Bitcoin (BTC) mining stocks are experiencing a remarkable upswing, driven by Bitcoin’s latest price rally past $70,000 and an emerging trend among miners toward AI-focused business models.
This resurgence follows a lackluster performance in mid-2024, primarily due to revenue pressures from the Bitcoin halving event. However, recent strategic pivots within the sector and Bitcoin’s ongoing momentum have revitalized confidence, sparking renewed investor interest.
Bitcoin price rally and strategic shifts drive mining gains
The surge in Bitcoin miner stocks is propelled by two significant factors – Bitcoin’s price rally and the adoption of AI within mining operations.
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Bitcoin’s price surge above $70,000 has been a key factor driving miner stocks higher. Elevated BTC prices translate to greater revenue for miners, enabling them to hold onto reserves longer and reduce selling pressure on the market, potentially supporting further BTC gains.
Bitcoin’s price is anticipated to rise further, with analysts noting liquidity conditions and global interest rates as two primary catalysts shaping Bitcoin’s next major movement.
In tandem with Bitcoin’s strength, miners like Core Scientific (NASDAQ: CORZ) are diversifying revenue streams by integrating AI technologies.
For instance, Core Scientific recently secured a 12-year partnership with AI hyperscaler CoreWeave, valued at up to $3.5 billion. The company also signed three agreements, adding 70 MW and 112 MW commitments to its initial 200 MW deal, according to The Block.
This AI integration has not only diversified miners’ business models but has also attracted new investment interest. Reflecting this sentiment, Jefferies analyst Jonathan Peterson recently initiated a “buy” rating and set a $19 price target on Core Scientific, highlighting its successful post-bankruptcy transformation.
“Impressive post-bankruptcy comeback story as the company leverages its significant access to power — previously earmarked for Bitcoin mining — to build AI-focused data centers. We expect that many big tech companies will be closely watching the CoreWeave developments and successful execution will convince decision makers to sign future development leases.” – Jonathan Peterson
Core Scientific’s stock gained 6% on October 28, contributing to an impressive year-to-date increase of over 155% and reinforcing investor optimism around AI-driven innovations in mining.
Additionally, in an interview with analysts at research and brokerage firm Bernstein, Jason Les, CEO of Bitcoin miner Riot Platforms, noted the firm would also consider AI opportunities if the right partner and deal structure emerged.
Other mining companies, such as Iris Energy, Bitdeer, and Hut 8, are also expanding into AI-driven operations, which Benchmark analyst Mark Palmer describes as a “dual-play” opportunity that taps into both the cryptocurrency and AI markets, according to The Block.
Global momentum adds support
The appeal of Bitcoin mining stocks is further bolstered by increasing international interest in mining. Nations such as Argentina, the United Arab Emirates, and Ethiopia have officially confirmed using state-owned resources to mine Bitcoin, showing the asset’s expanding acceptance.
Additionally, in a CNBC interview, Matthew Sigel, head of digital assets at VanEck, pointed to BRICS nations exploring Bitcoin for international trade settlements, potentially circumventing the U.S. dollar and solidifying Bitcoin’s role in global finance.
Moreover, upcoming macroeconomic events, such as the Federal Reserve’s rate policy and a potential Trump presidency, could further serve as additional bullish catalysts.
U.S. spot Bitcoin ETFs have also seen over $3 billion in net inflows as demand reached its highest level in six months, highlighting growing institutional demand.
Top performers: Bitcoin mining stocks on the rise
On October 28, Bitcoin mining stocks recorded impressive gains. Bitdeer led with a 24.4% surge, followed by Iris Energy (NASDAQ: IREN) at 17.8%, Gryphon Digital Mining (NASDAQ: GRYP) at 16.5%, and Hut 8 at 15.5%.
Other stocks, including MARA Holdings (NASDAQ: MARA), CleanSpark (NASDAQ: CLSK), Riot Platforms (NASDAQ: RIOT), and TeraWulf (NASDAQ: WULF), also saw double-digit gains, underscoring widespread investor confidence.
This rally highlights the increasing influence of AI and Bitcoin’s price dynamics on mining stocks, positioning miners as key players in a tech-diversified investment landscape. This momentum is fueling a bullish outlook for Bitcoin as institutional and retail interest continue to rise.
Featured image:
PalSand – October 29, 2024. Digital Image. Shutterstock.
