Bitcoin stocks are looking a little muted at the moment. The price of the cryptocurrency has slumped to its lowest level since February. Uncertainty over whether the Fed will keep rates higher for longer has led to a broad selloff across bitcoin stocks.
Miners have been under pressure following the halving event in April, which slashed the reward for adding a block of transactions to the blockchain from 6.25 bitcoin to 3.125 bitcoin. Network fees have also fallen to an average of between $3 and $5, despite peaking briefly at $102 in early June, according to data from Kaiko Research, published on 1 July.
Lower fees and smaller rewards mean mining bitcoin is becoming less and less lucrative. Some miners are being forced to sell their bitcoin holdings, a trend that could persist throughout the second half of the year, Kaiko warns.
In the face of reduced revenue, miners are also looking to mergers “to consolidate assets and increase efficiency”. Kaiko highlights the example of bitcoin stocks Riot Platforms [RIOT] and CleanSpark [CLSK]. Riot attempted a hostile takeover of Bitfarms [BITF] last month, while CleanSpark is to acquire Griid Infrastructure [GRDI].
Other miners are exploring how they can boost their income through artificial intelligence (AI) and high-performance computing (HPC).
Here are five crypto stocks to keep an eye on: download the OPTO app today for more details on their performance, as well as a list of stocks in the broader crypto universe.
5 Top Bitcoin Stocks to Watch in July
| Ticker | Company Name | Market Cap | YTD Performance (as of 5 July) | P/S Ratio |
|---|---|---|---|---|
| APLD | Applied Digital | $951.43m | 3% | 5.15 |
| CORZ | Core Scientific | $1.83bn | 85.4% | 6.54 |
| HUT | Hut 8 | $1.49bn | 23.6% | 19.76 |
| IREN | Iris Energy | $2.81bn | 110.2% | 6.94 |
| WULF | TeraWulf | $1.86bn | 132.5% | 13.45 |
Applied Digital [APLD]
Applied Digital will be one of the first cloud providers to host Nvidia’s [NVDA] Blackwell hardware.
Why invest in Applied Digital?
The HPC hosting provider has secured a $200m debt facility to build out its HPC data centre campus in Ellendale, North Dakota; the company has also signed a contract to lease 400MW to an unnamed US-based hyperscaler at the site. Future HPC services hosted by Applied Digital will be powered by Nvidia’s latest GPU hardware, Blackwell, which is due to begin shipping this year. Blackwell will help Applied Digital to “breathe life into generative AI” as well as advance its data centre infrastructure, CEO and Chairman Wes Cummins said in a press release.
Core Scientific [CORZ]
Core Scientific is becoming a major player in the HPC space — and an acquisition target.
Why invest in Core Scientific?
After exiting Chapter 11 bankruptcy in January, the miner is now in a healthy position. Last month, Core Scientific inked a 200MW deal to host cloud provider CoreWeave’s HPC services over the next 12 years. On the day prior, Core Scientific announced it had rejected an unsolicited buyout offer from CoreWeave for all of its outstanding shares because it significantly undervalued the business. In total, Core Scientific secured contracts of 270MW in June, which it expects to generate $4.7bn over 12 years, while it’s engaged in conversations over a further 230MW that’s being made available for HPC hosting.
Hut 8 [HUT]
Hut 8’s HPC solutions are in demand thanks to AI.
Why invest in Hut 8?
The Miami-based miner has secured $150m to boost its AI ambitions and infrastructure. Investment firm Coatue Management is providing the funding, which closed on 1 July, through a convertible note with an 8% interest rate. Coatue has previously backed CoreWeave, and believes Hut 8 can become a leader in AI infrastructure at a time when some traditional data centre operators are struggling to meet demand for computing capacity for AI applications. Hut 8 mined 107 bitcoin in June, up 16.5% from May, and had a hash rate of 17.8EH/s.
Iris Energy [IREN]
Iris Energy is providing cloud access to Nvidia GPUs to train large language models.
Why invest in Iris Energy?
The Australia-headquartered company has big plans for the rest of 2024, including scaling up its hash rate to 30EH/s, from 10EH/s as of the end of June, and growing its data centre operations from a current capacity of 260MW to 510MW. The expansion is fully funded, with $425.3m in cash reserves and, more importantly, no debt, according to a press release issued last week. Iris Energy currently has a deal to give AI start-up Poolside access to 504 Nvidia H100 GPUs, up from a previous agreement of 248 GPUs.
TeraWulf [WULF]
TeraWulf is expanding into HPC and looking for opportunities beyond bitcoin mining.
Why invest in TeraWulf?
The Maryland-based miner’s capacity reached 8.8EH/s in June, up 76% year-over-year, according to the latest operations update. TeraWulf reported 177 bitcoin were mined last month at an average daily rate of 5.9 bitcoin. The company has also been running an HPC pilot for an AI client at its Lake Mariner facility in New York. Though bitcoin mining will remain the priority, TeraWulf has said that it is “not opposed to evaluating other projects and opportunities to use the capacity that we have”.
Download the OPTO app today to invest in Applied Digital, Core Scientific, Hut 8, Iris Energy and TeraWulf.
How to Invest in Bitcoin Stocks
Investing in bitcoin stocks can be rewarding, especially during a bull run, but can be equally as risky. The fixed supply means the price is prone to wild swings as demand fluctuates.
There are several alternative strategies to holding shares in individual bitcoin stocks.
In January, the SEC approved the sale of ETFs linked to the spot price of bitcoin. Spot ETFs hold physical bitcoin and offer direct exposure to the cryptocurrency’s price movements. Examples include the iShares Bitcoin Trust [IBIT].
Other vehicles, such as the ProShares Bitcoin Strategy ETF [BITO], offer exposure to bitcoin futures contracts. Another option is funds that focus specifically on miners and the mining ecosystem, like the Valkyrie Bitcoin Miners ETF [WGMI]. As of 5 July, the fund holds Applied Digital, Core Scientific, Hut 8, Iris Energy and TeraWulf.
There are also funds that offer exposure to both bitcoin futures and stocks. The Cyber Hornet S&P 500 and Bitcoin 75/25 Strategy ETF [ZZZ] launched at the end of 2023.
Download the OPTO app to explore more bitcoin stocks and ETFs to invest in.
Conclusion
There’s no saying where the bitcoin price will go in the near term. The bulls would argue that it could retake its all-time high of $75,830, from its closing price of $55,849 on 7 July. Meanwhile, bears would argue that the selloff could continue until the Fed starts cutting rates.
Either way, the bitcoin companies that are diversifying their revenue beyond network fees should be well-placed to offset any impact in the medium and long term.
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