Over the last few weeks, Bitcoin (BTC-USD) plummeted from a high of $71.618 to a recent low of $56.814. Diving along with it were some of the top crypto mining stocks.
All thanks to profit-taking, Bitcoin ETF outflows, and vulnerability to the outlook for interest rates, which appears to have cooled with the Federal Reserve’s announcement on Wednesday. However, with a good deal of negativity priced in, investors may want to consider buying the dip in Bitcoin, and in BTC mining stocks.
Even better, as noted by Coin Desk, “Bitcoin whales may have finally started buying the dip,” IntoTheBlock said in an X post. “Historically, accumulations by these addresses have often preceded rises in bitcoin’s price.”
Technically, Bitcoin has also become oversold on RSI, MACD, and Williams’ %R. In fact, each time BTC has become this oversold with those indicators, it bounces back shortly after. If you pull up a two-year chart of BTC, you can see that’s happened multiple times. Better, the BTC miners tend to go along for the ride.
With recent weakness, I’d take full advantage of the dip in crypto mining stocks.
Crypto Mining Stocks: Marathon Digital (MARA)
After pulling back to support at around $16, Marathon Digital (NASDAQ:MARA) is starting to pivot higher with Bitcoin. From its last traded price of $17.07, I’d initially like to see it retest $24.
While we’ll learn more about what’s happening with earnings on May 9, we do know the company just produced another 894 Bitcoin in March, as compared to the 825 produced a year earlier. In addition, we know that in 2023, it produced 12,852 Bitcoin, a 210% jump from a year earlier. Revenues were up 229% for the year to $387.5 million year-over-year (YOY).
Net income also jumped to $261.2 million, or $1.06 per diluted share from a year earlier loss of $6.94, or $6.12 per diluted share. Adjusted EBITDA came in at $419.9 million from a 2022 loss of $543.3 million.
“2023 was a record-breaking year for Marathon, during which we achieved our primary objectives of energizing our fleet of previously purchased mining rigs and optimizing our performance,” said Fred Thiel, Marathon’s chairman and CEO.
“In 2023, we grew our hash rate 253% to 24.7 exahash; we improved our fleet efficiency 21% to 24.5 joules per terahash; and, we increased our Bitcoin mining portfolio to over 900 megawatts of total capacity, diversified across 11 different sites on three continents.”
Riot Platforms (RIOT)
Recent weakness in crypto mining stocks, like Riot Platforms (NASDAQ:RIOT) is also a buying opportunity.
Riot just posted a record net income of $211 million for its first quarter. Total revenue came in at $79.3 million from $73.2 million YOY. It produced 1,364 BTC in the quarter, which was down about 36% YOY.
It also saw Bitcoin mining revenue of $74.6 million in the quarter, as compared to the $48 million YOY.
“This quarter, Riot reported net income of $211.8 million and earnings per share of $0.82 which are new record highs for our quarterly results. Additionally, we reported $245.7 million in adjusted EBITDA for the quarter, another record high for Riot, rounding out strong financial performance for the quarter.”
From its current price of $10.30, I’d like to see it initially retest resistance at around $13.
Crypto Mining Stocks: Hut 8 Mining (HUT)
Hut 8 Mining (NASDAQ:HUT) is attractive on its latest pullback to support at $8.16. From here, I’d like to see HUT initially retest $12. Helping, analysts at Benchmark just initiated a buy rating on the stock, noting that its merger with U.S. Bitcoin Corp. “features a diversified business model with multiple revenue streams,” as noted by Seeking Alpha.
Plus, with new CEO Asher Genoot, the company is working to rebuild shareholder trust. “Asher Genoot replaced Jaime Leverton who resigned on February 8, after allegations of legal issues in relation to the merger between Hut 8 and US Bitcoin Corp causing the shareholders to file a lawsuit against the company,” as also noted by Seeking Alpha.
In addition, institutions have been buying HUT, too. BlackRock, for example, increased its position by 73,570 shares, as noted by Hedge Follow. Israel Englander’s Millennium Management picked up 132,800 shares in late December, as well.
CleanSpark (CLSK)
Another hot crypto mining stock buy on the cheap is CleanSpark (NASDAQ:CLSK). After pulling back to support at $15.94, I’d like to see the CLSK stock retest $24 shortly.
While the company will release earnings on May 9 after the bell, we’re hopeful the company will see a quarter similar to what it reported in February. At the time, CLSK increased its quarterly revenue to $73.8 million, a 165% jump year over year. Net income was $25.9 million for the quarter, or 14 cents per share, as compared to a year earlier loss of $29 million. Adjusted EBITDA jumped to $69.1 million from a loss of $2 million a year earlier, too.
As noted by CEO Zach Bradford, “In a single quarter we have covered nearly half the distance to reach our total revenue from last year. We beat all consensus estimates across the board, including revenue, EPS, and profitability.”
Crypto Mining Stocks: Valkyrie Bitcoin Miners ETF (WGMI)
Or, if you want to diversify with some of the top crypto mining stocks for less than $15 a share, there’s the Valkyrie Bitcoin Miners ETF (NASDAQ:WGMI).
With an expense ratio of 0.75%, the ETF holds mining stocks, such as Marathon Digital, CleanSpark, Riot Platforms, Bit Digital (NASDAQ:BTBT), Cipher Mining (NASDAQ:CIFR), and Bitfarms (NASDAQ:BITF) to name a few.
“The fund invests in stocks of companies operating across information technology, bitcoin mining operations including companies providing specialized chips, hardware and software or other services to companies engaged in bitcoin mining sectors.”
After pulling back to $14.36, it’s just starting to pivot higher again. From that current price, I’d like to see it retest $23 a share again shortly. What’s nice about an ETF like this is I can buy 100 shares for $1,436 at the moment, and be diversified with top mining stocks. Or, I could just buy one of its holdings – Nvidia, for example – and pay nearly $86,000 for 100 shares of just NVDA.
Cipher Mining (CIFR)
There’s also Cipher Mining, another one of the top crypto mining stocks to consider on a recent pullback. Last trading at $3.93, I’d like to see it retest prior resistance at around $4.94. Recent earnings were impressive. For the full-year, the company’s EPS loss of 10 cents beat estimates by 10 cents. Revenues of $126.8 million – up 4,071.1% YOY beat by $3.07 million.
Tyler Page, CEO of Cipher, stated:
“We are particularly excited about our expansion plans for 2024 and 2025. We expect to be at 9.3 EH/s by the end of Q3 2024 via the fully funded expansions at our Bear and Chief data centers and over 16 EH/s in the first half of 2025 via the fully funded phase one build of our Black Pearl data center.”
He added:
“We have the potential to grow to 25 EH/s by the end of 2025 with the eventual completion of Black Pearl. We have already seen the results we can achieve with our operational leverage. With the strength of our balance sheet, our expansion plans and proven track record on execution, we expect to be a clear winner through the halving and into the next cycle.”
Terawulf (WULF)
Terawulf (NASDAQ:WULF) is another attractive miner after its pullback to $2.17. It’s also been testing higher highs and higher lows since February. With that likely to continue, I’d like to see WULF retest prior resistance at around $3.25 initially.
Helping, analysts at Rosenblatt initiated a buy rating on the stock, calling it a “preferred way to allocate to Bitcoin below spot prices,” as quoted by Seeking Alpha. The firm added that the company’s vertically integrated infrastructure is “scarce and becoming more so as demand from hyperscalers grows,” positioning WULF “to win in a number of ways other miners cannot.”
Even better, according to the company’s CEO Paul Prager:
“We estimate that our cost to mine a bitcoin is among the lowest compared to other publicly-listed bitcoin mining companies at approximately $25,000 per bitcoin before the halving and $37,000 after the halving.”
WULF management also says it made significant progress on debt reduction and liquidity. It also said its fourth-quarter revenue jumped 23% quarter-over-quarter. Gross profits of $14.3 million jumped 34% over the same time frame. Net loss improved from $19.4 million in the third quarter to $10.8 million. Plus, its adjusted EBITDA ran to $16.4 million from $9 million.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
