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One of the big movers today, as well as over the past week, is Cipher Mining (CIFR 0.36%), which has shown up on the radar of many investors. This relatively small-cap player in the world of Bitcoin mining has surged 23.9% at 1 p.m. ET today since last Friday’s close.
The ultimate catalyst for this increase appears to be an update from two weeks ago that investors are still pricing in. The company is building out a fourth data center and has seen an 84% increase in its Bitcoin mining capacity in December. This amounts to a maximum capacity of roughly 6.6 bitcoin per day at its current state.
And institutional interest in Cipher Mining from VanEck Associates is also helping boost this stock. According to recent reports covering 13F filings, other institutional buyers have also shown interest in Cipher, suggesting this company could be one to watch in this sector.
It’s important to keep this weekly move in context. Shares of Cipher are still down roughly 50% over the past year, with lower Bitcoin prices and a diminished outlook for margins and profitability.
Cipher is far from the only crypto miner to see declines, with most of its peers also experiencing considerable dropoffs. That said, the company’s operating outlook and institutional demand could indicate that this is a stock with some medium- to long-term upside potential worth considering.
For investors in the cryptocurrency mining sector, these sorts of catalysts could move the stock up on their watch lists.
As a way to gain measured exposure to the crypto sector with liquidity, crypto miners are often one of the first places conventional investors look. That’s because these public companies are much easier to trade and provide real cash flows, allowing investors to value the businesses from a fundamental standpoint.
For Cipher and its Bitcoin mining peers, the key input that determines much of the value of these companies is the value of Bitcoin. With the token’s prices showing stability of late, there’s a much clearer line of sight to this year’s earnings than there was near the end of 2022. So Cipher Mining might be a company to watch for investors looking at compelling under-the-radar options in the crypto sector.
Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
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