Cryptocurrencies continue to be volatile, with leading digital assets such as Bitcoin (BTC-USD) and Ethereum (ETH-USD) enduring wild swings higher and lower.
So far this year, BTC is down 11% while ETH is down 20%. And while there are a growing number of ways for investors to gain access to cryptocurrencies, from directly holding the digital coins in crypto wallets to putting money in crypto-focused exchange-traded funds (ETFs), there are also cryptocurrency mining companies to consider.
These are stocks of companies, based in the U.S., that are dedicated to mining for Bitcoin, Ether and other proof-of-work digital assets around the clock.
While shares of crypto miners can be volatile, too, these companies are enjoying strong growth in a maturing industry and attracting attention from a growing number of Wall Street analysts.
Our research shows that the following are three of the best cryptocurrency mining stocks to own now.
Source: TradingView
Best Crypto Mining Stock to Buy Now: Riot Blockchain (RIOT)
Castle Rock, Colorado-based Riot Blockchain is one of the biggest cryptocurrency mining companies in the world with 4,884 Bitcoin currently on its balance sheet.
The company has been growing at a brisk clip, reporting 2021 year-over-year revenue growth of 1,665% to $213.2 million. Total revenue from cryptocurrency mining operations in 2021 amounted to $184.4 million, up 1,433% from $12 million in 2020.
RIOT stock jumped 8% immediately after the company issued its latest quarterly results. However, year to date, the stock is down 9% at $20.75 per share, close to the 11% decline in BTC so far in 2022.
However, while Riot Blockchain has been growing at a blistering pace, it remains unprofitable, having reported a net loss of $7.9 million for all of 2021.
Management seems unconcerned with the losses and continues to accelerate its growth. Riot Blockchain has reported that it increased its mining operations (hashing capacity) by 444% last year, and continues to add hundreds of Bitcoin to its balance sheet each quarter.
Looking ahead, management is forecasting a coming wave of consolidation in the cryptocurrency mining industry as smaller players get gobbled up by bigger operators such as Riot Blockchain.
Marathon Digital Holdings (MARA)
Headquartered in Las Vegas, Nevada, Marathon Digital Holdings is another of the biggest cryptocurrency miners. The company currently holds nearly twice as many Bitcoins (8,956) as rival Riot Blockchain.
Marathon Digital’s Bitcoin holdings are worth just over $380 million based on the current price of $42,635.00 per digital coin.
Marathon Digital mined 1,098 BTC in the fourth quarter of 2021, which was a 600% increase from the same period of 2020. Total revenue generated by Marathon Digital for all of 2021 was $150.5 million, up 3,320% from just $4.4 million realized a year earlier.
Adjusted earnings per share (EPS) in the fourth quarter came in at 36 cents, slightly higher than the Wall Street consensus forecast for 35 cents per share.
While Marathon Digital has been chugging along in terms of its cryptocurrency mining operations, the stock has also been under pressure as prices for leading digital assets such as Bitcoin and Ethereum have slid lower amid volatile trading.
Year to date, MARA stock is down 11% to about $29.25 per share, mirroring Bitcoin’s decline. As with other major miners, Marathon Digital’s share price tends to move in tandem with the price of BTC.
Best Crypto Mining Stock to Buy Now: Core Scientific (CORZ)
A smaller but still significant player in cryptocurrency mining is Core Scientific. Based in Austin, Texas, Core Scientific’s stock recently popped 6% after investment bank BTIG initiated coverage of the crypto miner with a “buy” rating and an $18 price target, suggesting 102% upside from the current share price of $8.91.
The company, which went public earlier this year through a reverse merger with a special purpose acquisition company (SPAC), owns crypto mining rigs as well as infrastructure to host those rigs for a number of outside clients.
Core Scientific reported that it mined 1,077 Bitcoins in January of this year alone, suggesting big growth at the miner.
In its analysis, BTIG forecast that Core Scientific’s global market share could rise to 5% in coming years, noting that the company currently has seven cryptocurrency locations scattered across the U.S., with another two sites under construction.
And, BTIG likes Core Scientific’s “hosting business” that enables outside companies to effectively rent its mining rigs, which provides an additional, stable source of revenue that could lead to a lower cost of capital.
CORZ stock is down 15% since it made its market debut but has risen 13% since BTIG issued its bullish report on the company.
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.
