Crypto Mining Stocks: Value Traps or Opportunity? | Crypto

Crypto Mining Stocks: Value Traps or Opportunity?

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– Some crypto mining stocks could be undervalued picks for investors, though others may be value traps in which stocks seem cheap after an extended slump, but end up falling more in price, according to a recent report by Valkyrie.

– Value stocks are the ones that will likely survive and rebound in price while value traps are the ones that will cease mining and likely never eclipse their prior high prices, the digital asset-focused asset manager wrote.

– Against a backdrop of major cryptocurrencies like bitcoin (BTC-USD) and ethereum (ETH-USD) falling as much as 70% from their November 2021 peaks in a widespread bear market, crypto mining stocks like Marathon Digital (NASDAQ:MARA), Riot Blockchain (NASDAQ:RIOT) and Hut 8 Mining (NASDAQ:HUT), in turn, have plunged even more, and in some cases they have sold some of their crypto holdings and mining machines to free up capital.

– Miners that have smaller crypto holdings relative to their market cap are: HIVE Blockchain Technologies (NASDAQ:HIVE), Bit Digital (NASDAQ:BTBT), CleanSpark (NASDAQ:CLSK), Stronghold Digital (NASDAQ:SDIG) and Greenidge Generation (NASDAQ:GREE). That group of miners could be seen as “defensive” names, as they’re less exposed to having their liquid assets fall in value if crypto prices keep tumbling, Valkyrie noted.

– The following set of miners — with larger crypto holdings relative to their market value — is said to be more levered to a potential rebound in crypto: DigiHost Technology (NASDAQ:DGHI), Hut 8 (HUT), Marathon Digital (MARA) and Core Scientific (NASDAQ:CORZ).

image 912727778 Crypto Mining Stocks: Value Traps or Opportunity?

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