In the past year, the soaring of digital currencies represented by Bitcoin has made "outsiders" sigh, but who would have thought that it is the crypto mining stocks behind it that can leave Bitcoin's yield far behind.
The big temptation brought by the rise of Bitcoin has caused more and more listed companies in the U.S. stock market to buy mining machines and into the crypto market, relying on cheap electricity and specialized mining hardware to mine Bitcoin to make profits. According to FundStrat research, in the past year, cryptocurrency mining stocks have outperformed Bitcoin: For every 1% increase in the price of Bitcoin, crypto mining stocks have risen by an average of 2.5%. The "modern digital gold rush" triggered by digital currencies such as Bitcoin means that crypto mining stocks may rise further. However, FundStrat also said that mining company stocks may be a riskier investment in Bitcoin. When cryptocurrencies enter a bear market cycle, mining stocks are expected to fall more than Bitcoin. The rush of miners to "mining" has also set off a "graphics war" between miners and gamers. Crazy miners-"High Beta" Bitcoin Leor Shimron, vice president of digital-asset strategy at Fundstrat Global Advisors, compared these miners to the "high beta" of Bitcoin in a report. These mining companies are quite young and have no historical records, and some have entered the market through "roundabout" methods. For example, the larger Riot Blockchain was scrutinized by regulatory agencies at the beginning of its establishment. However, Shimron said that during the Bitcoin downturn, they made a lot of investment in hardware and facilities to help them "make a big show" in the current Bitcoin bull market. Their market value has exceeded 1 billion US dollars. According to his analysis, in the recent digital currency bull market, Bitcoin has risen by 900%, and the average return of mining companies is as high as 5000%. In Shimron's words, Bitcoin miners constitute the core pillar of the Bitcoin blockchain. Because they "consume electricity, solve cryptographic problems by guessing and verifying," and earn income in the form of mining Bitcoin. According to Shimron's analysis, for every 1% change in the cryptocurrency price, the mining company generates a return of 2.5%. Although there is not enough historical data to support the conclusion, the performance of cryptocurrency mining companies is related to the price of Bitcoin, and the trading status of Bitcoin has enlarged its upward and downward space. Shimron attributed the profitability of miners to cheap electricity and specialized mining hardware. As the price of Bitcoin rises, miners will build new mining machines or upgrade their hardware with more powerful and efficient machines. The battle for graphics cards Without comment, the large amount of electricity consumed by miners' mining has become one of the biggest doubts from the outside world. The long-term high-load operation of "mining" equipment generally results in a shorter lifespan, which has set off a "graphics war" between miners and gamers. The graphics card mainly completes the repetitive and simple tasks dispatched by the CPU. Mining is to use a chip to perform a calculation related to a random number and exchange it for virtual currency rewards after the answer is obtained. This calculation also has the characteristics of repetition and uncomplicated. The graphics card and the mining algorithm's "solving" needs coincide, and they are very good mining tools. The wanton looting of high-end graphics cards by wealthy miners has aroused strong dissatisfaction among gamers. At present, the NVIDIA RTX 30 series that is popular among miners is hard to find. RTX 3070 is quoted at 8,500 yuan, which is double the price. In this regard, Nvidia also had to offer two major measures to reconcile the contradiction between miners and game players. First, Nvidia announced that it would limit the mining capabilities of the Force RTX 3060 officially released on February 25 to "persuade" miners to purchase the graphics card; second, the company has launched a series of professional mining cards in an attempt to remove miners from the game. The players move away on the track. However, professional mining machines only have a single attribute of mining. Once a mining disaster occurs (the currency price plummets), the mining machine will become a waste product. It can be seen that for the professional mining cards launched by NVIDIA, whether miners buy it is still a question.
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