Crypto-Mining Stocks Surge Following Inflation Data Release

Shares of crypto-mining firms, Riot Platforms, Cipher Mining, and Marathon Digital Holdings have seen a significant rise, thanks to a favorable economic outlook and company-specific updates, reports The Motley Fool.

Riot Platforms‘ shares traded nearly 11.5% higher, Cipher Mining’s shares surged by 10%, and Marathon Digital Holdings’ stock rose by about 12.4%. This comes after a challenging week for the crypto industry, during which Bitcoin’s price fell nearly 5% and now lingers around $28,200.

The Consumer Price Index (CPI), a key measure of inflation, increased 0.4% in April, which aligned with economists’ expectations. The year-over-year rise was 4.9%, indicating that inflation is slowing but not too quickly, avoiding the risk of a potentially damaging hard landing for the economy.

The Federal Reserve is expected to pause its interest rate-hiking campaign and potentially cut rates, which could favor riskier assets like cryptocurrencies and consequently, crypto-related stocks. This expectation has remained steady despite the new inflation data.

Cipher Mining recently reported earnings results that slightly surpassed consensus estimates, despite slightly missing revenue estimates. The company has also purchased 11,000 additional mining machines to enhance its computing power for mining cryptocurrencies. Marathon Digital announced a partnership with Zero Two to develop two crypto-mining sites in Abu Dhabi.

Shares of Riot, Cipher, and Marathon have all seen massive increases this year, each surging at least 200%. These stocks are subject to high volatility. Therefore, investors must exercise caution, as these stocks could potentially fall if expected interest rate cuts don’t materialize.