Crypto stocks underperform as Bitcoin slides even after some solid earnings
Crypto-related stocks - primarily crypto miners - that recently posted earnings, signal mixed results, though it appears most are seeing increased costs hurting profitability as they continue ramping up crypto mining production, accumulating $Bitcoin(BTC.CC$ and buying equipment.
The group includes miners $Marathon Digital(MARA.US$, $Riot Platforms(RIOT.US$, $Hut 8(HUT.US$, $Hive Blockchain(HIVE.US$, and $Bitfarms(BITF.US$. Crypto service platform $Bakkt Holdings(BKKT.US$, $Voyager Digital Ltd(VYGVF.US$, and crypto trading and asset management firm $GALAXY DIGITAL HLDGS LTD(BRPHF.US$ also posted their earnings recently.
Still, shares of these companies trade in net negative territory in the past week.
Bitcoin's 14.2% five-day correction likely has more to do with the group's weakness in price action in the past five days. Bitcoin, though, is off by 12.5% on a M/M basis, while most of the group enjoy positive returns, as seen in the chart below.
Bitcoin continues to trade under $60K key level, down ~17% from its all-time high, amid China clampdown and new U.S. tax-reporting provisions.
Still, in the past year, Bitcoin lags the most by a wide margin.
Crypto miners' earnings:
Topping off crypto miners' stock earnings with Marathon Digital, the company's shares initially fell after missing the Q3 crypto mining revenue consensus estimate.
Still, MARA's earnings per share topped the estimate and jumped significantly from the prior year.
Its revenues are expanding at a significant pace, though the cost of revenue climbed nearly 10-fold.
Of course, the revenue miss isn't stopping the company from increasing its Bitcoin holdings, or deterring its "hodl the bitcoin we mine" approach, said MARA CEO Fred Thiel.
One day later, Hut 8 Mining shares rose nearly 20% after it generated record crypto revenues in the third-quarter, beating both earnings and revenue Wall Street expectations.
It mined almost triple the amount of digital assets than in Q3.
Still, HUT falls 18.1% in the past five sessions, erasing most of those gains, amid Bitcoin's weakness.
Below is a snapshot from HUT's income statement regarding its explosive growth in operating income.
HIVE Blockchain's Q2 2022 revenues came in better-than-expected, but shares drifted lower as Bitcoin screamed lower.
Just like HUT, HIVE Blockchain's digital currency mining revenues rose significantly from the year-ago quarter thanks to crypto price increases and more BTC and $Ethereum(ETH.CC$ production.
"And a big part of that is not only huge growth in our Bitcoin production and footprint, but in the back of that is the theory in the steady Eddie revenue, high gross profit margin of mining Ethereum, particular in Sweden, and also in Iceland," HIVE CEO Frank Holmes said in the earnings call.
Meanwhile, Bitfarms Q3 earnings trailed consensus, with Bitcoin production up 38% from the prior quarter. Shares fell after the earnings release hit.
Bitfarms CEO Emiliano Grodzki says the company is expected to begin operating in Paraguay by the end of this year, with Canada and the U.S. in production.
"With our strengthened balance sheet and flexible capital plan, we are well positioned to reach our targeted exahash rate of 3 by March 31, 2022, and 8 by December 31, 2022."
Similarly, crypto miner Riot Blockchain, which fell short of the Q3 revenue consensus estimate, saw substantial growth in BTC production, with improvement in mining revenue margins resulting from Bitcoin's rise during the quarter, in addition to operating new generation miners.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Brandon Golden : I understand that funds and banks don't want crypto on their balance sheet, so investing in crypto companies makes some sense.
But for regular people, if you like crypto, for the love of geebus, just buy crypto.
Geminiasianboi : LOL $SI up 10.8% to an ATH this past Friday
Articles with headlines like this one's, that don't discuss $SI, are proof that $SI is still under the radar. Buy $SI before it gets on ppls radar, ppl
IT farmer : Bitcoin also has earnings nowadays?
Marvan IT farmer : My thoughts exactly lmao
r8ntdxstAw : Digital tulip stocks lose ground after digital tulip prices backslide.
7KMNtrPYB1 : earlier this month, smart money sold to dumb money
Yiggee : k