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Crypto Currency Shares Exploded!

Thanks to Bitcoin (CRYPTO: BTC) and other digital currencies rising sharply earlier in the day, Crypto Currency stocks kicked off Thursday

Yazar: Ross Sutton

Yayınlanma: 28 Mayıs 2021 16:55

Güncellenme: 7 Kasım 2024 10:13

Crypto Currency Shares Exploded!

  Crypto Currency Shares Exploded! Thanks to Bitcoin (CRYPTO: BTC) and other digital currencies rising sharply earlier in the day, cryptocurrency stocks kicked off Thursday in a great way. Of course, with the increase in crypto prices, there is a parallel increase in crypto stocks. BIT Mining (NYSE: BTCM) continued to lead today with an increase of 33,9 %, while SOS Ltd (NYSE: SOS) rose to 17,1 % and Bit Digital (NASDAQ: BTBT) rose to 12,5 %. The stocks, which fell sharply from their high levels during the day, increased by 23,3 %, 16,6 % and 4,2 %, respectively, at the close. Status: Bitcoin, which reached lows close to $ 37,000 in one night, rose to over $ 40,000 early on Thursday. This was the reason for the premature boom in cryptocurrency stock trading. At the time of writing this article, Bitcoin dropped to around $ 39,000, causing the shares to decline again. BIT Mining announced last week that it will invest in a crypto mining data center in Texas, and this week announced that it plans to build a 100 Megawatt (MW) crypto mining data center in Kazakhstan. These moves could be a way to circumvent some of the restrictions the Chinese government has placed on cryptocurrencies. One of the biggest risks for cryptocurrency miners is the depreciation of their assets due to government restrictions. The most obvious example of this is the recent bans imposed by the Chinese government. It should be seen as positive for the industry as companies diversify where they have data centers and even try to add more renewable energy sources. Also, with crypto prices stabilizing again, the market is returning to mining stocks. What will happen in the future? Cryptocurrency miners will act with key cryptocurrencies like Bitcoin. Therefore, the volatility in the market will continue to raise or lower stocks sharply every day. This volatility is part of the crypto business and should be viewed as a risk to own stocks for long-term investors. As is known, traditional mining companies are more volatile than commodities. Likewise, it should be noted that miners can be even more volatile than cryptocurrencies in the long run. This is because of the operating leverage that exists in the crypto mining business. We also need to pay attention to how crypto mining diversifies over the long term. There is a huge risk that most of the crypto mining in the world is in China. But if mining spreads around the world, the risk to the government may be reduced.    

Source: The Motley Fool

 

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