The MVIS Global Digital Assets Mining Index, which includes data on the top 20 Bitcoin miners including Riot Blockchain, Galaxy Digital, Bitfarms and Iris Energy, has grown by 64% since the beginning of January 2023. This month, the indicator showed the largest increase since its inception in December 2021, according to Bloomberg. At the same time, Bitfarms securities have risen in price by more than 140%, Marathon Digital Holdings shares have risen by more than 120%, and HIVE Blockchain Technologies securities have more than doubled.
The growth in miners’ share prices is the result of a recovery in the Bitcoin hash rate. Since the beginning of January, the first cryptocurrency has risen in price by 26.5% from USD 16,600 to USD 21,000. On 16 January, the Bitcoin price hit a new four-month maximum, exceeding the USD 21,400 mark.
Miner earnings have also increased on the back of crypto market growth, despite the fact that the difficulty of Bitcoin mining has risen to record levels and more miners are connecting to the network, increasing the hash rate. The Luxor Hashprice index, which shows how much a Bitcoin miner can expect to earn with a given hash rate, is up 21% this year.
Industry participants, however, note that it is not known how long the growth in mining company asset prices will last. Cryptocurrency mining companies faced financial difficulties in 2022 and were forced to sell their mined cryptocurrency, return equipment, and cut costs and staff.
In September, major hosting provider Compute North filed for bankruptcy and began financial restructuring. Core Scientific, the largest Bitcoin miner by computing power, filed for bankruptcy in December. Argo Blockchain managed to avoid bankruptcy late last year as the company agreed to sell its Helios mining facility to Galaxy Digital.