With the first U.S. spot Bitcoin ETF seemingly in sight, it has seemed like the entire crypto industry is optimistic about how such a product could bolster Bitcoin’s legitimacy in the investing world, ignite institutional adoption, and send the price of BTC to the moon. For the most part, that includes Bitcoin mining firms—companies that run large computer fleets dedicated to securing the Bitcoin network and earning newly minted coins. However, a key fact about the current Bitcoin investing landscape may leave investors in mining firms a bit concerned.
Though Bitcoin itself is up over 100% this year, public mining stocks have averaged even stronger returns – alongside other BTC-adjacent firms. Until now, such companies have acted as regulated, more traditional leverage plays on BTC for investors in the absence of an ETF. Yet therein lies the rub: Though Bitcoin ETFs may appear promising, they may also suck capital away from stocks that investors have until now treated as the next best thing.
For their part, CleanSpark remains optimistic, keeping its focus on Bitcoin’s price. “Recent developments—both the false claim of an ETF and the hinting of one with the CUSIP listing—both spurred an increase in the price of bitcoin,” highlighted Holoyak. Anticipating higher future prices, Cleanspark has been dumping millions of dollars into mining equipment this year to give it the greatest competitive edge.
A spot Bitcoin ETF differs from existing Bitcoin investment products in the United States, in that its shares would be directly redeemable for a fixed amount of BTC held by the provider and its partners. While some might prefer to purchase and personally hold BTC outright, many retail investors may be less comfortable with buying coins from crypto-specific platforms, which are often unregulated. Furthermore, as Iris’s Roberts elaborated, physical Bitcoin investment is outright impossible for many larger firms.
When asked about this dynamic, Bitcoin mining firm and pool operator Foundry Digital acknowledged how an ETF could produce “counterintuitive negative consequences” for the industry.
This news is a cause for optimism for the entire crypto industry. Bitcoin ETF’s could bolster Bitcoin’s legitimacy in the investing world, ignite institutional adoption, and send the price of BTC to the moon. This could be good news for mining firms as well, as a rising BTC price translates to higher USD-denominated revenue for the entire industry. However, it could also suck capital away from stocks that investors have until now treated as the next best thing. #BitcoinETF #CryptoIndustry #BTCPrice #MiningStocks #BTCInvesting
You can read more about this topic here: Decrypt: Why a Bitcoin ETF Is Making BTC Miners Nervous