Bitcoin Mining Stocks gain strong momentum

Bitcoin Mining Stocks Maintain Strong Momentum as $30K Support Holds Firm

Bitcoin mining has had a strong week, with several miners posting double-digit percentage gains. Bitcoin (BTC) rose more than 2% to $30,500, with Marathon Digital (MARA) up 14.6% for the session, and now ahead nearly 50% for the week. Hut 8 Mining (HUT) is higher by 15.9% Thursday and 37% for the week. Other Thursday movers include Stronghold Digital (SDIG), up 26%; Iris Energy (IREN), up 15%; and Bit Digital (BTBT), up 18%.

Despite these recent gains, the stocks remain sharply lower from year-ago levels, with Marathon Digital and Hut 8 each down about 50% year over year, and Stronghold Digital off roughly 80%. The combination of higher energy prices and a bitcoin price that remains more than 50% below its all-time high has been a challenging issue for these companies.

However, recent economic data suggests that inflation and the job market are cooling, which could give the U.S. Federal Reserve room to pause or even reverse its year-plus long string of interest rate hikes. The producer price index (PPI) for March tumbled to 2.7% year over year versus February's 4.9%, and against expectations for 3%. The core PPI – which strips out food and energy costs – fell to 3.4% from 4.5%. Alongside that news, initial jobless claims for the week ending April 8 rose by 11,000 from the previous week to 239,000, the highest level since January 2022, suggesting a slowdown in what had previously been a red-hot jobs market.

These developments are particularly relevant to the bitcoin mining industry, which has been grappling with the challenge of high energy prices for a long time. A reduction in interest rates may help reduce the overall costs associated with mining, potentially leading to an increase in profitability.

For companies like Marathon Digital and Hut 8, which have both made significant investments in mining hardware and infrastructure, the recent gains may be seen as a positive sign. While the miners are still significantly lower than year-ago levels, the fact that they are seeing some gains in the current market conditions is encouraging.

It is worth noting that investing in bitcoin mining stocks carries a certain level of risk, given the volatility of the cryptocurrency market. However, if you are interested in investing in this space, it is crucial to stay up to date with the latest developments and economic indicators to make informed decisions.

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