Crypto Stocks: A More Profitable Investment Option than Bitcoin?

Crypto Stocks: A More Profitable Investment Option than Bitcoin?

The crypto world, despite Bitcoin's dominance, is increasingly offering more alternatives. In recent years, the attention-grabbing crypto mining stocks have managed to attract investors' interest. Notably, companies like IREN and Cipher Mining stand out due to their lower market value compared to Bitcoin.

Bitcoin's Successes and Limitations

Bitcoin has achieved more than a 25,000% increase in value over the past decade. However, its $2 trillion market cap makes it difficult to achieve more significant profit potential. To see a repetition of the high price movements from the 2017 and 2020-2021 periods, it makes sense to turn to underperforming alternative investment instruments.

Connection between Crypto Mining Stocks and Artificial Intelligence

Crypto miners like IREN, Cipher Mining, Riot Platforms, and Terawulf have started to pivot towards artificial intelligence, making significant agreements with technology companies. This situation increases the potential of crypto mining stocks to outperform Bitcoin. The rising expenditures on artificial intelligence are strengthening these companies' market positions and attracting investor interest.

Differences in Market Performance

As a result, IREN and Cipher Mining have achieved returns of 440% and 259%, respectively, this year. In contrast, Bitcoin's gain has remained at only 10%. This scenario indicates that crypto mining stocks are becoming an increasingly attractive option for investors.

Long-Term Income Expectations

Crypto mining companies continue to create long-term business models by using crypto mines to finance artificial intelligence data centers. This situation, particularly through multi-year and billion-dollar agreements, is increasing investor interest. For example, the CoinShares Bitcoin Mining ETF gained 3% last month despite Bitcoin losing 17% of its value.

Analysts' Views

Growing popularity and earnings are also changing analysts' perspectives on crypto mining stocks. Companies like Compass Point, Roth Capital, and Cantor Fitzgerald have raised their price target estimates for IREN, while JPMorgan has upgraded the ratings of Marathon Digital and Riot Platforms to "High Portfolio Weight."