As cryptocurrency gains more widespread adoption and popularity, crypto mining companies are coming under the spotlight.
Instead of buying Bitcoin or Ethereum, crypto traders and investors are buying crypto mining stocks in order to gain "crypto exposure". These crypto mining stocks are attractive to the more risk averse trader as they tend to experience lesser market volatility than the underlying coins.
How are these companies making money? Like any other miner, these companies turn a profit by proverbially digging up something valuable for a lower cost than it can sell it on the open market. For cryptocurrency mining, getting coins is a function of computing power measured in hash rate.
What exactly is crypto mining? It's essentially the process of creating cryptocurrencies via the auditing and processing of cryptocurrency transactions. Miners verify data blocks on the blockchain, the digital public ledger that acts as the bedrock for Bitcoin and other cryptocurrencies.
So which firms should you be aware of? Here is an introduction to some of the most interesting stocks available:
Marathon Digital Holdings (MARA.us)
Marathon Digital Holdings, Inc., formerly Marathon Patent Group, Inc., is a digital asset technology company. The Company mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets. It operates in the Digital Currency Blockchain segment. The Company operates a Data Centre in Hardin, Montana, United States with a power capacity of approximately 105 megawatts. The Company also owns approximately 2,060 Application Specific Integrated Circuits (ASIC) Bitcoin Miners at a co-hosted facility in North Dakota, United States. Its mining hardware performs operations in support of the blockchain measured in hash rate or hashes per second.
Bit Digital Inc., formerly Golden Bull Ltd, incorporated on February 17, 2017, is a holding company. The Company is engaged in the bitcoin mining business through its wholly owned subsidiaries in the United States, Hong Kong and Canada. The Company's bitcoin mining operations hosted by third party suppliers uses specialized computers known as miners, to generate bitcoins a cryptocurrency. The Company's mining facilities and mining platform operate with an intent of accumulating bitcoin, which seeks to sell for fiat currency from time to time depending on market conditions. The Company has approximately 32,500 miners in the United States, Canada and China. The Company conduct its business through Bit Digital Hong Kong Limited, a Hong Kong company and operating entity in China, Bit Digital U.S.A. Inc., operating entity in the United States, and Bit Digital Canada, Inc., a Government of Alberta, Canada corporation and operating entity in Canada.
Bitfarms Ltd., a blockchain infrastructure company, mines cryptocurrency coins and tokens in North America. The company owns and operates server farms comprising computers that primarily validate transactions on the Bitcoin Blockchain and earn cryptocurrency from block rewards and transaction fees. The company's operating segment includes Backbone (from which it generates the majority of its revenue) and Volta. The Backbone segment operates server farms that support the validation and verification of transactions on the blockchain, earning cryptocurrencies for providing these services and Its Volta segment provides electrician services to both commercial and residential customers in Quebec. The company was founded in 2017 and is headquartered in Toronto, Canada.
Kalin Tsenov has a strong research background in economics with specific interests in Geopolitics and its impact on the Financial Markets.
He joined FXCM in 2018 after obtaining a Bachelor's Degree from Leeds Metropolitan University. Initially starting as a Business Analyst in the Payment Solutions department, he is currently a Product Specialist in the Firms Product & Strategy department.