- Two stocks of certain Bitcoin mining companies outperform BTC.
- While it’s not jubilant season for miners, short-term holders remain excited about the coin price.
Bitcoin [BTC] miners may have been going through a rough patch as several factors, including regulatory crackdowns and environmental impact concerns, have fueled a long season of woes for the industry.
However, there are indications that this dark period is drawing to a close, with some mining stocks showing signs of strength and resilience.
According to IntoTheBlock, the stock prices of the Mathent Patent Group and Riot Blockchain have outperformed BTC on a Year-To-Date (YTD) basis.
2023 is off to a good start #Bitcoin mining! Riot Blockchain and Marathon Patent Group, two of the largest public mining stocks, have significantly outperformed Bitcoin returns this year. pic.twitter.com/QsvVXhleOp
— IntoTheBlock (@intotheblock) June 3, 2023
Now higher than BTC
As of June 1, Bitcoin’s performance increased by 64.57%. Riot posted a 253.98% increase, while the value of Mathent’s shares rose 186.26%. Consequently, this put BTC back as the best performing digital asset of the year – a title it once held.
One reason for this turnaround is the increase income and allowances that miners have recently registered. This may be related to Bitcoin Ordinals adoption.
Certainly, the emergence of BRC-20 tokens also had its impact as the number of transactions and beating on the Bitcoin blockchain also increased. It is worth noting that the factors mentioned above were not the only ones that boosted the mining sector.
On the contrary, some mining companies have also taken steps to address the environmental concerns associated with the activity. This has resulted in the adoption of greener and more sustainable practices.
This not only helps to reduce the negative environmental impact, but also improves the public perception of the industry.
Security and the loopholes
Interestingly enough, Glassnode data showed that the Fee Ratio Multiple (FRM) had dropped to 7:38 PM. The FRM, calculated as the ratio of total revenue to transaction costs, serves as a measure of the security of the blockchain when blocks disappear.
Source: Glassnode
Because Bitcoin’s FRM was low, it means the asset was able to maintain its security budget through miner revenue without relying on inflationary subsidy. Conversely, if the FRM was high, miners would need block reward subsidies to maintain revenue.
However, indications from the hash ribbon revealed that the worst was not over for miners. The statistic uses the 30-day moving average (MA) to measure miner capitulation and identity buying opportunities.
When the hash ribbon went from light red to dark red, the capitulation could be considered over. But at the time of writing it was not there yet.
Source: Glassnode
Short-term holders yearning for more have a chance
Meanwhile, the same statistic indicated that Bitcoin may have offered a good buy opportunity. This was because the hash ribbon had entered the white-colored zone, indicating a switch in price momentum from positive to negative.
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In addition, short-term holders were still eager for a BTC rebound, despite its recent decline from Q1 performance. According to Crazyblock CryptoQuant Publicationsuggested the equilibrium level of the Spend Output Profit Ratio (SOPR) conclusion above.
Source: CryptoQuant
Used as an indicator of macro market sentiment, the SOPR reflects the extent of realized gains and losses that are moved up the chain. The analyst noted,
“These holders have shown a desire to be profitable and stay in the market, and the ‘equilibrium level’ of SOPR data has been restored and improved each time it approaches and falls below the No. 1 level, and we can say that these players still have interest and hope for price growth.”
