Sell-offs can be a double whammy with crypto-mining stocks in times like these.
Cryptocurrencies already are highly volatile digital assets, and the stock market has been more volatile latel as well. Crypto-mining companies can take a beating at both ends. For instance, when Bitcoin (BTC-USD) and Ethereum (ETH-USD) tumble they add to both actual losses and unrealized gains.
Perhaps it’s time to buy the dip on beaten-down cryptocurrency mining stocks before Bitcoin rises again and before bears leave the trading town.
Many crypto-mining companies identified below are aggressively growing their mining capacities this year. Productivity could surge in 2022 and beyond, and the size of their bitcoin wallets could swell as more coins are added to holdings. The values of holding could skyrocket too if by any chance Bitcoin’s price reaches Cathie Wood’s projected $1,000,000 mark by 2030. ARK Invest estimates BTC price will exceed $1 million by 2030 in its Big Ideas 2022 report.
Below is my selection of Crypto-Mining Stocks to Buy as Value Plays in 2022:
- Riot Blockchain (NASDAQ:RIOT)
- Hive Blockchain Technologies (NASDAQ:HIVE)
- Hut8 Mining (NASDAQ:HUT)
- Marathon Digital (NASDAQ:MARA)
- Argo Blockchain (NASDAQ:ARBK)
- Cannan Inc. (NASDAQ:CAN)
- Bitfarms (NASDAQ:BITF)
Let’s have a closer look at each.
Crypto-Mining Stocks to Buy: Riot Blockchain (RIOT)
Riot self-mines for bitcoin, hosts mining equipment for institutional clients, and manufactures parts for bitcoin mining equipment.
The company has invested heavily in growing its computing muscle from just 0.57 exahash per second (EH/s) in January 2021 to 3.9 EH/s by February 28 this year. Management targets tripling mining production capacity to 12.8 EH/s by January 2023, and this is a significant data point.
Computing capacity growth resulted in a 189% year-over-year increase in monthly production to 436 BTC for February even as mining difficulty increased last month. The company’s self-mined bitcoin holdings (or HODL) increased to 5,783 BTC going into March.
Bitcoin trades at around $42,500 places RIOT’s HODL in the $ 235 million ballpark. The company had a cash-rich balance sheet with more than $312 million in cash exit 2021. Good liquidity, higher potential production rates and a fairly strong balance sheet make RIOT stock a buy now before bulls return to Wall Street.
The company earned 3,812 bitcoins in 2021 and reported a 1,665% year-over-year increase in total annual revenue for $213.5 million for the year. A positive adjusted EBITDA of $82.4 million compared very well against a $6.3 million loss in 2020.
Hive Blockchain Technologies (HIVE)
Hive Blockchain Technologies is a bitcoin and Ethereum mining house with data centers (mining rigs) in low-energy-cost locations in Canada, Sweden and Iceland.
HIVE stock trades at a 60% discount to its late 2021 highs. Investors fled to safety during market turbulence, but shares could recover once cryptocurrency prices start skyrocketing again, and productivity rates rise.
The company produced 244.4 bitcoin and 1,814 ETH last month (or 377.1 BTC equivalent) to increase its holdings to an equivalent of 2,374 BTC on Feb. 28.
The company plans to have up to 4.0 exahash-per-second capacity installed in the crypto-friendly state of Texas. Its current capacity of 2.84 EH/s is currently enough to mine for about 13.5 bitcoin equivalent a day as seen in February.
HIVE stock is valued at around $797 million s one of the highest quality crypto-mining stocks you can find on the NASDAQ today.
Hut 8 Mining (HUT)
Hut 8 Mining has three cryptocurrency mining sites in Canada. It diversified its business by hosting over 400 commercial customers from diverse industries, including gaming, visual effects, and government agencies.
Diversification could help stabilize potential cash flows and dampen volatility on HUT stock going forward.
The company’s most recent computing power capacity of 2.36 EH/s was below that of Canadian peer HIVE, but HUT is executing for massive growth to achieve 3.35 EH/s by the end of this quarter.
Most noteworthy, Hut 8 has one of the largest self-mined bitcoin holdings among listed cryptocurrency mining stocks in North America. HUT touted its 5,826 BTC HODL as the highest self-mined amount held by any listed cryptocurrency firm in the world in February.
Crypto-Mining Stocks to Buy: Marathon Digital (MARA)
Marathon Digital Holdings is one of the most oversold crypto-mining stocks after a 65% drop from its recent highs recorded late last year.
The company held 8,956 BTC at the end of last month. Its February 2022 bitcoin production increased by 729% year-over-year to 360.3 BTC, up from 43.4 BTC during the same month last year. The company has produced 822 bitcoin during the first two months of this year and could do more wonders as it executes for more capacity growth.
MARA’s current installed mining capacity is around 3.8 EH/s. The company expects deployments of new equipment to accelerate in 2022. Marathon Digital could be a formidable industry giant if management’s plan to hit a 13.3 EH/s capacity by mid-2022 and 23.3 EH/s by early 2023 come to fruition.
Most noteworthy, Marathon recently started deploying bitcoin mining equipment powered by wind and solar farms this year. The company will use renewable energy that’s not impacted by grid rationing and usage controls during winter storms. Consistent productivity throughout the year could boost MARA stock valuation.
Argo Blockchain (ARBK)
Argo Blockchain is a cryptocurrency mining company with data center locations in the United States and Canada. The company currently has an installed hashing power (mining capacity) of 1.6EH/s and it targets achieving 3.7 EH/s by October this year.
Argo strongly believes it has some of the best mining margins in the crypto mining industry. Its 83% mining margin for the first nine months of 2021, appeared better than a comparable 71% peer average. An adjusted EBITDA margin of 73% trounced a peer average of 45%. Peers included Marathon Digital, Hut8, RIOT Blockchain and Bitfarms.
The company held about 2,685 bitcoins and equivalents early this month. A move to allocate 10% of its HODL towards its new subsidiary Argo Labs could allow the company to earn revenue from staking its coins and validating network transactions. The move also diversifies the business into decentralized finance (DeFi), the metaverse, and NFTs.
Crypto-Mining Stocks to Buy: Cannan Inc. (CAN)
Canaan Inc. is a deep value stock to consider even after its recent 37.7% urge as beaten-down Chinese stocks rallied from record lows.
Canaan develops supercomputing chips and manufactures digital blockchain computing equipment to satisfy an exponentially growing demand for cryptocurrency mining assets. The company also supplies the overall schemes for computer software and hardware for blockchain mining and operations.
CAN stock is down nearly 77% over the past 12 months. Its PE ratio of 2.6 makes the cryptocurrency mining stock a pure value play.
The company experienced blazing-fast revenue and earnings growth rates during the past year and fourth-quarter 2021 sales surged from RMB 38.2 million in 2020 to RMB 2.18 billion ($342.8 million). Earnings ballooned and the company exited 2021 with $421.2 million cash and cash equivalence.
Its market capitalization is $820 million, yet the company managed to generate $313 million in net income last year.
CAN stock is too cheap to ignore.
Bitfarms is expanding its hashing capacity from 2.3 EH/s targeting 3EH/s by the end of the first quarter of 2022.
Management plans to increase the company’s installed production capacity to 8EH/s by December to make Bitfarms one of the largest cryptocurrency mining stocks.
The company produced 298 BTC in February, a 67% growth from last year’s comparable monthly production.
Based in Canada, BITF gloated that it mined for Bitcoin at an average production cost as low as C$6,900 ($5,465) per coin during the third quarter of 2021. the number doesn’t include depreciation and amortization expenses for the mining “rigs”, but it speaks volumes about the company’s productive efficiency.
Bitfarms held over 4,883 BTC as of Feb 28, 2022.
On the date of publication, Brian Paradza did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.