Investment in cryptocurrency mining stocks is one method to get a foot in the digital asset door. Keeping a platform’s blockchain network operational requires crypto mining, which validates transactions on the network. For solving complex mathematical equations, cryptocurrency miners are rewarded with a payout in the form of fresh tokens. Below, we look at the crypto mining stocks with the best growth outlook for 2022.
Marathon Digital (NASDAQ: MARA)
As with the stock price of other leading crypto mining companies, the stock price of Marathon Digital (NASDAQ: MARA) typically moves in response to the price of Bitcoin. There was a 600% rise in the amount of Bitcoin mined by Marathon Digital in Q4 of 2021 compared to the same period in 2020. Also, for the entire year of 2021, the company made $150.5 million, a 3,320% increase from the $4.4 million it made in the previous year.
MARA shareholders received 36 cents in adjusted earnings per share (EPS) compared to 35 cents expected by market analysts. Its share price has recently diverged from Bitcoin’s performance and is currently at $28.54 from a January 4th high of $35.42. Its YTD earnings are down by 15.2%, compared to BTC’s modest growth of 0.8% so far in 2022. Its earnings report for the quarter ending December 2021 fell below expectations, recording a growth of 0.22% against a projected 0.35%.
Aiming to become one of the top cryptocurrency miners in North America, the company is now in the process of expanding. The company’s growth plan focuses on boosting the hash rate to increase production and reducing the risk associated with the business by becoming more resistant to Bitcoin price declines. The company’s financial muscle is likely to grow stronger even more if it continues to mine Bitcoin aggressively through 2022.
Riot Blockchain Inc. (NASDAQ: RIOT)
With a focus on Bitcoin, Riot Blockchain is one of the largest listed BTC-powered ecosystems in the United States. Because they run on renewable energy, Riot’s self-mining operations are more affordable to operate. Riot has a market capitalization of $1.8 billion and a share price of roughly $16, making it an excellent option to gain exposure to Bitcoin without actually investing in the cryptocurrency.
In 2021, the company’s revenue grew by 1,665 percent year-over-year, reaching $213.2 million. In 2021, crypto mining generated $184.4 million in revenue, an increase of 1,433% over the $12 million generated in 2020.
Riot’s expected revenue for this year is $441 million, which could make it one of the most profitable crypto mining companies in the world. However, year to date, the stock is down 7.6% at $20.73 per share, which is significantly below the 0.8% gain by BTC so far in 2022.
Notably, however, Riot Blockchain made a substantial loss in 2021, reporting a net loss of $7.9 million for the entire year of 2021. It reported an earnings decline of -0.18% against a projected gain of 0.39% for the quarter ended December 2021. However, it registered significant growth in revenue, generating $93.69 million, against a projected 89.39 million.
Hut 8 Mining (NASDAQ: HUT)
To meet the cryptocurrency mining demands of its partners, Hut 8 Mining (NASDAQ: HUT) has built up a 121 MW power capacity across numerous data mining centers and cutting-edge computing infrastructure. It has been a rough year so far for HUT, with the stock down by 30% YTD. Also, its Q4 earnings for the quarter ended Dec 2021 came in at -0.53%, against a consensus estimate of +.16%. However, it registered marginal growth in revenue, generating $45.777 million against a projected $45.763 million.
For its mining facilities, Hut 8 claims to use wind energy and other green choices, as well as gas-fueled power. Most of the company’s mines are located in cold climates, making them ideal for mining.
Hut 8 has already implemented high-performance NVIDIA chips that are less expensive. Consequently, the company’s cost per Bitcoin is about $3,000 due to the low power intensity of these devices. This has resulted in about 95% unit margin.
Thus, despite the recent decrease in Bitcoin’s value, Hut 8 remains an appealing investment for 2022 EBITDA and cash flows.
Argo Blockchain (NASDAQ:ARBK)
As of this writing, its share price is down by 18.61% YTD at a price of $9.93. Also, it is about 110% below its ATH share price of $21.00 recorded in November 2021. ARBK is scheduled to release its earnings results for the period ending December 2021. Earnings are expected to come at +0.88%, with a revenue projection of $56.72 million.
Its mining infrastructure consists of an active electricity power capacity of 45 MW, and an SHA-256 hash rate of 1.605 EH/s, which is about 0.6% of the world’s total BTC hashing capacity. Additionally, it has an Equihash rate of 280 MS for its ZCash mining needs, which is equivalent to 5% of the global capacity. These investments have put it on a growth trajectory and will enable it to significantly absorb market shocks when crypto prices go down.
Canaan Inc. (NASDAQ: CAN)
When it comes to Bitcoin mining machines, Canaan is well recognized for developing the world’s first dedicated BTC mining device, about nine years ago. Because it is a leading expert in chip design as well as in semiconductor research and development, it also supplies supercomputing and cost-efficient hardware that performs better at crypto mining activities.
In January, the company revealed that it had signed strategic collaboration agreements with Kazakhstani crypto mining companies. These programs are likely to stimulate faster growth in the company.
Also, Canaan stock is likely to reap the benefits of the expected stock repurchase program. Two weeks ago, the company announced that it would buy back its stock worth $100 million over the next 24 months. As of this writing, the stock is at +8% YTD, which is significantly above Bitcoin’s +0.8%. Furthermore, it reported $340.88 Million in revenue and an earnings growth of 0.08% for the quarter ended December 2021.
In summary
Investing in any cryptocurrency-related stock carries a high degree of risk. The benefits might be substantial, but so can the risks. There has been a decline in the value of Bitcoin mining equities in recent times. Although they were one of the winners of 2021, their fall from grace is a concern to many investors, mostly because most of them have declined far much more than Bitcoin itself. We have shared some of the high potential performers above, but always remember that the market is unpredictable and therefore you need to research as broadly as possible.
