Are Crypto Stocks Still Worth Watching as Bitcoin Consolidates?

Not too long ago, crypto-related stocks generated buzz as Bitcoin BTC/USD surged to new heights. These stocks gained significant popularity due to the excitement

As Bitcoin BTC/USD trades sideways in recent weeks, showing minimal price movements compared to its recent H1 rally, crypto-related stocks have lost some of their appeal.

While Bitcoin is down 8.7% over the past six months, showing a crucial support level at around $63,000, it is still up 143% over the past year and 44% YTD. Although its recent consolidation has attracted less media attention, a breakout from this key resistance could lead to a significant upward move.

However, this recent lack of interest in crypto-related stocks could be due to the rise of Bitcoin ETFs, such as the iShares Bitcoin Trust IBIT. These ETFs offer direct exposure to Bitcoin, attracting investors who might have previously considered mining stocks for their crypto exposure.

But how have some of the more popular Bitcoin mining stocks performed compared to Bitcoin itself?

MARA Enters Bear Market After Earnings MissMarathon Digital Holdings (NASDAQ:MARA), a significant player in the Bitcoin mining space, faced challenges during Bitcoin's recent consolidation.

While Bitcoin is down 8.7% over the past six months, MARA's share price plunged over 20% during that same period and is down more than 30% YTD. This sell-off comes as no surprise following the company's recent earnings miss.

On August 1, 2024, Marathon Digital reported a quarterly loss of ($0.72) per share, far worse than the expected ($0.23) loss. Revenue also fell short of expectations, reaching $145.14 million compared to an anticipated $157.86 million.

Despite this poor performance, analysts remained relatively optimistic, with a consensus Hold rating and a price target of $19.61, indicating a potential upside of around 21.5%.

However, given MARA's underperformance compared to Bitcoin and its weak earnings, it may take more than a Bitcoin rally to reverse its current downtrend.

RIOT's Stock Plunged 60% From 52-Week HighAnother major Bitcoin mining company, Riot Platforms (NASDAQ:RIOT), experienced a different fate.

Over the past six months, RIOT's stock dropped nearly 40%, down around 60% from its 52-week high. But unlike Marathon, RIOT's recent earnings beat analysts' expectations.

The company's latest earnings report, released on July 31, 2024, showed a loss of ($0.32) per share, double the expected ($0.16) loss. Riot's revenue also slightly missed expectations, reaching $70 million, down 8.7% year-over-year.

Despite these struggles, analysts maintained a bullish outlook on RIOT, with a Buy consensus and a price target of $16.60, suggesting more than 100% potential upside.

While this might make RIOT seem like a bargain, its stock's significant underperformance compared to Bitcoin suggests that it may take more than a Bitcoin breakout to turn things around.

Conclusion: Analysts See Potential for Marathon and Riot Recovery Marathon Digital and Riot Platforms have both dramatically underperformed Bitcoin, even as the cryptocurrency trades near crucial levels.

While analysts are optimistic about their long-term potential, the current weakness in earnings and stock price momentum raises caution. Investors eyeing these names should keep a close watch on Bitcoin's price action, but as the saying goes, it's never good to try and catch a falling knife. These stocks may require more than a Bitcoin breakout to regain strength.

The article "Are Crypto Stocks Still Worth Watching as Bitcoin Consolidates?" first appeared on MarketBeat.

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