The prospect of a US spot Bitcoin Exchange-Traded Fund (ETF) has sent ripples of optimism throughout the cryptocurrency industry.
It is seen as a means to enhance Bitcoin’s credibility in the investment sphere, spark institutional interest, and potentially drive Bitcoin’s price to new heights.
However, this enthusiasm is not limited to the broader crypto community.
Even Bitcoin mining firms, which operate substantial computer networks to secure the Bitcoin network and generate new coins, are looking forward to the potential benefits. Isaac Holyoak, Chief Communications Officer of CleanSpark, voiced his optimism, saying that “we are optimistic about the ETFs, and there are indications it will be positive.”
He also noted that mining stocks tend to align with Bitcoin’s upward momentum during bullish market phases.
While Bitcoin’s price has surged by over 100% this year, publicly traded mining stocks have outperformed it, providing investors with a regulated, more traditional means to leverage Bitcoin without the existence of an ETF.
Nonetheless, a significant concern lingers: the emergence of Bitcoin ETFs may divert capital from stocks that have, until now, been considered the next best alternative for investors.
CleanSpark, however, remains sanguine and keeps its focus on Bitcoin’s price. Holoyak emphasized that recent developments, including the false claim of an ETF and hints of one with the CUSIP listing, contributed to an increase in the price of Bitcoin.
For mining firms, a substantial portion of their revenue is derived from fixed Bitcoin block rewards.
Consequently, a rising Bitcoin price translates to higher revenue in USD for the entire industry. CleanSpark has been making substantial investments in mining equipment this year, anticipating higher future prices and aiming to secure a competitive edge.
In an industry report for October shared with Decrypt, J.P. Morgan equity analyst Reginald L. Smith designated CleanSpark as an overweight stock.
This was due to their acquisitions of hardware and facilities at discounted rates and their operation of an efficient fleet.
CleanSpark’s stock has surged by 103% year-to-date.
Another company that made significant infrastructure investments this year is Iris Energy, a renewable-focused miner with a strong belief in the forthcoming Bitcoin halving.
Smith also labeled Iris Energy as “overweight,” as their shares have risen by 161% this year.
Regarding the ETF, Daniel Robert, co-founder and co-CEO of Iris Energy, pointed out that SEC approval could introduce substantial capital into the Bitcoin market, compounding the bullish effects from the halving and macroeconomic conditions.
A spot Bitcoin ETF stands apart from existing Bitcoin investment products in the United States.
Its shares would be directly redeemable for a fixed amount of Bitcoin held by the provider and its partners, offering a preferable option for professional investors and retail retirement accounts, according to HIVE Digital CEO Aydin Kilic.