Crypto miners rally as Bitcoin mining profits remain ‘near high’

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Crypto mining companies including Marathon Digital and Hut 8 outperformed other crypto-related stocks on Tuesday as the economy for miners continues to be lucrative.

Shares of crypto miners, which have the highest correlation to the price of bitcoin, started November on a bullish tone, following the price gains of the largest cryptocurrency. Bitcoin topped $ 64,000 on November 2, after coming out of October to nearly $ 60,000. Ether, Ethereum’s native token, also hit an all-time high above $ 4,500.

Meanwhile, the Bitcoin network hashrate, a measure of mining activity, fell to around 153 exahash per second, from 185 EH / s in October, according to data analytics firm Glassnode. Typically, if the network hashrate decreases as prices recover, miners gain more from mining coins.

With bitcoin prices rising since the start of the month and the hashrate down about 18% over the past seven days, the bitcoin economy remains “near highs,” wrote Lucas Pipes, analyst at B Riley , in a research note.

To put the profitability of crypto miners into context, DA Davidson analyst Christopher Brendler estimated in a recent research note that for miners like Marathon Digital, gross margin, or profit after operating costs, will be d ” approximately 89.6% in 2021 and 90.8% in 2022.

Bitfarms shares climbed 12% on Tuesday, after hitting record mining power in October. Marathon Digital shares rose 11%, as did Hive Mining. Hut 8 climbed 10% and Riot Blockchain climbed 7% on Tuesday. Argo Blockchain underperformed its competitors, falling around 1.7% even after posting record third quarter revenues.

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