The volatile climate of the cryptocurrency industry has had an adverse effect not only on the price of crypto but also on Bitcoin mining activity.
The Viridi Bitcoin Miners ETF (“RIGZ ETF”) reported on November 17th:
Trading volumes for bitcoin mining stocks are at historically low levels, indicating these stocks are oversold by exhausted market participants.
Bitcoin Mining stocks have been crashing ever since late November 2021, as reflected by its declining share of BTC trading volume, which hit its all-time high at 44% and is now just 2%. While over the same period, BTC’s daily trading volumes have risen rapidly because the price decreased.
Based on the Viridi research, BTC’s daily trading volume is approximately $4 billion, which shows consistency. Individuals are selling it as a result of the cryptocurrency market’s unusual contagion effects and the more restrained macroeconomic situation.
As Per Jadran Mellerud, a Bitcoin mining analyst and consultant, the market is saturated and running out of sellers, as seen by mining stocks’ present modest trading volumes in comparison to BTC.
Bitcoin Mining Stocks Average Trading Volume
Trading volumes for the whole BTC mining industry are now quite low, and they are mostly focused on a small number of these stocks:
Since November 2021, Marathon has been responsible for 46% of the total trading volume, followed by Riot at 27% and Hut 8 at 7%. Together, these three companies have made up 80% of the sector’s trading volumes over the past year.
The research report indicates that since November 2021, Marathon has had an average daily trading volume of $215 million, indicating that the company has high liquidity and can support sizeable stock purchases without the price changing too much.
Whereas, the average daily trading volume for four stocks since November 2021 has been less than $1 million, which indicates that some bitcoin mining stocks are extremely illiquid.
However, according to The Viridi Bitcoin Miners ETF, some of these stocks continue to generate sizable daily volume despite the sector’s overall weak trading activity.
These high-volume equities are the most likely to be bought by significant investors, while low-volume stocks may experience rapid growth if bitcoin prices soar once again.