Mining companies grow much faster than BTC price

Hello my fellow bloggers! Bitcoin is digital gold. Before BTC we called oil the black gold. Oil built and entire industry around it where stocks of oil companies grew much faster that oil price. It seems the same now happens with Bitcoin. Let’s dive in and investigate!

Source

This is not a secret that mining Bitcoin is now the most profitable type of mining. Even oil doesn’t bring back your initial investments this fast. If you want to mine gold or any other resource, you need to invest a huge sum of money. The return time for your investments will be in years. For BTC you just need to find a place with relatively cheap electricity, by equipment and start mining. According to market data, an average BTC miner or a GPU card returns its price in BTC in just 7-8 months.

Mining BTC is still a complicated business. Buying stocks of mining companies is easier. The chart above compares stocks of 4 large mining companies to BTC price. As you see, they brought much more profit than BTC itself. In 2020, most of tech companies saw an increase in price. Tech companies involved with Bitcoin just absolutely blew up. I find this interesting and slightly unexpected. The profit of miners depends on BTC price moves. I expected stocks to grow as fast as BTC itself. Stocks growing several times faster than BTC price, well, it doesn’t look right. Almost like FOMO for miners is higher than FOMO for crypto itself. What we will see on the bear market? Will these stocks drop several times faster than BTC? I guess we will see this when the bullrun ends.

Disclaimer

I’m not a financial of any kind. I encourage you to check all information yourself and make decision only based on your own opinion. All articles are created for solely entertainment purpose.

If you like this post please vote for it and follow my blog. Feel free to share your thoughts in comment section.