The risky bitcoin buy that's in a bigger bull market than the cryptocurrency itself

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Bitcoin mining stocks have outperformed returns of bitcoin cryptocurrency, but that upside comes with big risks and heavy capital spending and electricity use.

Over the past year, bitcoin miners greatly outperformed bitcoin, a dynamic that Fundstrat Global Advisors says will continue as the bull market plays out, but could turn violently to the downside in any correction.Shimron's analysis shows that the beta these bitcoin mining companies exhibit generates a return of 2.5% for every 1% move in the cryptocurrency.

This high cost of doing business in bitcoin mining results in low or negative free cash flow and muted earnings, Shimron writes. But the mining companies have for the moment captured the growth of the current bitcoin bull cycle as a result of their spending.recent Bloomberg piece Another driving force is continued adoption of new digital technology and digital assets from younger investors. "You see younger people gravitate to bitcoin and other digital currencies as opposed to gold and commodities and it speaks to a demographic shift. ... To them it's not crazy to interact with money in a purely digital way," he told CNBC.

After making the "smart move" during the bitcoin bear market to build out operations, current tech sector supply chain shortages caused by Covid may further help the positioning of these miners after the capital they have already put into specialized machines for the space.

 

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Risky bitcoin buy? What are you living in 2018 or what

This happened in 2017 as well price floor will be higher. Thanks for checking in.

It’s not the danger of a Bitcoin bull market but terrified by a probable bullshit market

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These analysts don’t have a clue that the mining companies are better than Bitcoin ETF. BC the mining companies are able to borrow cheap capital and not sell their mined bitcoins.

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