As a researcher with experience in the cryptocurrency market, I believe that Bitcoin mining stocks have shown promising signs of recovery following the recent Bitcoin rebound. However, it is essential to keep in mind that this trend could be short-lived and subject to various risks.
In the pre-market hours on Wednesday, stocks connected to Bitcoin mining experienced a rebound. This recovery was driven, in part, by the recent uptick in the value of Bitcoin itself.
The stocks of Riot Platforms experienced a gain of more than 1%, and Marathon Digital, leading the mining sector, saw its shares climb by 1.65%. Additionally, CLSK, IREN, CORZ, and WULF all reported rises exceeding 1.5% in their stock prices.
Bitcoin price is rebounding
As a crypto investor, I’ve noticed an uplift in the performance of certain stocks due to the recent Bitcoin price fluctuations. Last week, Bitcoin hit its lowest point at $53,520 on a Friday, but by Wednesday, it had surged above $59,390. Consequently, stocks related to Bitcoin and cryptocurrencies experienced growth as well.
The industry’s conflicting messages led to this rebound. On the one side, the German government was actively transferring Bitcoins from its holdings to exchanges in preparation for a potential sale. Last Wednesday, it sent an additional 5,013 coins to Kraken, Coinbase, and Cumberland. Now, it holds more than 18,000 coins left.
Simultaneously, coins are being transferred from wallets linked to Mt.Gox, resulting in an increase in available coins on exchanges.
It’s encouraging to note that Bitcoin Exchange-Traded Funds (ETFs) experienced inflows recently. Specifically, nine ETFs acquired approximately 4,601 coins on Tuesday, equivalent to over $263 million in value. Notably, some of the top performers include funds managed by Blackrock, Fidelity, Ark Invest, and Bitwise.
As a researcher studying cryptocurrency market trends, I’ve noticed some intriguing data from CryptoQuant regarding BitMEX. This week, there was a significant outflow of over 35,000 coins from the exchange. Historically, such large coin movements from BitMEX have been indicative of upcoming Bitcoin price surges.
As a crypto investor keeping a close eye on Bitcoin movements, I can’t help but notice the significant outflow of 35,486 BTC from BitMEX. Based on past trends, this kind of event on BitMEX is often a reliable indicator that a price surge for Bitcoin is imminent. Keep an eye on this development. Read more here.— CryptoQuant.com (@cryptoquant_com) July 10, 2024
The price of Bitcoin increased following Jerome Powell’s announcement that the Federal Reserve might reduce interest rates if the rate of inflation keeps decreasing. Recent statistics indicated that both the headline Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) indices dropped in May.
Bitcoin mining stocks risks remain
As a researcher studying Bitcoin mining stocks, I’ve identified two potential risks that could impact this market. Initially, I’ve noticed that many of these companies have seen a decrease in their Bitcoin production due to the recent halving event. This means that they are generating fewer new Bitcoins than before, which could negatively affect their revenue and profitability.
Marathon Digital mined approximately 590 Bitcoin coins in June 2024, representing a 40% decrease compared to the same period last year, and a 4% decline from May’s output. TeraWulf produced around 136 Bitcoin coins last month, marking a decrease of about 8.3% from the prior month. Companies such as CleanSpark and Cipher Mining also reported reduced Bitcoin production levels.
Bitcoin price chart
As a crypto investor, I’m always on the lookout for potential market movements that could impact my investments. One concern I have right now is the possibility of a dead cat bounce in Bitcoin’s ongoing recovery. This term refers to a brief rebound in an asset that’s been in a downtrend. It’s called a dead cat bounce because the rebound is often so insignificant that it’s like watching a dead cat bounce back after being dropped.
Therefore, Bitcoin mining stocks will likely resume their downtrend if BTC price recovery falters.
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2024-07-10 15:38