Share prices follow the underlying assets.
Cryptocurrency mining companies fared poorly on Monday, trailing gains in major cryptocurrencies such as Bitcoin (CRYPTO:BTC). HIVE Blockchain Technologies (NASDAQ:HIVE) and Hut 8 Mining (NASDAQ:HUT) both ended the day nearly 10% higher, while Bit Digital (NASDAQ:BTBT) gained nearly 6%.
So, what is it?
This latest in a series of cryptocurrency surges began over the weekend, led as usual by a rising Bitcoin. This came after the House of Representatives passed a massive infrastructure bill that addresses cryptocurrency-related issues like broker registration and transaction reporting.
Holders of an asset typically react negatively when more potential regulation for their associated investments is introduced. In this case, however, it appears that the government's likely increased involvement in the cryptosphere is beneficial to this rapidly growing industry as a whole. Investors are at ease in a well-regulated environment, and the increased confidence boosts demand for the affected asset or assets.
With this particular increase in demand, more cryptocurrency will be desired by the world. Cryptocurrency miners such as HIVE Blockchain, Hut 8, and Bit Digital specialize in extracting coin from the digital earth, which explains why investors were drawn in on Monday.
So, what now?
As long as cryptocurrencies, particularly Bitcoin, remain frothy, cryptocurrency stocks such as HIVE Blockchain, Hut 8, and Bit Digital should do well. Owning shares in these miners is essentially the same as investing in cryptocurrencies, but without the added burden of having to maintain and monitor a secure crypto wallet.
It's worth noting that all three companies mine Bitcoin, with HIVE Blockchain and Hut 8 also having significant operations in the more popular Ethereum.
Those who believe in the future of the crypto economy should remain bullish on this trio.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a USA GAG premium advisory service.