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When digital asset valuations surge, crypto mining stocks naturally benefit, much like other commodity producers.<\/p>\n
Data shows that major firms including Marathon Digital (MARA), Bitfarms (BITF) and Riot Platforms (RIOT) are posting double-digit gains over the past five days, between 17% and 19%.<\/p>\n
Speculation for crypto mining stocks has been fueled by the crypto market rally at the beginning of the week, which saw the price of bitcoin (BTC<\/a>) cement a new yearly high above $35,000.<\/p>\n Miners faced significant challenges last year attributable to rising electricity costs, the Ukraine-Russia conflict and falling crypto prices \u2014 sending respective share prices tumbling.<\/p>\n In the face of those challenges and by the beginning of this year, miners managed to recover substantial losses in their valuations by August \u2014 clawing back some 150% to 200% in year-to-date terms.<\/p>\n As a result, over the past 12 months, MARA has exceeded its earnings per share (EPS) estimate in 25% of instances, whereas the broader crypto mining industry has outperformed the EPS estimate 61.8% of the time during the same timeframe, TipRanks<\/a> data shows.<\/p>\n BITF and RIOT have also managed to beat similar EPS estimates leading to a rush of new investments in the wake of the crypto industry\u2019s rising valuations.<\/p>\n It comes as the spot prices for existing bitcoin ASICs continue to set all-time lows, bitcoin mining consulting firm BlocksBridge noted in its weekly miner note.<\/p>\n Cheaper mining equipment is helping to drive down some operational costs in the face of bitcoin\u2019s increasing hashrate \u2014 a sign of heightened competition amongst miners, Blockworks was previously told.<\/p>\n While miner profitability took a hit last month<\/a> due to fresh local highs in those hash rate figures, it appears the sector is retaining resiliency.<\/p>\n Various previous-generation models, which offer a hash rate between 25 and 38 J\/TH \u2014 including the Antminer S19, Avalon 1326, and WhatsMiner M30S+ \u2014 are now priced below $10 per TH\/s, BlocksBridge said.<\/p>\n Still, it remains to be seen whether miners can sustain their good fortunes in tandem with rising operational costs.<\/p>\n According to data<\/a> from the US Bureau of Labor Statistics, electricity prices rose 1.1% from the month of August through to September, putting further strain on households and businesses.<\/p>\n However, on Monday, US-regulated digital asset services firm BitOoda noted in its weekly report Coal plants need to secure fuel a year in advance and are now accumulating more coal than they can manage.\u00a0<\/p>\n Current coal stock levels are high compared to recent years, despite a 29 gigawatt reduction in coal capacity since 2020. This could put downward pressure on power prices in the US if plants have to operate uneconomically to deplete excess coal, BitOoda said.<\/p>\n \u201cA mild winter would likely result in lower prices with coal stocks at those high levels,\u201d the digital asset services firm said.<\/p>\n Don\u2019t miss the next big story \u2013 join our\u00a0free daily newsletter<\/a>.<\/strong><\/p>\nOperating headwinds<\/h2>\n
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