A Canadian mining company was the only one to outperform BTC in the third quarter. Investors estimate that an upward trend for the emerging market will arrive in the fourth quarter.
Bitcoin (BTC) proved to outperform public cryptocurrency mining company stocks in the third quarter of 2021. During that period, many of those companies were in the red.
Calculations from Compass Mining indicate that leading mining companies, except for Hut 8, posted lower returns than Bitcoin. There was an average of returns on investment (ROI) of 23% for BTC and up to -25% for American mining company Riot.
That comes as the fiscal year of the United States draws to a close and investors are already targeting its fall reversals.
According to Compass Mining, users consider that the shares of mining companies are a very volatile investment compared to Bitcoin and other cryptocurrencies. For that reason, the price of the shares rises and falls alongside the first crypto asset on the market.
The shares of leading mining companies did not outperform Bitcoin in the third quarter. That happened even though the cryptocurrency’s price fell early in the period and has traded at around USD 40,000 in recent weeks.
Although shares in some mining companies have been profitable, the returns have been mostly poor.
The Value of Some Shares Suffer the Most Pronounced Falls
American public cryptocurrency mining company Riot is among those with the most pronounced falls in shares. It fell as much as Bitcoin advanced during the third quarter (-25%).
Makers of cryptocurrency mining hardware Ebang and Canaan had an unfavorable performance in the third quarter. They suffered double-digit drops in the costs of their shares by 19% and 31%, respectively.
The Mining Companies that Have Performed the Best
Only three mining companies saw green numbers in their shares during the third quarter.
Canadian companies Bitfarms and Hut 8 performed 21% and 101%, respectively. The second was the only one that managed to outperform Bitcoin in performance.
For its part, American company Marathon achieved a return of 14%, which was positive. However, it was not enough to show a better performance than the pioneering cryptocurrency.
Investors Estimate that there Will Be an Upward Trend in the Fourth Quarter
Most cryptocurrency investors estimate that the fourth quarter of the year will bring a steady upward trend to the market.
That would lead the shares of public cryptocurrency mining companies to post significant gains again. If not, the market would go into a bearish streak while stocks would risk giving up, even faster than Bitcoin.
Some Bitcoin Mining Companies Are Publicly Listed
In mid-October, two mining companies hit the Wall Street stock market. Argo Blockchain used the IPO (Initial Public Offering) method while Greenidge merged with Support.com.
Argo came to Wall Street with a package of 7.5 million shares, which they put up for sale using the abovementioned method.
Other large companies, such as Bitfarms, Marathon, and Riot, are also part of the stock market. They are the cryptocurrency companies that dominate the stock market, with 35% being publicly traded, according to CoinShares.
Among Bitcoin-related companies, mining companies had a higher valuation during the year, averaging 121%. Analysts believe that the ban and subsequent decline in activity in China made it profitable for all miners.
By Willmen Blanco