Right as bitcoin struck its new all-time high of roughly $28,700 in late December of last year, several bitcoin mining stocks rose to new levels, thereby suggesting that mining is becoming a much more lucrative business and that the world’s number one digital currency is more profitable than ever.
Bitcoin Mining Companies Are Growing Like Never Before
About a week ago, shares in companies such as Riot Blockchain and Marathon Patent Group experienced their highest peaks in years. The sentiment is that now that bitcoin is reaching new pinnacles in terms of its price, mining equipment is not only becoming more difficult to manufacture, but extremely hard to get.
The fact is that there are more and more people getting into the mining sector, which makes it hard for newbies to get their hands on the mining machines they’ll need to extract new coins and make names for themselves in the industry.
We all know what happens when something becomes rarer. It becomes more valuable, and this appears to be the case with mining equipment. Given the shortage, this equipment’s value is surging like it never has before, and thus stock shares in crypto mining companies are experiencing huge pushes.
Shares in Riot surged by roughly 18 percent over the course of 24 hours. Initially, these shares closed at just over $13 each on Christmas Eve 2020, though the following week, stock in Riot Blockchain was being sold for about $15.49. Marathon experienced even larger boosts, jumping 28 percent and selling for about $14 at the time of writing.
Marathon is looking to capitalize on its newfound status as a major mining firm and has announced that it is looking to purchase as many as 70,000 new Antminer machines from Bitmain, arguably the largest mining company in the world. The purchase is slated to cost as much as $170 million at press time and will bring the number of machines in Marathon’s operations to more than 103,000.
Riot has considerably smaller plans but is still looking to make more equipment available. The company has announced that it will purchase as many as 15,000 new mining machines as a means of keeping extraction costs down and retain a lasting competitive edge for the firm.
Adding to Their Operations as Equipment Becomes Rare
Other companies to see their mining shares surge included Clean Spark, which says its stock jumped by as much as 16 percent early last week. The company is also looking to purchase about 1,000 new mining machines.
It is estimated that following the recent price spike, bitcoin now requires as much energy as a country that houses 200 million people. As it stands, about two-thirds of bitcoin production stems from Chinese operations, while the United States has taken second place and accounts for about seven percent of all bitcoin production.