The cryptocurrency industry is still young but growing rapidly. Cryptocurrencies are a relatively new form of digital currency, with Bitcoin being the most well-known example. Cryptocurrencies utilize blockchain technology, which makes possible the maintenance of a secure and decentralized record of transactions without the need for a trusted third party. Cryptocurrency mining companies use computers to solve complex computational problems in order to validate transactions on a blockchain and generate new cryptocurrency coins. Cryptocurrency can then be held and used for certain transactions or be sold for fiat currency. Some of the big names in the crypto mining industry include Riot Blockchain Inc. (RIOT), Canada-based Hive Blockchain Technologies Ltd. (HIVE), and Marathon Digital Holdings Inc. (MARA).
Crypto mining stocks, as represented by the Amplify Transformation Data Sharing ETF (BLOK), have outperformed the broader market. BLOK has provided a total return of 39.3% over the past 12 months, above the Russell 1000's total return of 23.6%. These market performance numbers and all statistics in the tables below are as of Dec. 17, 2021.
Below we look at the top three crypto mining stocks with the best value, the fastest growth, and the most momentum.
These are the crypto mining stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in the early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business's value. A business with higher sales could eventually produce more profit when it achieves (or returns to) profitability. The P/S ratio shows how much you're paying for the stock for each dollar of sales generated.
|Best Value Crypto Mining Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/S Ratio|
|BIT Mining Ltd. (BTCM)||$6.81||$494.5||0.7|
|Canaan Inc. (CAN)||$5.30||$905.0||2.0|
|Bit Digital Inc. (BTBT)||$6.63||$459.9||3.3|
- Bit Mining Ltd.: BIT Mining is a Hong Kong-based cryptocurrency mining company. Its business operations span cryptocurrency mining, data center, and mining pool. The company also owns the blockchain browser BTC.com. Bit Mining announced in mid-November financial results for Q3 of its 2021 fiscal year (FY), the three-month period ended Sept. 30, 2021. The company's net loss widened to $41.7 million from a net loss of $6.3 million in the year-ago quarter.
- Canaan Inc.: Canaan is a China-based provider of high-performance computing solutions. The company is focused on application-specific integrated circuit (ASIC) high-performance computing chip design, chip research and development, computing equipment production, and software services.
- Bit Digital Inc.: Bit Digital is a bitcoin mining company. The company's mining facilities and mining platform are used to generate and accumulate bitcoins, which are then sold for fiat currency at certain times depending on market conditions.
These are the crypto mining stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means, and find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability. The stocks of companies whose revenue growth exceeded 2,500% were excluded from consideration as outliers.
|Fastest Growing Crypto Mining Stocks|
|Price||Market Cap ($M)||Revenue Growth (%)|
|Hut 8 Mining Corp. (HUT)||$7.80||$1,301||825.6|
|Canaan Inc. (CAN)||$5.30||$905.0||764.0|
|Bitfarms Ltd. (BITF)||$4.73||$885.6||556.3|
- Hut 8 Mining Corp.: Hut 8 Mining is a Canada-based bitcoin mining company. The company uses specialized equipment in order to solve computational problems to validate transactions on the bitcoin blockchain. The company recently announced its production update for November 2021. Hut 8 Mining said that it mined 265 bitcoin during the month for an average production rate of approximately 8.8 bitcoin per day.
- Canaan Inc.: See above for company description.
- Bitfarms Ltd.: Bitfarms is a Canada-based cryptocurrency mining company. In addition to mining operations, it offers onsite technical repair, data analytics, and electrical engineering and installation services. The company recently announced the appointment of Geoff Morphy as chief operating officer (COO) in addition to his current position as company president. Morphy has been Bitfarms' president since 2020.
Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market has as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock's outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the crypto mining stocks that had the highest total return over the past 12 months.
|Crypto Mining Stocks with the Most Momentum|
|Price||Market Cap ($M)||12-Month Trailing Total Return (%)|
|Bitfarms Ltd. (BITF)||$4.73||$885.6||323.8|
|Hut 8 Mining Corp. (HUT)||$7.80||$1,301||295.7|
|Marathon Digital Holdings Inc. (MARA)||$33.86||$3,475||257.5|
- Bitfarms Ltd.: See above for company description.
- Hut 8 Mining Corp.: See above for company description.
- Marathon Digital Holdings Inc.: Marathon Digital Holdings is a digital asset technology company engaged in the mining of cryptocurrencies. Its primary focus is on the blockchain and the generation of digital assets. The company announced in November financial results for Q3 FY 2021, ended Sept. 30, 2021. Marathon's net loss widened to $22.2 million from $2.0 million in the year-ago quarter. Revenue expanded nearly 62 times compared to the year-ago quarter. The company's operating expenses increased nearly 41 times.
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
YCharts. "YCharts Financial Data." Accessed Dec. 20, 2021.
Hut 8 Mining Corp. "Hut 8 Mining Provides Production Update for November 2021." Accessed Dec. 20, 2021.
Bitfarms Ltd. "Bitfarms Appoints Chief Operating Officer and Announces
Grants of Options," Page 1. Accessed Dec. 20, 2021.
Marathon Holdings Inc. "MARATHON DIGITAL HOLDINGS REPORTS THIRD QUARTER 2021 RESULTS." Accessed Dec. 20, 2021.