Bitcoin Mining Stocks Set for Potential Respite Post Spot ETF Approval, JPMorgan Predicts

JPMorgan analysts suggest that Bitcoin miners could see a pause in their recent surge following the SEC's approval of U.S.-listed spot Bitcoin ETFs.

Bitcoin Miners' Market Cap Soars: 131% Growth Since September

The total market capitalization of miners covered by the bank has surged by 131% since the end of September, reaching nearly $17 billion.

SEC Greenlights First U.S.-Listed Spot Bitcoin ETFs

The U.S. Securities and Exchange Commission (SEC) has officially approved the first-ever spot Bitcoin exchange-traded funds (ETFs). JPMorgan notes the widely anticipated move, evident in recent buying pressure on Bitcoin and associated mining stocks.

Uncertain Impact on Bitcoin and Mining Stocks

Analysts Reginald Smith and Charles Pearce express uncertainty about whether the ETF approval will lead to further near-term gains or prompt investors to sell. They anticipate a potential breather for mining stocks, but expect their performance to closely follow Bitcoin prices in the coming weeks.

Mining Stocks Surge: A 131% Increase in Three Months

Smith and Pearce highlight the remarkable surge in Bitcoin mining stocks over the last three months. As of yesterday, the total market cap of the fourteen U.S. listed miners covered by JPMorgan was almost $17 billion, reflecting a 131% increase since the end of September.

Potential Selling Pressure and Sector Rotation Warning

The analysts warn of potential selling pressure in the mining sector if investors decide to shift away from crypto-related stocks in favor of direct exposure to Bitcoin through the newly approved ETF.

Buying Opportunity Despite Potential Sell-Off

Despite the caution, JPMorgan sees any sell-off as a buying opportunity, emphasizing that the ETF's approval does not directly impact mining economics or alter competitive dynamics.

Positive Outlook for Bitcoin Mining

JPMorgan maintains a positive outlook, stating that the "stars are aligning for a big year in bitcoin mining." The bank's top value pick remains Iris Energy (IREN), rated as overweight.