After a tumultuous period in 2020, the cryptocurrency market has seen a surge in early 2021. According to data from Coin Gecko, one of the most prominent forms of cryptocurrency, Bitcoin, has seen a 200% YTD increase in values. As such, many have explored the potential of investing into related stocks and recently, a variety of Bitcoin mining stocks have seen impressive increases – one of which has almost tripled in price in the first quarter of this year.
1. Bitcoin Mining Stocks Posting Double Digit YTD Gains
Like its predecessor gold, investors have been drawn to Bitcoin as an alternative asset to park their wealth without volatile currency fluctuations. Furthermore, the recent surge in Bitcoin’s price has lead to a growth of Bitcoin-related businesses in both Europe and Asia and double-digit YTD gains in mining stocks.
An example of such stocks that offer Bitcoin operations are HIVE Blockchain Technologies Ltd, which has posted gains of over 60% YTD. This particular stock has been buoyed by a strategic partnership with energy giant Genesis Mining to expand their government-sponsored mining operations. Furthermore, the stock has seen a recent purchase made by a Hong Kong-based cryptocurrency mining group, to secure HIVE’s latest Norwegian-located mining facility.
Elsewhere, Bitcoin Services Inc. has posted YTD gains of over 30%. The stock’s growth has been largely attributed to their platform Coinsignals, a Bitcoin trading and mining platform. The platform filters Bitcoin income opportunities through the analysis of live data, charting, and risk management. As a result, it has seen a steady build in popularity amongst traders.
Finally, Global Blockchain Technologies Corp. has jumped 10% so far this year despite their controversial position in the market. Their aggressive acquisition strategy has been largely viewed with skepticism by traditional investors, who have been put off by the company’s lack of experience.
However, Global Blockchain Technologies Corp. has arguably been one of the more successful investments amongst Bitcoin mining stocks, consistently posting returns for investors.
2. Record Breaking Stock Surges to 400%
The recent surge in the price of stocks has been quite remarkable, indeed unprecedented. Traders the world over have been taken by surprise, as the major indices of stock markets across the globe have continued to rise.
At the forefront of this trend is the S&P 500, a well-known measure of the average prices of stocks for the 500 largest publicly traded companies in the United States. The index surged to 400%, prompting vast speculation as to what could have caused such an unprecedented rise.
Analysts have identified several key factors that might have contributed to the stock market’s remarkable surge.
- A cyclical bull market due to an economic growth rate of more than 10%: Economic labour market conditions are favourable, driving increased consumer activity, resulting in higher demand for stocks.
- The possibility of political stability: With elections coming up in the states, markets may anticipate more policy consistency in the absence of major shifts in the composition of government.
- Monetary easing policies put into place: Investors have responded positively to the easing of monetary policies, which has fuelled the stock market surge.
Whatever the cause for the remarkable surge may be, one thing is certain: the world’s investors collectively have their eyes glued to the markets, waiting to see if the current trend can be maintained.
3. Reasons for Bitcoin Mining Stock Surge
The surge of prices in the Bitcoin mining stocks has been a point of interest to investors and cryptocurrency enthusiasts alike. There are three main reasons why this surge has taken place.
- Increased demand in cryptocurrency mining
- The demand for cryptocurrency mining is intrinsically linked to the value of the asset. As the value of Bitcoin rises, so too does the demand for mining rigs which are the main drivers of mining operations.
- The demand has also been stoked by recent innovations in the industry such as improved hardware and software. This has resulted in improved hash rate which has led to increased profitability and is a major factor in the surge.
- Institutional investors buying up stock
- The entry of institutional investors into the market has caused a significant rise in the value of Bitcoin mining stocks. This has been fuelled by the large amount of capital available to these investors who are looking to capitalize on the potential of the digital asset.
- This influx of capital has allowed mining companies to expand their operations as well as purchase more equipment, resulting in a significant increase in the stock prices.
- Global interest in cryptocurrency
- The global interest in cryptocurrency has significantly increased in recent times. This has resulted in a surge in speculative trading, as traders put their capital into the asset in the hopes of making quick profits.
- The increased demand for miners and the rising prices of the cryptocurrency has caused a significant boost in the value of Bitcoin mining stocks.
These three factors have combined to create a surge in the value of Bitcoin mining stocks, and the current trend is showing no signs of slowing down. Bitcoin mining stocks remain one of the most attractive investment opportunities in the cryptocurrency market.
4. Experts Urge Caution Despite Positive Gains
The momentous gains in global health achieved through large-scale vaccinations are undeniable, and researchers are now urging caution despite the potentially beneficial outcomes for countries and people around the world. The vaccination program carries a number of potential risks, and experts warn that without a procedural understanding and informed decisions, countries stand to suffer harm.
The challenges posed by widespread immunisation coverage are varied. Most immediately, some experts caution that while large-scale vaccinations may offer a way out of the pandemic, a sudden decrease in their usage could lead to a new wave of outbreaks. The risk of this is magnified by the lack of control over the spread of a virus outside of containment zones.
Adverse Effects
The potential historical side-effects of vaccinations must also be weighed in light of the current initiative. Experts point out that a single vaccine recipient may experience serious after-effects, such as paralysis, but those effects may not be recognised until the vaccination program has already become widespread. In addition, the long-term effects of large-scale vaccination remain unknown.
Recommendations
- All healthcare providers must be adequately equipped to diagnose and treat the increasing number of vaccine recipients.
- Close monitoring of vaccinated individuals must be undertaken to detect any adverse events.
- The medical records of vaccine recipients must be readily accessible, allowing for any further adverse reactions to be tracked.
- All countries should be provided with clear guidance on how to identify, prepare for and respond to public health emergencies.
The potential of large-scale vaccinations cannot be ignored, but the risks must not be taken lightly. Governments and healthcare providers alike must ensure that they have put in place appropriate measures and procedures to mitigate and respond to any potential hazards. Proper oversight is essential in order to ensure the success of any vaccination program.
The increase in Bitcoin mining stocks has been nothing short of remarkable this year, with one stock soaring almost 400%. While some investors have made a small fortune on such stocks, it’s important to remember that these kind of market movements can be unpredictable and come to an abrupt end at any time, so caution and understanding of the risk is of the utmost importance. Nevertheless, the dramatic growth of Bitcoin mining stocks is something worth assessing closely.
