Investing in Cryptocurrency Mining Stocks

- November 7th, 2019

According to one report, the hardware market for mining cryptocurrencies is projected to reach US$2.2 billion by 2022.

Cryptocurrency mining stocks are outperforming the bitcoin price in 2020.

After starting the year trading at US$7,152, bitcoin’s price has climbed up over US$11,861 as of August 20, 2020. At the same time, key cryptocurrency mining stocks are posting impressive gains, some even eclipsing that of bitcoin itself.

Ryan Watkins, bitcoin analyst at Messari, cites “spillover from resurging interest in cryptocurrencies” as one big reason for those cryptocurrency mining stock gains. “It’s natural for mining stocks to rise with cryptocurrencies,” he added.

As Research and Markets explains, crypto mining is central to the very process of validating bitcoin transactions. According to a Technavio outlook report, the cryptocurrency mining hardware market is projected to generate US$2.8 billion on a global scale between 2020 and 2024.

 

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Here the Investing News Network profiles five cryptocurrency mining stocks that are publicly traded on North American exchanges. The companies are listed in terms of market capitalization according to Barchart as of August 20, 2020.

1. Riot Blockchain Inc. (NASDAQ:RIOT)

Market cap: US$188.89 million; current share price: US$3.98

Riot Blockchain is one of the few cryptocurrency mining stocks on the NASDAQ. The company buys cryptocurrency and blockchain businesses while supporting blockchain technology companies.

Riot’s stock price has risen right along with the cryptocurrency markets in 2020. “Riot’s recovery may have been boosted by announcements in May that its mining revenues had grown 70% in the first quarter year-on-year, its plans to roughly double its hash rate after Bitcoin’s block reward halving, and the dismissal of pump-and-dump complaints against the firm,” reported Cointelegraph.

In mid-August the company announced the purchase of  8,000 additional S19 Pro Antminers from BitmainTech PTE, which are expected to come online in early 2021. The crypto mining rigs are projected to increase Riot Blockchain’s hashrate well above 1 exahash per second.

2. HIVE Blockchain (TSXV:HIVE)

Market cap: C$167.65 million; current share price: C$0.49

Mining digital assets such as ethereum, ethereum classic and bitcoin, HIVE Blockchain is a cryptocurrency company that operates mining facilities in Sweden, Norway and Iceland. Its mining activities operate at 300 petahashes per second, with 3.8 MW in power capacity.

Though HIVE had experienced contract disputes with Genesis Mining, a strategic partner and major shareholder of the company, HIVE has since resolved its issues. Since then, it has established a third-party contract with Sweden-based Blockbase.

3. Hut 8 Mining (TSXV:HUT)

Market cap: C$115.11 million; current share price: C$1.19

Hut 8 Mining is a cryptocurrency mining and blockchain infrastructure company established through an exclusive partnership with the Bitfury Group, the world’s leading full-service blockchain tech company. It has operations in Alberta’s Medicine Hat and Drumheller, with 94 data centers, 109.4 megawatts (MW) of power and mining rig speed capabilities of 963 petahashes per second. A petahash is equivalent to one quadrillion hashes per second.

4. Marathon Patent Group (NASDAQ:MARA)

Market cap: US$103.50 million; current share price: US$3.22

With a mining facility located in Quebec, Marathon Patent Group was one of the first cryptocurrency mining companies to begin trading on the NASDAQ. It has deployed over 6,000 Bitmain miners with its 2 MW of power dedicated to mining bitcoin. The company has welcomed Jesse Lund, former head of blockchain at IBM (NASDAQ:IBM), to its management team.

 

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5. Codebase Ventures  (CSE:CODE)

Market cap: C$3 million; current share price: C$0.06

Codebase Ventures, formerly named 360 Blockchain, is a company that exclusively invests in blockchain technology. It is based in Canada, but has also expanded into the US market.

While the company itself doesn’t mine cryptocurrencies, its subsidiary SV CryptoLab is primarily involved in mining activities. SV CryptoLab is a fully equipped cryptography and blockchain lab in Silicon Valley. Codebase Ventures raised its stake in the company to 80 percent in 2018.

“Our model is adaptive and is being deployed in such a way that we foresee tremendous upside with the company’s own crypto-mining activities and very importantly, proprietary offerings being developed for other companies involved in mining operations,” Jim Cerna, director of SV CryptoLab, said at the time.

This is an updated version of an article first published by the Investing News Network in 2018.

Don’t forget to follow us @INN_Technology for real-time news updates!

Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Codebase Ventures is a client of the Investing News Network. This article is not paid-for content.

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