Crypto Mining Stock Plunge Slows and Records New Price Spike

The New Year seems to be going well for digital assets as their prices have been on a recovery trend. Bitcoin (BTC) has regained the price status that it attained before the implosion and bankruptcy filing of the Bahamian-headquartered cryptocurrency exchange FTX. At the time of this writing, the renowned coin was trading at $21,152.61 according to CoinMarketCap.

This spike in the price of BTC has contributed to the jump in crypto mining stock after a period of gloominess in the mining industry. 

Crypto mining stocks are currently at their best performance which is a first within the last twelve months after being threatened by high energy prices that led to huge debts in 2022. These debts and unavailability of finance have led to chaos in a handful of crypto mining facilities.

Crypto Mining Indexes Recoup Fast

On a recoup trend, the 20-member MVIS Global Digital Assets Mining Index which dropped by 88% last year, has now jumped by up to 64% even surpassing BTC’s 28% gain. Notably, this is the most outstanding growth that the gauge has experienced since it was instituted in 2021. Another metric responsible for determining a miner’s earning power based on the computing power of the Bitcoin network has also spiked.

This metric known as the Luxor Hashprice Index is already up 21% this year, somewhat indicating huge rewards from a higher BTC price. For now, Bitcoin price is still about 70% away from its all-time high of $69,000 in November 2021 and no one knows for sure if it would be reaching that figure soon. Also, there are several debates concerning how long the surge in crypto mining stock will last.

Matthew Sigel, head of digital-asset research at fund manager VanEck said “It appears more attractive to start a new Bitcoin mining venture than to try to pick the bottom in many of these listed stocks right now,” especially with the huge debts which some of these mining facilities have hanging around their necks.

Core Scientific filed for Chapter 11 bankruptcy in Texas at the end of last year stating that its income was not sufficient to cover its operational cost. As it stands, the debt-threatened miner has shut down about 37,000 mining rigs that belong to embattled crypto lender Celsius Network.

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