Bitcoin mining stocks could grow 10x in coming years — analyst

Key Takeaways

• A new analysis claims Bitcoin mining stocks have the potential to register 10x gains
• Some BTC stocks have already outperformed Bitcoin’s rally

YEREVAN (CoinChapter.com) — Bitcoin mining stocks have the potential to earn 10x returns, per Nick, an analyst at data resource firm ‘Ecoinometrics.’

In a report published earlier this week, Nick claimed that shares of Bitcoin (BTC) miners could become as valuable as gold miners. The outlook originates from a hypothesis that the Bitcoin market would capture a good portion of gold’s market in the future, given its ability to be a more fungible and cheaper-to-store safe-haven asset.

Therefore, stocks associated with cryptocurrencies could also mimic gains witnessed among the shares of gold-related mining companies.

Bringing the example of Marathon Crypto Mining, a subsidiary of Marathon Digital Holdings (MARA), Nick made a case for the possible rise in Bitcoin mining stock price. According to him, since the last halving in 2020, BTC is up 5x while Marathon is up 40x.

Marathon Digital’s current market cap stands at $3 billion. Should the 10x rally take place, as predicted by Nick, it would place the company on an equal footing with Barrick Gold, the Canadian mining giant. At the time of his article, Barrick’s market cap stood at $37 billion.

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How are Bitcoin (BTC) stocks performing? 

Several companies have added BTC to their balance sheet. Many institutional investors have been unable to buy BTC directly due to policy reservations. Hence, such companies give investors an alternative to gain indirect exposure to BTC. 

Thanks to early entrants like Microstrategy, the Bitcoin treasury index even registered impressive gains, outperforming BTC gains.

“This is what we saw with the Bitcoin Treasuries Index. Even though half of this index is made of MicroStrategy (which isn’t exactly a small cap stock), it performed 2x better than Bitcoin since the halving,” 

Nick writes.

Besides treasuries, Bitcoin exchange-traded funds (ETFs) have also found many takers. The fact that people still continue to invest in BTC futures indicates a reigning bullish sentiment in the markets.

However, Nick also warns of a continued high puts to calls ratio in the options market. According to him, there are still 3 times as many puts than calls, which goes contrary to the otherwise bullish picture. 

With BTC possibly poised to hit the $100,000 mark by Q2, we can expect to see Bitcoin mining stocks register massive gains as well.