A slew of crypto mining stocks are up today on positive news out of the European Union.
So what do you need to know?
Shares of Riot Blockchain (NASDAQ:RIOT), Marathon Digital Holdings (NASDAQ:MARA) and Hut 8 Mining (NASDAQ:HUT) are each up more than 5% today. Other miners like Bitfarms (NASDAQ:BITF), BitNile (NYSEMKT:NILE) and Bit Digital (NASDAQ:BTBT) are also all in the green.
The catalyst appears to be an update that a legislative proposal in the European Union is once again moving forward without a provision that would restrict proof-of-work cryptos.
The news takes pressure off of Bitcoin (BTC-USD) miners who were concerned they would be targeted over the energy intensity of their operations. Also, late last week, an analyst from Stifel said that several crypto mining stocks now look undervalued after their recent selloff.
What Happened With Crypto Mining Stocks
Crypto fans have been closely watching the Markets in Crypto Assets regulatory package in the European Union, which seeks to protect consumers and create guidelines for digital asset regulation. Parliament members had already struck down an amendment that would add in restrictions on proof-of-work cryptos. However, last week, concerns rose again that some members could push to add those restrictions back in.
Now, as the package moves on to the next round of discussions, proof-of-work cryptos appear safe.
Why It Matters
Many countries such as China and Kazakhstan have banned cryptocurrency mining due to its massive energy consumption. There is ongoing fear that the same type of bans could happen in Europe and set a precedent that then might spread to the United States. Following the unveiling of President Joe Biden’s executive order on crypto, the energy consumption of Bitcoin is in focus.
These concerns have pressured crypto mining stocks in recent months, as investors worry how they will navigate potential new regulations or energy requirements. Right now though, Stifel analyst Suthan Sukumar sees value in several names.
Crypto mining stocks get a nice bounce today following news of the E.U. legislation and on the bullish analyst note. How long they rally lasts is anyone’s guess. Shares of crypto miners had fallen sharply this year, with some stocks down more than 10%.
On the date of publication, Joel Baglole 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.