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Why Bitcoin Mining Stocks Soared Today

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What happened

Slipstreaming behind gains on major cryptocurrencies such as Bitcoin (CRYPTO:BTC), cryptocurrency mining companies had a fine Monday. HIVE Blockchain Technologies (NASDAQ:HIVE) and Hut 8 Mining (NASDAQ:HUT) both closed the day nearly 10% higher, while Bit Digital (NASDAQ:BTBT) posted an almost 6% gain.

So what

This latest of many cryptocurrency surges actually began over the weekend, led as always by a rising Bitcoin. This followed news of the House of Representatives’ passage of a monster infrastructure bill that addresses cryptocurrency-related issues such as broker registration and transaction reporting.

A woman looking at a set of indexes and graphs.

Image source: Getty Images.

Typically, holders of an asset react negatively when more potential regulation comes down the pipe for their associated investments. In this case, though, it seems as if the government’s likely growing involvement in the crypto sphere is good for this rapidly growing industry overall. Investors find comfort in a well-regulated environment, with the increased confidence boosting demand for the affected asset or assets.

And with this particular rise in demand, more cryptocurrency is going to be wanted by the world. Cryptocurrency miners like HIVE Blockchain, Hut 8, and Bit Digital specialize in extracting coin from the digital earth, hence the coattail attraction of investors on Monday.  

Now what

As long as cryptocurrencies, particularly Bitcoin, remain frothy, related cryptocurrency stocks like HIVE Blockchain, Hut 8, and Bit Digital should keep doing well. Owning shares of these miners is basically like investing in cryptocurrencies themselves, without the burden of having to maintain and monitor a secure crypto wallet.

I should note that all three companies mine Bitcoin, while HIVE Blockchain and Hut 8 also have considerable operations in the comparably popular Ethereum.

Believers in the future of the crypto economy, then, should continue to be bullish on this trio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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