Bitcoin Miners and Other Public Crypto Firms Are Beating the Market: JP Morgan

Publicly traded crypto firms dominated in January, outpacing the crypto market itself in terms of market cap growth.

Among publicly traded crypto firms tracked by JP Morgan—which includes Coinbase and Bitcoin miners like Marathon and Riot—the group’s overall market cap expanded 14% in January, pushing the Wall Street firms’ total valuation to $108 billion.

The crypto market itself ended January with a market cap of around $3.2 trillion, notching an 8% expansion as President Donald Trump assumed the White House after positioning himself as America’s first crypto president, JP Morgan analysts wrote in a Tuesday report.

Still, the market cap of publicly traded crypto firms grew at nearly double that of the overall crypto market as the regulatory environment under Trump began to take shape, analysts noted.

Former SEC Chair Gary Gensler resigned, a controversial crypto accounting rule for banks was swiftly rescinded, and acting SEC Chair Mark Uyeda unveiled a new crypto task force—placing SEC Commissioner Hester Peirce, an industry advocate, at the sweeping initiative’s helm.

Bitcoin’s price rose 9% to $102,300 by January’s end, but Coinbase’s market cap expanded 17%, even though the exchange’s trading volumes declined 17% from the previous month.

The SEC’s willingness to work with crypto firms may benefit Coinbase, which the SEC sued over alleged violations of registration requirements in 2023. But the performance of publicly traded crypto firms may have been bolstered largely by speculation surrounding artificial intelligence, according to JP Morgan analyst Charles Pearce.

Riot’s market cap expanded 20% in January, outpacing other firms, as the miner started evaluating how additional power capacity at its Texas facility could be leveraged in AI and high-performance computing (HPC) settings.

“Part of the story for Bitcoin miners has become their ability to transition to HPC data centers,” Pearce told Decrypt. “Some of the stocks have caught a bid from that thesis, which is going to be separate from how the crypto market in aggregate moves.”

Miners like Bitdeer began exploring AI following Bitcoin’s so-called halving last year, a quadrennial event that slashed the rewards miners earn from validating transactions. To be specific, Bitcoin’s block reward fell to 3.125 Bitcoin from 6.25 Bitcoin—though the increased scarcity has helped substantially boost the price of each coin in the months since.

The asset manager Bernstein argued then that mining firms could derive as much as a third of their future enterprise value from AI verticals, expecting miners will pivot around a fifth of their power capacity towards AI by 2027.

As Riot unveiled its potential AI push, Riot’s Executive Chairman Benjamin Yi said in a press release that the move could provide Riot with sustainable revenue for years to come.

He said, “While we continue to believe in the significant upside of our Bitcoin mining operations, we have recognized for some time the value of having long-term, predictable cash flows from a well-capitalized AI/HPC counterparty.”

Edited by Andrew Hayward