Crypto Miners Log Double-digit Stock Price Gains After CPI Report
Hive Blockchain and Marathon Digital hit daily gains of 37% and 31%, respectively, as markets closed Thursday
DALL-E modified by Blockworks
A number of crypto stocks booked massive — and elusive of late — gains in Thursday’s trading session, with crypto miners Hive Blockchain and Marathon Digital among those that skyrocketed amid signs of slowing inflation and a subsequent boost for bitcoin.
The share price gains across the sector followed Thursday’s US Consumer Price Index (CPI) report, which showed that core inflation rose 5.7% in December from a year earlier, marking another indicator of slowing or reversing inflation. November inflation’s metric had risen 6% year-over-year.
In the hours after the report, crypto companies notched big stock price boosts. The pops in individual digital asset-related equities mirrored a rise in token prices, as bitcoin and ether were up 8% and 6.4% in the past 24 hours, respectively, through Thursday’s close in New York.
Canada-based Hive Blockchain was also up on the day, then posting staggering stock gains of about 37%.
Hive is in the middle of a “massive efficiency upgrade,” the company said this week as it installs a new series of customized miners powered by Intel processors.
Meanwhile Marathon Digital rose by about 31% on the day, bringing its year-to-date increase to about 107%. The company mined 1,562 bitcoins in the last three months of 2022 — a quarterly record.
Rival miner Riot Blockchain was also up on the day, rising nearly 15%.
Despite a tough second half of 2022 for bitcoin miners, Riot CEO Jason Les had told Blockworks in October the company was one of the mining sector’s “best-positioned acquirers.” Some analysts have expressed high conviction in Riot due to its lack of debt.
Crypto bank Silvergate and Coinbase were also in the green, albeit not as much — notching Thursday stock price rises of about 13% and 9%, respectively.
It was a reversal for Silvergate, whose stock plummeted last week on news that the crypto bank was forced to sell off scores of assets at a major loss to fulfill $8 billion of customer withdrawals during the fourth quarter.
Coinbase has also been plagued by stock ups and downs as it seeks to reel in spending. The company said Tuesday it was cutting an additional 950 staff as part of cost-saving measures.
MicroStrategy, the largest publicly traded holder of bitcoin, was up about 8% on the day.
The stock price rises reflect appetite for risk. Double-digit daily gains for certain crypto stocks last week came as Wall Street grew confident that the Federal Reserve’s tightening path could end soon, one analyst said.
Tom Essaye, founder of Sevens Report Research, said Wednesday before the CPI print that inflation metrics would need to continue falling quickly if the market hopes to sustain a broader rally.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
