbacks, competition from Ethereum and Dogecoin, and more recently, comments from Tesla CEO Elon Musk.

Musk announced Tesla would suspend vehicle purchases using bitcoin due to the environmental impact of the digital currency on Wednesday.

The billionaire CEO’s bitcoin “U-turn” caused the digital asset’s price to plummet below $48,000 per coin before mounting a mild recovery back above the $50,000 resistance level.

Bitcoin’s fall from grace came just a day after the US Securities and Exchange Commission said the digital currency is a “highly speculative” investment in a warning to investors.

“As such, investors should consider the volatility of bitcoin and the bitcoin futures market, as well as the lack of regulation and potential for fraud or manipulation in the underlying bitcoin market,” the SEC said in a statement.

Despite warnings from the SEC and an Elon Musk “U-turn,” bitcoin miners have continued to invest in their businesses.

Marathon Digital Holdings announced on Monday in its first-quarter earnings report that it produced 386 newly minted bitcoins in 2021 and increased the number of active miners in its operations to 6,800.

Last week, Bit Digital announced that it earned 1,013.40 bitcoin from mining operations in the first quarter and now owns more than 40,000 miners.

And on Monday, Riot Blockchain announced that it mined 206 bitcoin in April, a 90% jump from the 108 bitcoin the company mined in April of last year.

Shares of Riot Blockchain traded up 9.99%, while shares of Bit Digital and Mara Digital Holdings traded up 6.11% and 12.36% as of 9:40 a.m. ET.

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Bitcoin mining machine maker Canaan skyrockets 37% as bitcoin pushes past $1 trillion market cap for the second time

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  • Canaan’s stock jumped as much as 37% on Tuesday amid another run for bitcoin.
  • Bitcoin hit a $1 trillion market capitalization for the second time on Tuesday.
  • The mining machine maker Canaan recently announced it has a 100,000 order backlog for AISC mining machines.
  • Watch Canaan trade live here.

Bitcoin mining machine maker Canaan saw its stock skyrocket as much as 37% on Tuesday as bitcoin pushed past $1 trillion in market capitalization for the second time in its history.

Beijing-based Canaan was founded in 2013 by Nangeng Zhang. The company manufactures supercomputers for use in bitcoin mining and is known for having invented the world’s first ASIC(application-specific integrated circuit)-powered bitcoin mining machine.

Canaan’s stock has been on a historic run over the past six months, rising more than 1,000% as bitcoin continues its mainstream breakout. The mining machine maker traded at just $2.06 per share in September of last year.

Canaan’s stock has been on a tear as the company enjoys an increase in mining unit sales.

Canaan recently announced that it had received “purchase orders totaling more than 100,000 units of bitcoin mining machines from customers in North America.”

Mr. Nangeng Zhang, Chairman and CEO of Canaan said the company changed its “operations model” in 2021 which led to the rising sales.

Previously the company had been selling bitcoin mining machines mostly to individual mining operators, but in late 2020 the client base shifted to mainly publicly traded companies and bitcoin-focused investment funds.

This has led to more sizable orders with longer-term commitments as well as improved revenue forecasting for investors.

As an example of the mining machine manufacturer’s new business model, on February 7 Canaan sold 6,000 of its A1246 model AvalonMiners to Core Scientific.

And Hive Blockchain ordered some 6,400 next-generation bitcoin miners from the company on Jan 23.

Canaan traded up 37.13% as of 11:55AM ET on Tuesday.

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Riot Blockchain jumps 25% as bitcoin momentum continues and the company notches new mining milestone

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Riot Blockchain’s stock jumped as much as 25% on Thursday after the company hit a new milestone in its crypto mining operations amid a surge in bitcoin prices.

The company announced it achieved a 1.06 Exahash per second (EH/s) mining rate with 2,002 new S19 Pro Antminers from Bitmain.

Riot now has a total of 11,542 Antminers in operation after the new additions, leading to a nearly 26% increase in production over its prior operational hash rate.

“Exceeding 1 EH/s in hash rate capacity marks a major milestone for the Company,” said Jason Les, CEO of Riot Blockchain.  “While we are proud of this accomplishment, we view it as the successful completion of just one of many steps of our ongoing growth plan.”

Read more: A Ruffer portfolio manager invested a portion of his $4.8 billion fund in Bitcoin. Here’s what swayed him to bet on crypto – and the 2 other ways he’s hedging against worrying speculative bubbles

Jason Les came on as CEO on Monday, replacing Jeff McGonegal who has served as Riot’s CFO since 2003.

The newly minted CEO said he expects to more than triple the company’s mining capacity by the fourth quarter this year. Riot has 26,100 S19 Pro and S19j Antminers on order with Bitmain and expects to have a total of 37,642 miners in operation by the end of the year.

The bullish news from Riot comes as Bitcoin’s price pushed above $48,000 per coin on Thursday for only the second time in its history. The jump came after Mastercard and BNY Mellon announced support for the cryptocurrency on Thursday. Elon Musk also tweeted about bitcoin in a post that received well over 100,000 likes.

Bitcoin always has vocal critics, though. On Wednesday “Dr. Doom” economist Nouriel Roubini argued Bitcoin’s fundamental value is negative due to its environmental impact.

A study out of Harvard backed up Roubini’s claims, revealing there is “a scenario where each $1 of cryptocurrency coin value created would be responsible for $0.66 in health and climate damages.”

Read More: UBS says bitcoin is a bubble and too volatile to diversify a portfolio, unlike gold – here’s why the bank says it could end up ‘worthless’

Still, that hasn’t stopped investors from scooping up shares in the bitcoin miner. Share prices have risen 95% in the last month alone.

Even California’s state pension fund-California Public Employees’ Retirement System (CalPERS)-believes in Riot. The fund now holds 113,034 shares of the miner, according to SEC filings.

Riot traded up 24.95%, at $45.68, as of 3:33 p.m. EST on Thursday.

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