Why Cryptocurrency Mining Stocks Jumped Over 12% on Monday

Cryptocurrency mining stocks continued to climb on Monday, as Bitcoin climbed towards $60,000 per token.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published March 28, 2022 4:30 pm EDT

Cryptocurrency mining stocks climbed 12% on Monday, with Hut 8 Mining (TSX: HUT)(NASDAQ: HUT) and Galaxy Digital Holdings (TSX: GLXY) up by 14% and 12%, respectively.

cryptocurrency, crypto, blockchain — Image source: Getty Images

What happened?

Cryptocurrency companies involved with the process of mining continue to be up on Monday. This is especially true, however, for companies focused on Bitcoin. The top dog of cryptocurrency continued climbing this week and is just shy of the $60,000 mark at the time of writing.

For companies focused on mining Bitcoin, this was great news. Cryptocurrency mining stocks saw a surge in prices over the last week, and it doesn’t look to be slowing down — especially as Bitcoin isn’t just mined but held by many of these miners to improve profitability.

So what?

The biggest note that investors should watch is that most cryptocurrency mining stocks still look valuable. This remains the case for both Galaxy Digital stock and Hut 8 stock. Galaxy stock trades at $26 as of writing, up 31% in the last week. Meanwhile, Hut 8 stock rose 14% in the last week as well.

But the key numbers investors should look at are price to earnings. In this case, Galaxy stock trades at a valuable 5.84 times earnings and at a forward P/E of 7.7. Both remain strong and profitable and are likely to continue being so as hash rates improve. But if there was one to invest in over the other, many analysts lean towards Galaxy stock.

Now what?

The reason for this comes from diversifying. Galaxy stock isn’t just a miner, but it also involves itself with start up costs, asset management, and as a trading platform. This is a solid way to get into cryptocurrency and reap the benefits from all avenues.

But that’s not to say you should ignore Hut 8 stock. The company has a heavy investment in Bitcoin, yet it’s also diversified its investment in several other cryptocurrencies. Both stocks now have target prices by analysts that are about double where they stand today.

Shares of Galaxy stock were up 8% on Monday, and Hut 8 stock is up 5% as of writing.