As long as Bitcoin doesn't take off and leaves the miners stocks in the dust there is still hope.
Since our last report Bitcoin has been flat. So the miners trade can still go either way.
But we are seeing some encouraging signs.
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Can the Bitcoin miners close the gap?
The Bitcoin miners thesis is simple.
The profitability of the Bitcoin mining companies strongly depends on Bitcoin's price. That make the Bitcoin miners stocks closely tied to BTC and thus good proxies for getting exposure to the Bitcoin market.
At the same time those miners stocks are small. Much smaller than Bitcoin. So capital inflows in the miners market tend to create outsized returns.
The investment thesis is that in the coming bull market, the institutional money will want to own Bitcoin miners stocks in order to get exposure to BTC. The buying pressure coming from that demand will make it so that the Bitcoin miners stocks will deliver returns that are several times larger than Bitcoin itself over the same period.
This is the bet we are tracking in our monthly miners report.
The takeaway
Everyone is waiting to see what Bitcoin will do next. That includes the miners.
In the meantime there are early signs that the miners stock are catching up to Bitcoin. The performance gap is closed or closing for about half of the miners. And a few of them are even performing very well.
On average over the last 30 days the miners stocks have been growing faster than Bitcoin.
Is it just noise or are the miners reverting to the mean now that the halving is behind them? Again we’ll only know for sure if Bitcoin starts a new uptrend.
But if you are consider entering this trade chances are the window of opportunity will be closing in the next 6 months.
Closing the gap
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