Bitcoin Ups Gives A Positive Impact For BTC Mining Companies

Bitcoin prices rose throughout the beginning of this year. (Photo; Doc. Unsplash)

JAKARTA - After experiencing severe financial pressure last year, crypto miners are now relieved by the 28 percent increase in Bitcoin (BTC) prices in the last two weeks. The return of the strong Bitcoin price earlier this week had a very positive impact on crypto mining company shares, which recorded the best monthly performance in more than a year.

This provides a little relief for miners who have to sell most of the Bitcoin they mine to increase liquidity by 2022. In just the first two weeks of 2023, leading BTC mining company Bitfarms saw a 140 percent increase in its share price. Likewise, Marathon Digital Holdings shares recorded a 120 percent increase. During the same period, Hive Blockchain Technologies saw its share price rise by 100 percent.

With the price of Bitcoin rising more than 28 percent since early 2023, the MVIS Global Digital Assets Mining Index, which consists of 20 members, has increased by more than 64 percent to date. This is the best month for the index since its inauguration at the end of 2021, reported Coinspeaker.

Meanwhile, the Luxor Hashprice Index, which measures how much a miner could expect to gain from the computing power set for the Bitcoin network, has increased by 21 percent this year. This shows that higher Bitcoin prices lead to greater rewards.

Despite the increase in BTC prices, the price is still trading at a 70 percent discount from its highest level of $69,000. After last year's digital asset fall, miners who lacked cash have reduced their loans after experiencing severe financial pressure.

Core Scientific, the largest Bitcoin miner with computing power declared bankruptcy in December. This shows how difficult the situation is for the current crypto mining industry. Head of digital asset research at VanEck's fund manager, Matthew Sigel, stated that the substantial debt rate of many crypto miners and the sharp decline in the price of Bitcoin mining rigs is a factor that makes the situation even more difficult.

Ia menambahkan bahwa dengan situasi ini, lebih menarik untuk memulai usaha penambangan Bitcoin baru daripada mencoba memilih bagian bawah di banyak saham yang terdaftar saat ini. Namun, ketika inflasi membaiki, pasar yang lebih luas telah berubah be optimistic bahwa kenaikan suku bunga lebih lanjut tidak akan agresif, sehingga investasi berisiko seperti crypto telah rally sejak awal 2023.

However, if this market narrative shifts, rapid gains in crypto can reverse very quickly, this shows that the situation in the crypto industry is highly volatile and important to remain vigilant and monitor developments.