© Reuters Bitcoin surges past $60,000 amid ETF frenzy, but mining stocks underperform
Bitcoin (BTC) has surpassed the $60,000 mark for the first time since November 2021, driven by a continued influx of investments into exchange-traded funds (ETFs). Over the past two days, ETFs have seen a combined net inflow of $1.1 billion, and demand for Bitcoin ETFs has exceeded the daily production of Bitcoin by miners by approximately ten times.
Amid this upward trajectory, Bernstein analysts highlighted an interesting trend: the underperformance of Bitcoin mining stocks compared to the performance of cryptocurrencies.
Over the past 120 days, following the increased likelihood of ETF approval, and especially since the launch of ETFs on January 10, Bitcoin mining companies have seen the value of their shares outpace Bitcoin's gains.
Specifically, Cleanspark (NASDAQ 🙂 and Marathon Digital (NASDAQ 🙂) saw increases of approximately 380% and 250%, respectively, compared to a 70% increase in the price of BTC during the same period.
However, amid Bitcoin's rise above $60,000 on Wednesday, this trend did not persist.
Notably, the flagship crypto asset was up 6% on the day, especially ahead of miners like Riot Platforms (NASDAQ 🙂 and CLSK, which fell 7.5% and 10%, respectively.
Analysts note that Bitcoin in violent rallies like today absorbs liquidity from mining stocks. “Retail traders end up chasing Bitcoin on days like today, instead of mining stocks,” they wrote.
They expect Bitcoin miners to have a higher beta for at least a reasonable period of time, i.e. at least one BTC microcycle, for example, the pre-ETF rally, the post-ETF rally, or throughout the entire Bitcoin cycle. BTC, which would normally last between 18 and 24 months. The upper beta is not daily,” they added.
