To The Moon

The volume of Bitcoin moved in the past week is the highest in 18 months, and miner revenue has grown to match it, according to The Block’s data. Bitcoin miners are racing to purchase equipment and searching for locations with low-cost electricity in order to run them, according to a report in Bloomberg.

$CME Bitcoin - main 2403(BTCmain)$ finally broke above its former all-time high price this past week, breaching $69,000 before mildly retreating. The run-up in price has led transaction volume to skyrocket on the network, and miners are cashing in on the increased activity.

Bitcoin 7-Day Moving Average Transaction Volume

According to data from The Block, the seven-day moving average of transaction volume on the Bitcoin network has reached its highest level since September 2022, 18 months ago.

That increased volume has led to a corresponding increase in Bitcoin miner revenue, as the seven-day moving average of miner revenue, currently $65.4 million, is just shy of its all-time high of $67.2 million reached in May 2021.

Bitcoin Miner Revenue (7-day Moving Average) (Daily)

While the run-up in price has been attributed to the success of the spot Bitcoin ETFs in the United States, another upcoming event to watch is Bitcoin's halving, in which the reward for miners gets cut in half. Traditionally, the halving, which is projected to occur in about 40 days, on or around April 19th, is seen as a bullish event for the price of Bitcoin.

Bitcoin last month also reached its highest mining difficulty level yet, meaning over the past 12 months, the computational cost of mining a Bitcoin block has more than doubled. However, following the halving, the difficulty level may fall as less efficient miners exit the network, no longer able to run their machines profitably given the lower reward.

Mining companies are spending big

Since February 2023, according to a report in Bloomberg, the recovery of Bitcoin's price has spurred mining companies to spend over $1 billion on new equipment.

Bloomberg also noted that miners are drawing energy at a record rate, about 33% more last month than the same period last year. With Bitcoin mining, the challenge is not just purchasing the machines, but also finding sources of electricity cheap and reliable enough to compete with other mining providers. While Texas has been a popular destination for Bitcoin miners in recent years, others, especially Chinese companies, are investing in places like Ethiopia.

Mining companies have invested more than $1 billion to purchase power-saving computers. Bitcoin miners have actively returned to the market after a long period of silence in the recent crypto winter. According to a recent Bloomberg report, Bitcoin miners spend a lot of dollars on equipment and use energy at record levels, marking the revival of Bitcoin mining.

Reportedly, the Bitcoin miners are back in survival mode driven by Bitcoin’s prevailing bullish trend. Following the Spot Bitcoin ETF launch in January, Bitcoin has seen substantial surges in its price. With the increasing acceptance of ETFs and anticipations of the upcoming Bitcoin halving, BTC price started moving upward, crossing the substantial $50k and $60k levels, finally marking a new all-time high of $70k recently. Currently trading at $68,930, Bitcoin exhibits a 24-hour increase of 1.94% and a weekly surge of 12.23%.

As per the data shared by TheMinerMag, top mining companies have ordered about $1 billion worth of specialized computers since February 2023. $CleanSpark, Inc.(CLSK)$ and $Riot Blockchain, Inc.(RIOT)$ spent the highest amounts of $473 million and $415 million, respectively, leading the group. Asher Genoot, the CEO of the Bitcoin miner Hut 8 Corp., stated,

Scale matters because you can get machines for better rates, bigger energy deals and drive down the cost of development. When you have scale, you have more marginal and growth profits and you can cover your big costs.

If we look at how CleanSpark have been trading, this might be a good time for entry as I can see some consolidation before Bitcoin make another rally run to a new high.

While we do see Riot doing a decline, we could watch out for this crypto stocks before it make a comeback with Bitcoin staying above $70k.

Summary

I feel that it is still a good time to look at these Bitcoin mining stocks as they should make a new high together with Bitcoin price rally, there might some consolidation happening as well, but that might be an opportunity for good entry.

$Marathon Digital Holdings Inc(MARA)$ $Hut 8 Mining Corp(HUT)$

Appreciate if you could share your thoughts in the comment section whether you think Bitcoin miners would be benefitting now with Bitcoin rally?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.