Better Buy: Bitcoin or Bitcoin Mining Stocks?
Bitcoin (CRYPTO: BTC) mining stocks have easily outperformed Bitcoin this year, and it's not even close. Through the first six months of 2023, the nine biggest publicly traded Bitcoin miners were up an average of 257%. In comparison, Bitcoin is up 76% year to date.
But that recent performance doesn't necessarily mean Bitcoin mining stocks are a better investment than Bitcoin. If you're a long-term buy-and-hold investor, there are three key factors to keep in mind as we head into the second half of the year.
It might sound obvious, but Bitcoin mining stocks are highly correlated with the price of Bitcoin. They go up when Bitcoin goes up, and they go down when Bitcoin goes down. In a bull market rally for Bitcoin, such as we've experienced in the first half of 2023, this makes them very attractive investment targets. However, during a bear maket, this makes them terrible investment targets. Simply stated, it's nearly impossible for them to turn a profit when the price of Bitcoin is nosediving.
Source Fool.com
