Why Bitcoin Mining Stocks Might Outperform BTC in 2025
🎯 Summary
Podcast Episode Summary: Why Bitcoin Mining Stocks Might Outperform BTC in 2025
This 22-minute episode from Coin Bureau, hosted by Guy, explores the investment thesis for publicly traded Bitcoin mining stocks, arguing they could potentially outperform Bitcoin (BTC) itself in the 2025 cycle, especially for investors seeking traditional finance exposure. The discussion focuses on analyzing the strategies, scale, and operational efficiency of five major publicly listed mining companies.
1. Focus Area
The primary focus is Crypto/Web3, specifically the Bitcoin mining sector and the investment dynamics surrounding publicly traded mining stocks versus direct BTC investment. Secondary themes include corporate strategy shifts (HODL vs. selling to cover costs) and diversification into AI/HPC.
2. Key Technical Insights
- Hashing Power Metrics: The episode explains that mining power is measured in exa-hashes per second (EH/s), where one exa-hash equals one quintillion guesses per second, illustrating the massive computational scale of these operations (e.g., Mara at 54+ EH/s).
- Cooling Technology: Mara Holdings utilizes advanced liquid immersion cooling systems, which involve submerging mining rigs in non-conductive fluid to maintain optimal operating temperatures, suggesting a focus on efficiency and longevity.
- Hardware Specificity: A key technical challenge noted is that specialized Bitcoin ASICs cannot be easily repurposed for AI or high-performance computing (HPC) workloads due to entirely different hardware requirements.
3. Market/Investment Angle
- Alternative Exposure: Mining stocks offer traditional investors an accessible entry point to BTC exposure via standard brokerage accounts, bypassing the complexities of self-custody (keys, wallets).
- Cash Flow Advantage: Unlike direct BTC holdings, mining companies generate cash flow, providing a layer of financial stability that can lead to outperformance during bull markets.
- Weakening Correlation: The historical strong correlation between mining stocks and BTC has weakened since 2021, primarily because the availability of spot BTC ETFs and corporate BTC holders (like MicroStrategy) now provides easier direct exposure for traditional investors.
- Cost Efficiency is Key: Operational cost per BTC mined (e.g., CleanSpark’s $34k vs. Kanga’s $70.6k) is highlighted as a critical differentiator determining profitability during market downturns.
4. Notable Companies/People
- Mara Holdings (MARA): Largest publicly traded miner by power (54+ EH/s). Notable for its aggressive full HODL strategy and using stock offerings to buy BTC on the open market. Holds over 48,100 BTC.
- Riot Platforms (RIOT): Second largest miner (34 EH/s). Historically sold BTC for operations but recently purchased $510M in BTC. Diversifying some capacity into AI/HPC.
- CleanSpark (CLSK): Highly cost-efficient miner ($34k/BTC) committed to a pure-play Bitcoin mining strategy, focusing on aggressive ASIC acquisition during bear markets.
- Hut 8 (HUT): Oldest miner, recently merged with US Bitcoin Corp. Splitting operations: Hut 8 Corp focuses on HPC/AI, while the subsidiary American Bitcoin (partnered with Eric and Donald Trump Jr.) handles core mining.
- Kanga Inc. (CANG): Recent pivot from auto-financing (sold business to an Affirm/Antalpha affiliate). Has a high cost basis ($70.6k/BTC) but plans massive expansion to reach ~50 EH/s.
5. Regulatory/Policy Discussion
The discussion noted that mining stocks are generally viewed more favorably by conservative investors because they operate within the established regulatory framework of traditional stock markets, carrying fewer “regulatory question marks” than direct crypto investments.
6. Future Implications
The industry is seeing a strategic split:
- HODL Maximizers (e.g., Mara): Aggressively accumulating BTC reserves using equity financing.
- Cost Leaders (e.g., CleanSpark): Focusing purely on operational efficiency to mine BTC cheaply.
- Diversifiers (e.g., Riot, Hut 8): Exploring AI/HPC revenue streams to supplement mining income, though this introduces complexity.
The success of miners in 2025 will likely depend on their ability to maintain low operating costs and execute their chosen treasury strategy effectively.
7. Target Audience
Crypto Investors, Financial Professionals, and Equity Analysts interested in the intersection of traditional finance (equities) and the digital asset sector, particularly those seeking leveraged exposure to Bitcoin’s price movements.
🏢 Companies Mentioned
đź’¬ Key Insights
"The first is that back in 2021, BTC itself wasn't readily accessible to many traditional investors. Today, though, it's a very different story. With spot Bitcoin ETFs now available in the United States, traditional investors can easily get BTC exposure, meaning there is far less need to get indirect exposure through mining stocks."
"However, since then, none of the five stocks we've covered today have managed to reclaim their previous all-time highs, even as BTC itself has surged past its old peak. In other words, that strong correlation miners once enjoyed with BTC has notably weakened over time."
"Kanga's cost per BTC mined remains notably high, around $70,600 per BTC as of Q1 2025."
"CleanSpark has driven its mining cost down to roughly $34,000 per BTC, making it one of the most cost-efficient miners in the industry."
"Riot is also diversifying its business by pivoting some mining capacity towards artificial intelligence. This trend has become increasingly popular among Bitcoin miners, given the potentially higher profits in AI and high-performance computing compared to Bitcoin mining alone."
"In July 2024, Mara announced that it would adopt a full HODL strategy, meaning the company wouldn't sell any of its mined BTC to cover operational costs."