Bitcoin miners, MicroStrategy stock rally as BTC price hits $50.3K

Bitcoin’s ( BTC ) rebound to a two-year high at $50,363 on Feb. 12 has positively affected crypto and mining stocks. MicroStrategy (MSTR) and crypto-mining stocks recorded double-digit gains over the last week, somewhat mirroring BTC’s 17.5% gains over the same period. 

MicroStrategy’s Bet on BTC pays off

MSTR shares rose by 11% over the last 24 hours to $719 and have gained 33% over the last seven days.

The software company and its founder and chairman, Michael Saylor, are renowned for their support of Bitcoin as a digital gold and store of value and the company’s massive BTC holdings. The company now holds 190,000 BTC worth worth $8.1 billion in its treasury as a hedge against inflation.

The firm bought an additional 850 BTC for $37.2 million in January, according to Michael Saylor’s Feb. 7 post on social media platform X.

In January, @MicroStrategy acquired an additional 850 BTC for $37.2 million and now holds 190,000 BTC. Please join us at 5pm ET as we discuss our Q4 2023 financial results and answer questions about our #bitcoin strategy and business outlook. $MSTR https://t.co/j5SbcELsue

— Michael Saylor⚡️ (@saylor) February 6, 2024

MicroStrategy became the first publicly listed firm to add Bitcoin to its balance sheet in December 2020. Since then, its share price has grown by more than 300%, This growth has been observed moving in tandem with the flagship cryptocurrency, suggesting a strong correlation between MSTR and BTC.

MSTR correlation with Bitcoin. Source: TradingView

The chart above shows that the MSTR price reached an intraday high of $712 on Feb. 12, the same day as the high in Bitcoin at $50,363. The correlation coefficient between MSTR and BTC now stands at 0.94, suggesting a strong relationship between the price movements of the two assets.

Bitcoin mining stocks follow BTC price growth

Bitcoin mining stocks have also followed BTC’s recent bullish price action. Riot Platforms (RIOT) — one of the largest Bitcoin mining firms by market capitalization — registered 55% gains over the past week.

RIOT/USD daily chart. Source: TradingView

Since hitting a low of $9.64 on Jan. 19, the RIOT price has soared 70% and reached an intra-day high of $16.35 on Feb. 12.

One of the largest Bitcoin miners, Marathon Digital Holdings, has also posted 60% gains in the past seven days.

MARA/USD daily chart. Source: TradingView

Hive Blockchain Technologies (HIVE) saw its stock price rise by 28% in the same period, while the MVIS Global Digital Assets Mining Index is up by 108% so far in 2024.

The growth in Bitcoin’s price increased the profitability of miners even as conditions became more challenging ahead of the halving.

The rise in Bitcoin mining difficulty is a sign of the maturity and robustness of the Bitcoin network. It attests to the network’s capability to attract mining infrastructure investments with miners seeking to remain profitable with the expected decrease in block rewards.

Data from Coinwarz shows Bitcoin’s mining difficulty level reached an all-time high of 75.50 trillion hashes on Feb. 12.

Bitcoin mining difficulty chart. Source: Coinwarz.

However, the Luxor Hashprice Index, which quantifies how much a miner makes from the power used on the Bitcoin blockchain, has increased by 16% this week. This reflects increased rewards due to the growth in the price of Bitcoin.

Hashprice index. Source: Hashrateindex.com

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.