• Bitcoin mining stocks ended 2022 battered and bruised due to market volatility.
• The start of 2023 saw a rally in bitcoin’s price, leading to improved mining economics.
• Many public mining companies traded as literal penny stocks by the holidays.
Year-End Troubles for Bitcoin Mining
2022 was arguably the worst year on record for bitcoin mining. Every market suffered from the consequences of unprecedented recklessness by central banks around the world, leading to share prices of many public mining companies being relegated to trading as literal penny stocks.
New Year Rally
The start of 2023 saw an unexpected and wildly bullish start for publicly-traded bitcoin mining companies. Companies like Riot Platforms, Marathon Digital and CleanSpark have all gained between 40% to 110%, thanks in large part to a sustained rally in bitcoin’s price since New Year’s Day, which has gained over 44%. Hash rate set new all-time highs in January even as hash price jumped 25%.
What is a Penny Stock?
Penny stock refers to the stock of a small company that trades for less than $5 per share and can trade on large exchanges or via over-the-counter (OTC) transactions. By the end of last year, many bitcoin mining companies had shares trading below a single dollar.
Bitcoin Mining Penny Stocks Data
Bitcoin fell by roughly 65% in 2018, dragging down miners with it. As such, some companies like Bitmain had share prices drop below 10 cents while other larger players such as Canaan Inc traded at less than $1 per share at points during 2019 and 2020.
It remains unclear how long this current rally will last for publicly-traded bitcoin mining companies given their extreme volatility. Despite this however, investors are encouraged by the improvement in share prices and economic conditions so far this year – hopefully signaling better days ahead for miners across the board!