Analyst: Bitcoin Mining Stocks Rise 24% Because AI and Economic Situation

Bittime - Shares of Bitcoin mining companies surged by 24.4% on October 28, 2024, driven by the rally Bitcoin price which passed the $70,000 mark. 

Analysts cite increasingly supportive global economic conditions and the diversification of miners into the AI ​​sector as the main factors driving this surge in Bitcoin mining shares. 

Bitcoin Mining Stocks Rise Supported Macroeconomic Factors

Mitchell Askew, chief analyst at Blockware, emphasized that economic instability, including increased global liquidity and inflation concerns, has driven investors towards assets like Bitcoin.

According to Askew, spending deficits and low interest rates are contributing to increased global liquidity, while the poor performance of government bonds indicates long-term inflation concerns. 

After interest rates were lowered in September, investors started looking for alternatives, one of which was the Bitcoin market. And Bitcoin mining is now considered more responsive to market fluctuations.

Read Also: Bitcoin Mining Income Stable, Miner Shares Potential to Rebound

Diversifying into the AI Sector, Bitcoin Mining Stocks Rise

Source: tradingview.com

Apart from relying on Bitcoin mining activities, some mining companies are also expanding their business into the AI and high-performance computing sectors. 

From the image above, it can be seen that some Bitcoin mining companies have seen their shares rise.

This increase in share price shows that these Bitcoin mining companies are benefiting from stable market conditions and high investor interest.

Selling Pressure Decreases, Bitcoin Mining Stocks Rise

According to Askew, miners who experienced losses since the Bitcoin halving last April have withdrawn from the market. Those who are unable to compete end up dropping out of the market, which lowers the pressure to sell Bitcoins so that Bitcoin prices are more stable. 

Askew also added that Bitcoin mining difficulty is predicted to increase for the third time, which indicates that the surviving Bitcoin mining companies are now in better condition.

State Participation in Bitcoin Mining  

Several countries such as Argentina, the United Arab Emirates and Ethiopia are now using state-owned resources to mine Bitcoin. This shows the interest of several countries in exploiting the economic benefits of Bitcoin mining. 

Additionally, VanEck's Mitchell Sigel highlighted that several BRICS member countries plan to use Bitcoin in international trade as a way to avoid dependence on the US dollar.

Read Also: Marathon Digital Marks Every Bitcoin Block “Made in USA”

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