, 2022-05-13 09:56:25,
Today’s been another wild one in the world of cryptocurrencies and crypto-related stocks. For companies tied to the crypto mining sector, this has been even more true.
As of 9:45 a.m. ET, shares of Bit Mining (BTCM 4.51%), SOS (SOS 8.27%), Bit Digital (BTBT 7.50%), Hut 8 Mining (HUT 12.29%), and Canaan (CAN 7.69%) have all surged more than 3% in today’s session. This sector-specific move is driven, unsurprisingly, by higher Bitcoin (BTC -5.40%) prices today. At 9:45 a.m. ET, Bitcoin had surged 8.6% over the past 24 hours.
That said, over the past week, these top Bitcoin-mining-related companies are each down considerably. This week’s losses, compared to last Friday’s close, come in at -6.8%, -15.6%, -8.9%, -17.3%, -13.6%, and -22.7%, respectively.
This group of Bitcoin-mining-related companies tends to track the price of Bitcoin higher or lower. That’s because these companies generally carry debt denominated in dollars on their balance sheets, with revenue denominated in Bitcoin (or tied to the price of Bitcoin, in the case of machine or chip production).
These business models effectively provide a leveraged way for investors to play the price of Bitcoin (a higher-beta option, relative to Bitcoin itself). This means that when Bitcoin prices are surging or plunging, the stock prices of many of these companies will often see even greater swings in the same direction.
This week’s rather incredible price swings in Bitcoin appear to tell most of the story with respect to these stocks. Bitcoin’s dramatic decline earlier this week, which was tied to concerns about contagion from the fallout from algorithmic stablecoin TerraUSD, has seemingly worked its way through the market. Today,…
To read the original article, go to Click here