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

GettyImages 1020194172
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.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

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.

Read the original article on Business Insider

Bitcoin is not overbought and could reach $75,000 before the current bull market ends, research from Kraken says

GettyImages 1169764411
Citi said bitcoin is at a “tipping point.”

  • Bitcoin is not yet in “overbought” territory and could reach $75,000 before the current bull cycle ends, Kraken says. 
  • According to historical price movements of bitcoin, the first quarter of 2021 could be met with massive gains for the token. 
  • Bitcoin is up 62% year-to-date as of Friday as it hovers just below $48,000.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin could gain much higher before the current bull market ends based on historical price movements, says a Kraken Intelligence market report published Friday.

Although bitcoin is quickly approaching resistance, it remains several tens of thousands of dollars away from entering into “overbought” territory, Kraken said. If bitcoin were to surpass $75,000 in the next few months, historical price action suggests bitcoin would then be close to the top of the cycle. 

The cryptocurrency has pulled back from its all-time high above $58,000 on February 21, but it still finished the month 37% higher. The coin is up 62% year-to-date as of Friday as it hovers just below $48,000.

According to Kraken, bitcoin is now trending in a manner most similar to the first quarter of 2013, bitcoin’s best first quarter on record. If the trend continues, the first quarter of 2021 “could be a historic quarter with a relatively outsized return.”

“By plotting a logarithmic growth curve that connects BTC’s prior market cycle tops (resistance) and bottoms (support) and by making assumptions about how severe BTC will correct upon hitting a cycle high, one will find that BTC likely has plenty of upside before entering a bear market,” the report says. 

The report comes as some investors voice concerns that bitcoin’s rapid acceleration is a clear sign the cryptocurrency is in a bubble waiting to burst. Michael Burry said the coin is a “speculative bubble that poses more risk than opportunity” in a tweet Monday that has now been deleted. 

On Wednesday Kraken CEO Jesse Powell told Bloomberg a $1 million as a price target within the next 10 years is “very reasonable.” 

 

Screen Shot 2021 03 05 at 8.32.34 AM
Read the original article on Business Insider

Bitcoin vs. Gold: 10 experts told us which asset they’d rather hold for the next 10 years, and why

bitcoin vs gold 3
Bitcoin vs. Gold

As bitcoin continues its meteoric rise, breaching new records and crossing the $1 trillion market capitalization mark in just the last week, more investors are assessing the longstanding comparison between the famous cryptocurrency and an equally well-known asset class: gold

Both assets, experts say, are often seen as ways to diversify a portfolio or as a hedge against fiat currency inflation brought about by what some observers see as unsustainable fiscal and monetary policies.

Yet, until recently, it was rare to see Wall Street analysts, chief executives, or established investors seriously compare the two assets. Bitcoin, commonly referred to as digital gold, has historically been seen as a risky speculative investment for those looking to profit in the short term. Gold, meanwhile, has always been considered a safe-haven asset.

Now, bitcoin’s rapid ascent to over $57,000 per coin, backed by new investments from Tesla and other institutional names, has led some to question whether old assumptions about these assets are correct.

Given digital currencies’ dizzying climb, Insider surveyed 10 experts to see if they’d rather hold bitcoin or gold for the next 10 years, and why. We asked bitcoin bulls, gold lovers, analysts, executives, and more.

Read more: JPMorgan says buy these 40 stocks set to soar as bond yields make a surprising jump higher

Here’s what they had to say:

Holding Gold

  1. “My vote would be for gold because it has thousands of years of a historical record as a store of value, has one-fifth the volatility of bitcoin, and doesn’t face the same competition risk. The day that Queen Elizabeth trades in the five pounds of gold in her crown for crypto is the day I’ll shift course.” – David Rosenberg of Rosenberg Research, former Chief Economist and Strategist for Merrill Lynch Canada and Merrill Lynch in New York
  2. “Gold and silver have been stores of value and mediums of exchange for at least 4 millennia in every civilization in every corner of the world. It has unmatched accessibility to people of all economic standing and technological knowledge. And gold is the ultimate currency of central banks, silver of the people. There is room for cryptocurrencies too since their digital nature is a fundamental difference from gold and silver. But that characteristic also ensures that cryptocurrencies will never replace gold and silver and will ultimately improve the metal’s value.” – Phil Baker, President and CEO, Hecla Mining Company 
  3.  “Gold has long been considered to be the safe-haven asset of choice, and, while bitcoin is ‘the new kid on the block,’ it’s debatable that it will eat into gold’s market share for a number of reasons. Bitcoin and gold both have significant advantages over fiat currencies because neither can be diluted or debased. There is a possibility that bitcoin could one day cease to exist through hostile legislation. Some bitcoin derivatives have already been banned. Companies such as Facebook who have attempted to start crypto have been prevented from doing so. So, while bitcoin is a more recent form of investment that is certainly receiving a lot of hype, gold has retained its value through centuries. Whether bitcoin will offer the same level of longevity is highly questionable.” – Sylvia Carrasco, CEO and founder of the gold exchange platform Goldex. 
  4. “One of the assumptions underlying bitcoin’s bull case is its limited supply, but the supply of cryptocurrencies, on the whole, is theoretically unlimited. Some extol bitcoin as a portfolio diversifier, but it has so far exhibited higher correlations to equities than gold, particularly during periods of equity market stress when diversification tends to add the most value. The demand for bitcoin may be over its skis relative to its likelihood to carve out a significant economic or financial use case.” – Michael Reynolds, Investment Strategy Officer at Glenmede.
  5. “Both crypto and gold have passionate investor bases… However, there are very clear differences. Gold’s history as a basic building block of global money is 5,000 years old and time-tested; Bitcoin is 10 years old and has existed in only one monetary regime. The standard deviation of bitcoin’s price is 75%, making it a horrible store of value. Recent price history shows a large bias toward speculative interest, so much so that companies are tempted to include bitcoin on corporate balance sheets to help grow assets in excess of corporate performance. Crypto is a poor monetary substitute. In the US, filing your taxes requires a voluntary disclosure of your cryptocurrency profits. If a crypto trade automatically generated a statement to the IRS as a brokerage transaction does, the speculative outlook could dim.”- Robert Minter, Director of Investment Strategy, Aberdeen Standard Investments

Bitcoin Bulls

  1. “Bitcoin is a 100x improvement over gold as a store of value. The world is realizing this and beginning to reprice digital currency in real-time. Although bitcoin has increased hundreds of percent in the last few months, it is likely to continue appreciating in US dollar terms over the coming years. I suspect that bitcoin’s market cap will surpass gold’s market cap by 2030. For this reason, I own no gold and have a material percent of my net worth invested in bitcoin.” – Anthony Pompliano of Pomp Investments and Morgan Creek Digital Assets
  2. “The crypto bull run has seized the attention of millions of people who previously had never considered digital currencies like Bitcoin to be an alternative asset. While gold and bitcoin are both sometimes used as a means to diversify and hold a range of valuable assets, in many ways they are quite different. Bitcoin and other digital currencies can be easily traded on platforms. We have seen progressive global firms offering to receive payment in bitcoin and advocates such as Tesla taking an active role in promoting it. This liquidity, ease of exchange, and wider use in the modern economy are some of the major differentiators. Gold has a relatively defensive purpose- to hold value, whereas Bitcoin and other currencies are intended to have several uses, not least ease of exchange, purchase, and liquidity.” – Pavel Matveev, CEO, Wirex.
  3. “Based on the trajectory of this digital gold path and use cases globally, we believe bitcoin will be a mainstream asset class in the future. While gold has clear value and safety, the upside in bitcoin is eye-popping if it stays on its current course over the next decade.” – Daniel Ives Managing Director and Senior Equity Research Analyst at Wedbush Securities
  4. “Gold is, no pun intended, the standard if you want to measure purchasing power over millennia. The liquidity of gold has been consistent over time. Gold is what defines the X-axis of purchasing power over time. Bitcoin, while it shares defensive qualities with gold, has the additional attribute of being aspirational. What bitcoin would seem to possess is the potential to go up to multiples of a moonshot. No one thinks gold will moonshot. Bitcoin is also finite, unlike gold. No increase in demand can change that. There is zero elasticity.” – JP Thierot, CEO of Uphold, a digital money platform 
  5. “I would probably pick bitcoin but why not both? Gold and bitcoin have a very similar aspect to the portfolio. I would add gold as a diversifier. I would add bitcoin as a diversifier. The hedge is diversification. Bitcoin is a tool to get there. Bitcoin is a hedge to losing money to something stable.” – Mike Venuto, co-portfolio manager of the Amplify Transformational Data Sharing ETF, a $1 billion ETF.
Read the original article on Business Insider