Bitcoin mining stocks outperform BTC in 2023, but on-chain data points to a potential stall

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Bitcoin mining stocks have posted triple-digit gains to outperform BTC in 2023, but recent actions from mining companies suggests that they are preparing to secure some profit.

price by a huge margin amid the recent bullish price action in the top cryptocurrency.

The average year-to-date gains in 2023 across the stocks of top nine public Bitcoin mining firms by market capitalization stood at 257.14%. The figure is almost three times higher thanthat mining stocks enjoy. Leveraged beta suggests that during Bitcoin upside, these stocks outperform. Whereas, when Bitcoin slumps, they face deeper downside risk.

Due to a high levered beta, Bitcoin’s price performance will remain a crucial factor in determining the direction of mining stocks. The trends within the mining sector show that miners are positioning themselves for the long-term by buying more machines. However, they have yet to exhibit accumulation levels that match previous bull markets, suggesting that the uptrend in the stocks could stall in the medium term.Multiple mining companies made expansion moves in the past month which added to the positive sentiments and long-term value of the stocks.

Hut 8 Mining Corp. merger with US Bitcoin Corp increased its total hashrate to 9.8 EH/s, making it the third largest public mining entity in the U.S. However, it also took a debt ofAt the same time, Riot Blockchain entered into a $170 million deal with mining hardware manufacturer MicroBT to nearly double its hashrate capacity by 2024 upon full deployment.

 

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Bitcoin mining companies outperformed Bitcoin by a huge margin amid the recent bullish price action in the top cryptocurrency.

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