Why Bitcoin mining stocks have soared today

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What happened

Sneaking behind the gains on major cryptocurrencies such as Bitcoin (CRYPTO: BTC), cryptocurrency mining companies had a fine Monday. HIVE Blockchain Technologies (NASDAQ: HIVE) and Hut 8 Mining (NASDAQ: HUT) both ended the day up nearly 10%, while Bit Digital (NASDAQ: BTBT) posted a gain of almost 6%.

So what

This latest of many cryptocurrency surges actually started over the weekend, led as always by a rise in Bitcoin. This follows the announcement that the House of Representatives has passed a monster infrastructure bill that addresses cryptocurrency-related issues such as broker registration and trade reporting.

Image source: Getty Images.

Typically, asset owners react negatively when more potential regulation is underway for their associated investments. In this case, however, it looks like the growing involvement of government in the crypto sphere is good for this rapidly growing industry as a whole. Investors find solace in a well-regulated environment, as increased confidence increases demand for the asset or assets concerned.

And with this particular increase in demand, the world will want more cryptocurrency. Cryptocurrency miners like HIVE Blockchain, Hut 8 and Bit Digital specialize in mining coins from the digital earth, hence the attraction of investors on Monday.

Now what

As long as cryptocurrencies, especially Bitcoin, remain foamy, stocks in related cryptocurrencies like HIVE Blockchain, Hut 8, and Bit Digital should continue to do well. Owning shares of these miners is essentially like investing in cryptocurrencies themselves, without having to maintain and monitor a secure crypto wallet.

I should note that all three companies mine Bitcoin, while HIVE Blockchain and Hut 8 also have sizable operations in the comparably popular Ethereum.

Believers in the future of the crypto-economy should therefore continue to be bullish on this trio.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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