Bitcoin’s hashrate, which measures total computing power on proof-of-work networks, is soaring to record highs, providing support to shares of cryptocurrency mining equities along the way.
For confirmation of that trend, investors need look no further than the Invesco Alerian Galaxy Crypto Economy ETF (SATO). The fund, which is home to a slew of bitcoin miners, is up nearly 55% over just the past month, fortifying a stellar year-to-date gain of 232%.
Hashrate, which is integral in determining the efficiency of bitcoin miners, including those residing in SATO, surged to 562 EH/s on Monday — a level surpassed just once last month. The hashrate’s seven-day moving average has been steadily climbing, stoking upside for SATO in the process. For the week ending December 19, the Invesco ETF jumped 17.47%.
SATO Super as Hashrate Soars
Of note for investors considering SATO, the soaring hashrate could imply that bitcoin miners are generating more profits.
“This upturn coincides with miners intensifying their operations, a trend observed as the much-anticipated halving event approaches. CryptoSlate’s research indicates that the Bitcoin fee per block during this cycle is notably higher than in any previous cycle, pointing towards potentially lucrative times for the mining community,” reported James Van Stratten for CryptoSlate.
Generating more profits and firming balance sheets today could be pivotal for some SATO member firms because another bitcoin halving is slated for April 2024. Halvings typically make the bitcoin mining process more complex, but some SATO holdings are preparing for what could be a new era of mining the digital currency.
For example, Marathon Digital Holdings, Inc. (MARA), which accounts for 4.55% of the ETF’s roster, announced Tuesday that it’s acquiring two operational bitcoin mining sites from Generate Capital.
“With the acquisition of these sites, Marathon will take ownership of approximately 390 megawatts of operational capacity, 82 megawatts (21%) of which are currently vacant and available for immediate expansion, 244 megawatts (63%) of which are currently occupied by other Bitcoin mining tenants, and 64 megawatts (16%) of which are already occupied by Marathon and ripe for operational optimizations through energy hedging and other means,” according to a statement issued by the buyer.
Deal-making and the elevated hashrate, according to some crypto mining experts, could signal that the industry is entering a new era of profitability and that miners, including SATO holdings, view the current bitcoin bull market as one that’s still in its early innings.
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