Mining stocks may continue to outperform Bitcoin

Mining stocks have outperformed Bitcoin over the past year, according to financial research firm FundStrat, and the trend has only intensified since Bitcoin’s price surpassed $20,000 a few months ago. The firm predicts that this trend is likely to continue if Bitcoin remains in a bull run.

FundStrat said Bitcoin and the cryptocurrency market as a whole are in the midst of a modern digital gold rush, which means mining stocks may still have some room to rise.

Because miners play a vital role in the Bitcoin network, investors have been looking for opportunities to gain exposure to mining companies.

The largest public mining companies include Riot (NASDAQ: RIOT), Hive (OTCMKTS: HVBTF), and Marathon Patent Group (NASDAQ: MARA).

As the price of Bitcoin rises, miners will upgrade their mining equipment in pursuit of higher block rewards. FundStrat expects that more efficient mining machines will help maintain competitiveness and improve profit margins.

However, FundStrat reminds that mining company stocks may serve as a high-beta play for Bitcoin, and when the market goes bearish, the downside volatility of mining stocks is expected to be greater than that of Bitcoin.

Figure | Return rate of mining stocks over the past year (Source: FundStrat)

Translation: Brother Ping

Editor: Elsa

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