6

Companies exposed to crypto, whether through the acquisition of digital assets or relying on the crypto ecosystem for business, have reaped significant benefits.

Coinbase

(ticker: COIN) is up 83% since the beginning of January

MicroStrategy

got 124%.

Bitcoin miners are getting better. Among some of the top names in crypto in 2022, they are among the biggest winners of 2023.

The disturbance P

latforms (RIOT) has gained 270% now in 2023, while

Digital Marathon

(MARA) is 224%.

It makes sense because miners are at the heart of a process called “proof of work,” which runs the Bitcoin network. They use computers running on powerful chips—often store-bought computers—to solve complex problems in a process that facilitates network management and job transfer. . Payments are in Bitcoin.

How difficult the puzzles are, in terms of how much energy is needed to solve them, is largely determined by the number of miners involved in the process.

Higher energy prices, increased competition, and months of low Bitcoin prices—the largest digital asset that has lost two-thirds of its value in the past year—will put pressure on stocks. balance of miners in 2022. Share on Riot Platforms a

Digital Marathon

sprinkled.

Argo Blockchain

(ARBK) was reorganized in an order to avoid bankruptcy. Its shares are up 35% in 2023. Others are not so lucky:

Critical Sciences
,

among the largest miners, which filed for Chapter 11 bankruptcy protection late last year.

Although the problems remain – and the competition continues to be high – the price of energy relaxation and the increase in Bitcoin prices have made the whole industry better, which explains the great danger which appears in crypto mining databases.

Argo

was upgraded to Buy from Hold last Friday by analysts at Compass Point, who also raised their price targets on Riot Platforms and Marathon Digital.

Since crypto miners rely on computer chips—typically research-specific integrated circuits, or ASICs—chip makers can be another way to play the game. . However, some of the biggest names in chips seem to be far from mining even though the shine came from crypto last year.

Intel

(INTC) this week announced that it is ending production of its Bitcoin mining chip set, the Blockscale ASIC, just one year after its release. The company, in a product cancellation notice on its website, has indicated that it will stop taking orders in October before releasing the ships next April.

Intel did not immediately respond to a request for comment.

Nvidia

(NVDA), is also looking to retreat. Although its ASICs are widely used to mine Ether, the second largest crypto, in the same way as Bitcoin mining, an extension last year to the Ethereum blockchain network played a major role in that process . Even before the “Merge” extension,

Nvidia

he did it in order to reduce his chips to the miners in order to support his big customers in intelligence and gaming.

In an interview with The Guardian published last month, Nvidia’s chief technology officer said that “crypto does not bring anything useful for society.”

The manufacturers of two popular ASIC chips used in Bitcoin mining, Bitmain and MicroBT, are both privately owned and based in China. Third, the type of chip produced by

Canaan

(CAN), which is based in China and is listed on the Nasdaq through American stock exchanges.

It has 32% shares in Canada, which has a market value of less than $ 500 million, this year. Investors are better off buying Bitcoin mining stocks.

Write to Jack Denton at jack.denton@barrons.com