07 Dec 2021
Mining stocks tumble amid bitcoin sell-off
The mining index decreased more than bitcoin over the past seven days – showing us how volatile mining stocks are.
The mining index comprises 15 of the biggest publicly listed mining companies, weighted by market cap. It is up 134% over the year, while bitcoin has increased 74%.The mining index shaved off a significant part of its massive gains this year as it tumbled following the bitcoin sell-off last weekend.The worst performing mining stock over the past seven days is Hut 8. Its share price is down 27% as bitcoin itself decreased 10%. Hut 8 is still up 234% YTD.The recent drop comes on top of a significant decline since the beginning of November, as the mining index has more than halved since then, showing us how volatile these stocks are.The mining index substantial drop compared to bitcoin is expected since mining stocks act as high beta bitcoin. The index is highly correlated to the bitcoin price but much more volatile. In bitcoin bear markets, mining stocks generally decrease faster than bitcoin itself. The same effect applies to the upside in bull markets.