Bitcoin miners are missing the crypto rally as exchanges, stablecoins surge

Since the start of the bull market, crypto stocks have traded alongside bitcoin (BTC), except for Bitcoin miners. Bitcoin's price has risen roughly 22% since Aug. 17, and crypto exchanges and stablecoins have traded at parity.

Crypto exchanges include crypto-native venues such as Bullish and Coinbase, as well as superapp Robinhood, which offers a wider range of traditional services like banking and credit cards. Stablecoins include USDC's parent, Circle, and the tokenized HELOC company Figure.

Bitcoin miners have performed exceptionally poorly. Among tracked companies, only one bitcoin mining company has outperformed BTC: Canaan (CAN), the bitcoin mining rig manufacturer. The remaining 10 bitcoin miners and mining-adjacent companies have underperformed, with a median return of only 1.8% since the bull market.

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Several bitcoin miners pivoted to HPC (high-performance computing) components and infrastructure for AI data centers. This pivot, while helping support the stock price during the crypto bear market, has split attention. Further operational risks also form a drag on miner price action.

Some of the worst offenders include Core Scientific (CORZ) and Terawulf (WULF), which have underperformed bitcoin by 27% and 24%, respectively.

Ultimately, these miners with AI data center businesses can reap benefits from both sides. Mining bitcoin can be lucrative during bull markets, while data center build-outs for AI can support balance sheets during crypto drawdowns.