Crypto miners are back on track after facing challenges including debt and high-energy prices for almost a year as Bitcoin price skyrockets almost 40% in January. Crypto mining firms are turned on their machines back to bring a necessary lifeline to their cash-strapped businesses. As a result, crypto mining stocks have on average jumped 100% this month.
Crypto Miners Seek Financial Recovery
Risks of crypto miner capitulation declined significantly amid the market recovery in January. Bitcoin price rallied over $23,500, recording a nearly 40% recovery from lows.
According to data from Hashrate Index, the average hashrate or the computing power directed towards mining bitcoin rose to a record 280 exahash on January 20 when Bitcoin price jumped over $23,500.
The rise in hashrate indicates an uptick in crypto mining activity. Thus, it signals a recovery in the crypto mining industry after facing challenges including debt and high-energy prices for almost a year.
On-chain data shows an increase in transactions and the creation of new blocks in the blockchain. Several crypto mining firms took the opportunity of the bear market to purchase mining rigs for low prices or buy new energy-efficient mining machines at discounts. However, one of the largest miners Core Scientific failed to withstand the pressure and filed for bankruptcy on December 21.
“The sentiment among miners is better than in a long time. For many bankruptcy threatened players, the sudden increase in the bitcoin price is a lifeline,” said Jaran Mellerud, an analyst at Hashrate Index.
Share prices of listed companies including Marathon Digital Holdings, which soared 171% this month, and Hut 8, which climbed 150%. Other such as HIVE Blockchain Technologies, Riot Platforms, and Bitfarms soared 122%, 80%, and 197%, respectively.
Also Read: Top Crypto Mining Stocks To Buy In 2023
Tech Giants To Rescue Crypto Miners?
Despite running mining rigs at full capacity, mining companies are still experiencing financial troubles due to reasons such as high-energy prices, taxes, and regulatory pressure.
CryptoQuant CEO Ki Young Ju hopes that TradeFi or tech giants acquire U.S. crypto mining firms at a discount this year.
Also Read: Popular Analyst Predicts Further Fall In Ethereum Price To This Level
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
