Some bitcoin miners are giving investors an opportunity to get in on the cryptocurrency’s big postelection rally. Pure play bitcoin miners have been lagging this year for a host of reasons. Some names in the sector pivoted or expanded operations to AI data centers. Additionally, the launch of bitcoin ETFs in January gave investors a new vehicle for getting bitcoin exposure, which may have lowered demand for these stocks. Meanwhile, the halving on the Bitcoin network in April slashed miners’ revenue in half, and the price of bitcoin – which can make mining more lucrative as it rises – drifted sideways for most of the year. CLSK RIOT,MARA 5D mountain Bitcoin mining laggards have been outperforming in the the recent crypto rally Now, with bitcoin consistently reaching new records since Election Day — a trend that’s expected to continue through next year — the mining laggards could be catching up, analysts say. “The recent relative underperformance of mining stocks creates a very compelling buying opportunity for investors, and I expect there to be a bit of a catch-up trade for the group when we look out over the next twelve months and see the most upside potential in the pure-play miners, given that they are the most levered to BTC and that they have lagged their peers that have made the pivot to AI,” Mike Colonnese, an analyst at H.C. Wainwright, told CNBC. Bitcoin mining stocks are among the best investment vehicles for investors to express their bullish outlook on bitcoin, he added, and have outperformed bitcoin itself in bull markets prior to 2024 by about 2.5x. The two biggest miners, Riot Platforms and Mara Holdings , are down 10% and up about 3% for the year, respectively, despite the recent rocket rally in crypto and other risk assets. CleanSpark , Colonnese’s top pick in the sector, is up nearly 50% year to date. But among the diversified miners, TeraWulf has soared 246% in the same period and Core Scientific has a whopping 407% gain. Iren , formerly known as Iris Energy, has advanced 68%. “We believe the pure-play miners will be the catch-up trade from here,” Bernstein analyst Gautam Chhugani said in a note Monday. “Both RIOT and CLSK have 1 [Gigawatt]+ energy assets and are positioned to be amongst top three miners. We know, investors like miners for energy [and] AI optionality, but it’s time to buy bitcoin miners for the Bitcoin trade.” On Monday, Riot jumped more than 16%, while Marathon and CleanSpark gained nearly 30% each. Meanwhile, Iren rose 16%, TeraWulf added more than 6% and CoreScientific advanced 3%. Among the promises Trump made to the crypto industry during his campaign for reelection he said he wanted to keep all bitcoin mined in the U.S. Bitcoin miners, much like other businesses in the crypto industry, have felt held back by the Biden administration, which has attempted to mandate energy surveys on miners and proposed a 30% excise tax on them. —CNBC’s Michael Bloom contributed reporting.
