As 2021 goes into the record book, the term cryptocurrency has continued to burst out of the shadows and seep into mainstream vocabulary. Even the securities and exchange commission (SEC) has approved its first cryptocurrency centric Exchange Traded Fund (ETF).

Unlike fiat currency, which is minted by the government that owns it, cryptocurrency (known as coins) are mined by crypto mining firms, by solving complex computational problems. Cryptocurrencies then utilize blockchain technology to ensure secure and decentralized record of transactions, without the need for a trusted third party (like a bank). 

Matthew Johnston, recently reported on Investopedia, that:

Crypto mining stocks, as represented by the Amplify Transformation Data Sharing ETF (BLOK), have outperformed the broader market. BLOK has provided a total return of 39.3% over the past 12 months, above the Russell 1000's total return of 23.6%. 

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A quick refresher...

As a refresher, Value stocks represent an asset class where the value is usually higher than the market. Growth stocks, carry higher risk and hence are expected to outpace the market. Momentum stock are assumed to have an event that continues to give them an advantage, leading to outperforming the market.  

How this is applied to crypto mining...

Similar to Value, Growth and Momentum driven stocks, Johnston suggested that BTCM, HUT, and BITF were top for value, growth, and momentum, crypto mining stocks respectively. Johnston research has shown that:

  • BTCM, has a 12-Month Trailing Price/Sales ratio of 0.7. This implies, the stock is currently undervalued and a good candidate for Value buy.
  • HUT has seen a 825.6% Year-over-Year (YoY) growth, and such has been tagged as a growth stock.
  • BITF has had 323.8% return in its trailing 12 months, and therefore classified as a momentum stock.

This is for informational purposes only and should not be considered investment advice or recommendations to invest in any security or to adopt any investment strategy. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice.