Investor interest in crypto mining stocks rekindled this year, as bitcoin prices surged past $20,000. Bitcoin prices are up a massive 74% in the past two months and have been on the upswing for the better part of this year.
The increase in bitcoin prices complimented the prices of products related to the industry. Sectors benefiting from the heightened investor enthusiasm include semiconductors, online payment systems, and brokerage companies. With the massive uptick in crypto prices, investors are looking at the best crypto mining stocks to buy with the best upside potential.
For those who don’t know, cryptocurrencies are essentially digital currencies where every transaction is transparent, verified and maintained in a public ledger. Bitcoin, the industry’s benchmark, has been rising again after its debacle in 2017. The pleasant jolt in its prices comes at a great time, where investors are looking to secure their investments as much as possible.
Let’s now look at some of the best crypto mining stocks which will carry their momentum next year:
Crypto Mining Stocks: Marathon Patent Group (MARA)
Marathon Patent Group is North America’s largest bitcoin self-mining company. The company was previously in the uranium exploration, real-estate business before making waves in the world’s cryptocurrency.
It gained a lot of momentum due to rising bitcoin prices and positive investor sentiment in the industry. Hence, MARA stock’s 12-month returns are at a mind-boggling 1,361%.
With its recent mining rig purchases, the company expects to have a 1,100% increase in capacity by the second quarter next year. Additionally, it has $27.1 million in cash and zero long-term debt, making it financially robust.
Riot Blockchain (RIOT)
Riot Blockchain provides mining hardware services for blockchain networks and receives cryptocurrency in return. It primarily focuses on bitcoin but has other significant cryptocurrencies to its name. Moreover, it has its investments in a few blockchain technology companies.
The favorable bitcoin price environment led to RIOT stock gaining a massive 950%.
In the past year, the company significantly beefed up its mining capacity. It is relocating its mining operations from Oklahoma City to Massena, New York, to improve margins and limit costs. Sales and administrative expenses have been a thorn a concern, and will be a focal point in expanding its margins.
The company is funding new miner purchases through its organic resources. With a minimal debt burden, its financial flexibility is impressive and will help keep its costs down.
CleanSpark provides software and management solutions for microgrids. Its services include intelligent monitoring, energy market communications and microgrid designs to ensure a microgrid runs effectively.
The company has recently forayed into the crypto business in a big way by acquiring ATL Data Centre, a cryptocurrency miner having over 3,000 bitcoin mining units.
Hence, CLSK stock’s 12-month returns are at an impressive 351%.
This year’s financial results also were impressive, considering how its revenue has grown 122% from the previous year. However, it’s operating at a loss of $15 million, which hasn’t narrowed down much since last year. Operational expenses, particularly its professional fees and payroll expenses, are to blame for its unimpressive bottom-line.
The company’s acquisition of ATL Data Centre already earned it more than 10 bitcoin so far. It has plans to quadruple mining capacity soon and use its energy management technology to limit its energy expenses.
Bitcoin mining is energy-intensive and CleanSpark could create a vertically integrated mining operation through renewable energy sources and its management technology.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.