Send me real-time posts from this site at my email
Motley Fool

Why Crypto Mining Stocks Jumped Today

What happened

Shares of cryptocurrency mining stocks jumped double-digits on Friday in another good day for the crypto industry. Crypto exchange-traded funds seem to be on their way to the market very soon and some stocks got analyst upgrades as well. The tailwinds are certainly behind crypto mining stocks today.

Hut 8 Mining (NASDAQ: HUT) was up as much as 18% in trading today, Marathon Digital Holdings (NASDAQ: MARA) jumped 11.2%, and Bit Digital (NASDAQ: BTBT) rose 11% today. At 3 p.m. EDT shares of these stocks were up 16%, 10.6%, and 2.9% respectively.

Image source: Getty Images.

So what

The biggest news is the fact that Bitcoin is up 6.1% over the past 24 hours and is now over $61,000 per token. The jump was driven by news that the Securities and Exchange Commission is set to allow the first U.S. Bitcoin futures EFT, giving investors exposure to Bitcoin without the need to buy the digital coins themselves. Investors have been speculating that this move was coming for weeks and now the funds appear to be ready to hit the market as early as next week.

On the analyst front, DA Davidson analyst Christopher Brendler initiated coverage on Marathon Digital and Hut 8 Mining, both with buy ratings and with price targets of $65 and $20, respectively. He called Hut 8 Mining the firm's top pick in the Bitcoin miner space.

Bit Digital released a filing with the SEC that allows large shareholders to sell 23.6 million shares. The company is not getting any proceeds from these sales, but the fact that big investors may be selling could be a reason that Bit Digital's shares fell back in trading today.

Now what

I wouldn't put too much weight into the analyst upgrade because any pop from that news will likely fade over the next few weeks. Analysts can cause stocks to pop or drop short-term, but they don't change the fundamentals of a company, which is ultimately what will drive stock prices.

Since Bitcoin mining companies make money in part based on the price of Bitcoin itself, the rise in the cryptocurrency's price is good news for these stocks and that should have a bigger impact for investors. It's not entirely clear what effect the trading of a Bitcoin futures ETF will have on the price of Bitcoin itself, but the market certainly thinks the impact will be positive.

As quarterly earnings come out over the next few weeks, we'll see how the rise in Bitcoin prices impacts the operations of these companies. We could see an increase in profitability as a result of more Bitcoin mining and higher prices, so look for the next quarter to be critical on the growth path for these crypto stocks.

10 stocks we like better than Marathon Digital Holdings, Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Marathon Digital Holdings, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of September 17, 2021

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Bitcoin. The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue