These Crypto Stocks Are Set to Go Higher

|March 5, 2024

Everyone is looking for ways to profit from crypto…

And that’s good, as I expect crypto to continue its bull run through 2024 (you can see my reasons why here).

I even talked about this bull market with hundreds of attendees at this year’s Investment U Conference last week.

But there are more ways to play it than buying crypto directly – as this reader asks…

Hi – could you review some of the crypto mining stocks? Thanks, appreciate your perspective on BTC over $50K.– Subscriber Brad V.

As subscribers to my Breakout Fortunes research service know, there’s a “leveraged” way to play the crypto market through mining stocks.

And I’ll tell you why they’re such an attractive opportunity today.

Investing in Digital Gold

Think about gold mining stocks…

Many investors use them to get extra “leverage” out of the often-slow moving gold price.

And just as gold miners offer a leveraged play on the price of gold… Bitcoin mining stocks provide similar leverage on the price of Bitcoin.

When Bitcoin’s price climbs, the revenue of mining companies can skyrocket because the value of their primary asset – Bitcoin – increases. This amplifies their earnings potential far beyond the initial rise in Bitcoin’s price.

When gold prices soar, existing gold reserves suddenly become more valuable. The cost to mine new gold becomes a smaller fraction of the gold’s worth.

Similarly, when Bitcoin rises, freshly mined Bitcoins and existing holdings are worth much more. This doesn’t just boost profits… it transforms the financial landscape for miners.

But it’s how these miners set themselves apart that can help you decide which miners to buy and which miners to stay away from.

How Bitcoin Mining Works

Bitcoin mining is the process by which new Bitcoin are created and transactions are added to the blockchain. It involves solving complex mathematical problems through computational power.

Miners compete to solve these problems. The first to reach a solution gets to add a new block of transactions to the blockchain and is rewarded with newly minted Bitcoin and transaction fees.

Miners use specialized hardware, often called ASICs (application-specific integrated circuits), to perform these computations efficiently. The process also involves verifying the validity of transactions and securing the network.

The most successful miners are those with the latest, most efficient ASICs and access to cheap electricity. These factors determine a miner’s ability to stay profitable as they race against increasing difficulty levels and compete for block rewards.

The leanest mining operations can maintain profitability even when Bitcoin prices are lower… but when prices surge, these companies are positioned to see their margins expand exponentially.

An Infrastructure Play

For investors looking to gain exposure to Bitcoin without directly purchasing the cryptocurrency, Bitcoin mining stocks are a good choice. By investing in these companies, you’re essentially betting on the infrastructure behind Bitcoin’s blockchain. As the crypto market matures and institutional interest continues to grow, these mining operations stand to benefit from the increased demand for Bitcoin.

While there are many solid miners to choose from… like Marathon Digital (MARA), CleanSpark (CLSK) and Bit Digital (BTBT)… I’m going to tell you about one to avoid.

Riot Platforms (RIOT).

Even though it’s one of the largest players, the technical outlook for this stock is much weaker than its mining peers.

In fact, in the latest Bitcoin miner pullback, Riot was the only one to cross below its 200-day moving average…

ROIT

Considering it also rallied less than its peers during the bounce we saw in February, the market is telling you Riot is the weakest of the bunch.

The Future Is Bright for Bitcoin

The Bitcoin market is maturing before our eyes. The original crypto was thisclose to hitting $69,000 per coin yesterday, just a kiss away from its all-time high.

We recently recommended a Bitcoin miner in my premium research service, Breakout Fortunes. We’re already up 20% on this position (and we just closed another crypto-related position for a 185% gain in three weeks)… but I could see shares head significantly higher if my thesis for the crypto market plays out as expected.

As we navigate the crypto bull run of 2024, Bitcoin mining stocks present an attractive – although riskier – alternative to buying crypto directly.

Their leveraged nature means they can offer outsized returns when Bitcoin prices are on the rise… but this does come with increased volatility and exposure to the intricacies of mining economics.

For those willing to delve into this dynamic sector, the rewards can be substantial, echoing the lucrative yet unpredictable journey of gold mining stocks in a bull market for gold.

Just remember to do your due diligence and only take on “smart risks” with these high-risk, high-reward assets.


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