The underperformance of listed digital asset companies has raised eyebrows among investors, but it could also present a golden opportunity for those interested in the bitcoin (BTC) mining space. According to a report by crypto services provider Matrixport, there are compelling investment opportunities to be found in this sector.
The report highlights that if bitcoin were to reach a new all-time high of $70,000, investors would only realize a return of 167%. However, by purchasing a diversified portfolio of publicly listed bitcoin mining companies, such as HIVE Digital, Bitfarms, and Iris Energy, investors could potentially see even larger gains.
The stocks of these companies are currently trading at a discount of around 33% based on bitcoin’s current price. The report suggests that purchasing these stocks could offer investors a 52% upside. In fact, Matrixport’s regression analysis indicates that these stocks could be valued 97% higher if bitcoin returns to $30,000, or an impressive 572% higher if bitcoin reaches a new all-time high at $70,000.
Markus Thielen, head of research at Matrixport, emphasized the importance of diversification in investments. He suggests that investing in a selection of discounted bitcoin mining stocks or tokens with substantial growth potential could potentially represent the ultimate bet for 2024. It is worth noting, however, that tokens carry considerably more risk than listed stocks.
Despite recent indications that the U.S. Securities and Exchange Commission (SEC) may delay the approval of a U.S. listed spot BTC exchange-traded fund (ETF) until January 2024, Matrixport maintains a positive outlook for bitcoin. The delay in the ETF approval is not deterring the company’s belief in the long-term potential of the cryptocurrency.
In conclusion, the underperformance of listed digital asset companies has opened up promising investment opportunities in the bitcoin mining space. By investing in a diversified portfolio of publicly listed bitcoin mining companies, investors could potentially see larger gains than if they were to solely invest in bitcoin itself. Matrixport’s report provides a compelling case for considering these stocks, highlighting their discounted prices and potential for significant upside. However, investors should also be mindful of the risks associated with tokens and conduct thorough research before making any investment decisions.