Cryptocurrency stocks are seeing big gains on Friday as bitcoin (BTC) climbs back above $30,000 and the broader equity markets make considerable headway.
CleanSpark (CLSK) and Hut 8 (HUT) are among the bigger movers, up nearly 20% each. Shares of other miners such as BitNile (NILE), Marathon Digital (MARA), Bitfarms (BITF), and Riot Blockchain (RIOT) rose more than 10% on Friday.
However, today's rally appears to be little more than a blip in the longer-term charts, as most mining sectors are down 50% or more this year and have fallen by even larger percentages since the bitcoin price peaked in the fourth quarter of 2021.
"Given the falling bitcoin price, the profitability of these companies will continue to be under pressure," said Jaran Mellerud, an analyst at Arcane Research. However, he added that the larger mining companies - with lower operating costs than the industry average - should be able to ride out the trough of this bear market.
Mellerud also pointed out that the larger companies could take advantage of favorable prices to go hunting for struggling companies.
In fact, Mike Levitt, CEO of Core Scientific (CORZ), said this week that his company is already receiving calls from other mining companies that may be interested in selling due to their lack of access to capital markets.
Canaccord analyst Joseph Vafi, meanwhile, expressed optimism about Hat 8 on Thursday, pointing to the company's relatively long track record (in operation since 2018) and the $185 million in bitcoin on its balance sheet as positive factors going forward.
As of late Friday morning, bitcoin is up 5% at $30,575, the Nasdaq is up 3.5% and the S&P 500 is up 2.3%.