This week was generally a good one for cryptocurrencies, so it followed that crypto mining stocks also saw price increases. According to data compiled by S&P Global Market Intelligence, some of the top names in the segment landed in positive territory over the course of the week.
These included Riot Platforms(NASDAQ: RIOT), with its nearly 7% gain; Marathon Digital Holdings' (NASDAQ: MARA) more impressive 14% rise; Bitfarms(NASDAQ: BITF) and Hut 8 Mining(NASDAQ: HUT) both increasing at around 4%; and Cipher Mining(NASDAQ: CIFR) bringing up the rear with a 1%-plus bump.
Crypto investors -- of both coins/tokens directly and, indirectly, with miners -- were encouraged by this week's major pieces of economic news.
Those developments in the U.S. economy weren't, on the surface, very heartening. On Wednesday, the Bureau of Economic Analysis, a federal agency, issued a new estimate for second-quarter gross domestic product (GDP) year-over-year growth. This revision shaved more than a few basis points off the estimate, with the Bureau changing it to 2.1% from the previous 2.4%.
Two days later, the Bureau of Labor Statistics, a fellow fed agency, published its latest unemployment data. The data revealed that the unemployment rate rose to 3.8% in August, the highest level since February 2022. That came as a surprise to many economists who collectively estimated that the rate would be unchanged from the July figure of 3.5%.
But in a case of finding silver linings in dark clouds, such developments could actually be beneficial to cryptocurrencies and the businesses that mine them, like Riot Platforms, Marathon, Bitfarms, Hut 8, and Cipher Mining.
That's because fed inflation hawks could become more dovish when facing signs of macroeconomic weakness. A more sluggish-than-expected GDP number and a surprise uptick in unemployment certainly qualify. These are two important yardsticks all monetary policy officials follow and pore over; no one wants a sputtering GDP or a spiraling jobless rate. Higher interest rates threaten to exacerbate both.
And loftier rates are no friends of cryptocurrencies or associated assets. Very broadly speaking, higher ones tend to drive investors toward more predictable, safer, and steadier assets...and away from more speculative plays. Cryptocurrencies, with their ever-volatile nature, are very high on the speculative scale.
So, these recent indicators are seen as generally crypto-favorable, hence the bullishness in these kinds of investments. That being said, neither the GDP revision or the rise in unemployment are overly extreme or shocking. Neither should be the basis of any investment decision on coins, tokens, or the mining companies creating them. Fundamentals always matter, and investors should concentrate with laser focus on them.
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