Bitcoin mining stocks: 3 key themes emerging for 2025 says analyst

In the sport of baseball, one of the most commonly cited statistics is the batting average, usually framed over an entire season. Though somewhat informative, it doesn’t provide much of an advantage. Instead, managers want to know situational statistics, such as batting average when there are runners in scoring position (RISP). The philosophy of course is that great players rise to the occasion.

It’s a similar story on Wall Street. Let’s take a look at blockchain miner CleanSpark as an example. Over the past five years, CLSK stock gained over 81% of equity value. However, this statistic alone doesn’t capture all the gyrations that occurred during this period. By the capricious nature of good or bad timing, investors may either love CleanSpark or absolutely hate it.

Interestingly, on any given week over the past five years, the chances that CLSK will end on a positive note clocks in at only 47.7%. From a weekly performance perspective, CleanSpark suffers from a slightly negative bias — worse than coin-toss odds. This baseline probability is calculated by taking the number of positive return weeks — which is available to Barchart Premier members through the Historical Data section — divided by the total number of weeks in the dataset (i.e. trailing five years).

Mathematically, this process aligns with a frequentist approach. On average, when CLSK ends as a positive return, investors gain just under 14%. On the down weeks, they average losses of 10.96%. While the frequentist method offers some useful data, it doesn’t take into account how extreme circumstances impact the fear-greed continuum.

On the other end of the scale, market makers — who are essentially taking opposite-side wagers — deploy a combination of frequentist and Bayesian methodologies to arrive at estimated projections of price movements. However, the Bayesian element algins with stochastic models rooted in the random walk theory.

The idea is that new information is used to update pricing expectations. However, the flaw is that common models like Black-Scholes or binomial trees don’t readily account for situational anomalies like volatility clustering or sudden seismic shifts. That’s where dynamic, event-based probability analyses come into play.

Accounting for ‘RISP’ in CLSK Stock

For the business week ended Dec. 27, CLSK stock suffered a loss of just under 12%. Looking at the past 261 weeks (not including the week just concluded), there have been 70 instances where CLSK suffered a double-digit loss. Of this tally, 36 subsequent weeks (or 51.43%) ended with a non-zero positive return, 32 weeks suffered a loss and two weeks saw a flat return.

In other words, when a large drop occurs in CLSK stock, contrarian investors are barely willing to buy the dip. Again, under everyday normal circumstances, there’s roughly a 48% chance that between Monday’s opener and Friday’s close, the blockchain miner will end the week in the black. Certainly, the context of extreme volatility incentivizes the bulls but not by much.

If you were to take a directional wager on CLSK, it may not be the smartest move. Even with an oversold indication, the chances that the bulls would dive in are only minimally above a coin toss. In baseball terms, the presence of RISP hardly improves CleanSpark’s batting average.

However, this Bayesian calculation reveals that on the positive response weeks following a double-digit loss, the average return lands at 15.66%. For negative response weeks, the average loss sits at 11.29%. It’s a slight form of volatility kinesis but the conclusion is quite clear: immediately following a deep bout of red ink, both the upside and downside movements become more intense, even if their frequencies don’t change much.

Given this framework, speculators may be better served considering a long iron condor for CLSK stock. A combination of a bull call spread and bear put spread, the long iron condor aims for significant volatility. So long as the target security hits the uppermost strike price (the bull call’s short strike) or falls to the lowermost strike price (the bear put’s short strike), the trader collects the maximum payout.

Simplifying the Condor Selection Process

To be honest, condor strategies tend to be intimidating due to the four legs involved (two legs per each vertical spread). For some securities, it’s not unusual to see hundreds of potentially viable iron condors for a particular options chain. Naturally, the unaccustomed investor can find the process of discovering the best condor to be frustrating.

Fortunately, with the dynamic probability analysis — the calculation of RISP in the above baseball analogy — it’s much easier to decipher the most compelling long iron condors. By applying the average return following a weekly double-digit loss to the current market price, we can estimate the following Friday’s potential price range. For CLSK stock, the spectrum comes out to $8.68 on the downside and $11.31 on the upside.

By Steve Goldstein

Quantum computing, AI and bitcoin plays screen as some of the most speculative companies

Hope you got all the presents you wanted during the festive season.

If not, there are always lottery stocks. That is, highly speculative stocks that can go either boom or bust.

But how do you find these companies? A research paper from authors including Alok Kumar of the University of Miami notes that, if all market participants were passive investors, the ratio of dollar volume to market capitalization would be equal for all stocks. So to find the most speculative stocks, look for the stocks with the highest turnover ratios.

MarketWatch, as we've done from time to time, screened New York Stock Exchange- and Nasdaq-listed stocks, with market caps of at least $500 million, to find such companies.

Here's the list:

   Symbol  Name                                     Last year's annual profit, before items, millions of dollars 
   RGTI    Rigetti Computing, Inc.                  -75.1 
   BBAI    BigBear.ai Holdings, Inc.                -60.4 
   BTBT    Bit Digital, Inc.                        -13.9 
   OPEN    Opendoor Technologies Inc                -275 
   CAN     Canaan Inc. Sponsored ADR Class A        -414.2 
   CHPT    ChargePoint Holdings, Inc. Class A       -457.6 
   PLUG    Plug Power Inc.                          -1,368.80 
   TLRY    Tilray Brands, Inc.                      -245 
   QBTS    D-Wave Quantum Inc.                      -82.7 
   QUBT    Quantum Computing Inc.                   -27 
   PACB    Pacific Biosciences of California, Inc.  -306.7 
   RCAT    Red Cat Holdings Inc                     -21.5 
   RZLV    Rezolve AI Limited                       -0.3 
   SERV    Serve Robotics Inc                       -24.8 
   WOLF    Wolfspeed Inc                            -573.6 
   ACHR    Archer Aviation Inc Class A              -457.9 
   NVTS    Navitas Semiconductor Corporation        -145.4 
   CLSK    Cleanspark, Inc.                         -145.8 
   IQ      iQIYI, Inc. Sponsored ADR Class A        271.8 
   MARA    MARA Holdings, Inc.                      261.2 

The companies the screen identifies make intuitive sense: it's a list filled with quantum computing, AI and bitcoin plays. Most aren't profitable, though Asian video provider iQIYI and bitcoin miner MARA Holdings have made money this year.

For what it's worth, homebuilder NVR (NVR) and travel provider Booking Holdings (BKNG) screen as the least speculative stocks using this methodology, which makes sense given that each share carries a four-digit cost, making them ill-suited to day trading.

The markets

U.S. stock index futures were lower early Friday with the Dow Jones Industrial Average futures (YM00) down 120 points, or 0.27%, to 43,582, while S&P 500 (ES00) futures fell 19.5 points, or 0.32%, to 6,075, and Nasdaq 100 futures (NQ00) fell 79 points, or 0.36%, to 21,929.

European and Asian shares were mixed Friday in thin year-end trading, after China reported lower corporate profits in November, the fourth straight month of decline, with European markets moving in narrow ranges as they reopened after Christmas holidays.

Germany's DAX DX:DAX edged 0.1% higher to 19,863.29, while the CAC 40 FR:PX1 in Paris was up 0.4% at 7,308.99. Britain's FTSE 100 UK:UKX inched 0.1% lower, to 8,147.00. The dollar fell to 157.71 Japanese yen (USDJPY) from 158.00 yen. It had been trading below 150 yen until the past few days.

   Key asset performance                                                Last       5d     1m     YTD     1y 
   S&P 500                                                              6040.53    2.87%  0.70%  26.64%  26.33% 
   Nasdaq Composite                                                     20,035.34  3.31%  5.11%  33.47%  32.69% 
   10-year Treasury                                                     4.59       7.10   32.60  70.91   79.28 
   Gold                                                                 2649.9     1.93%  0.51%  27.90%  26.83% 
   Oil                                                                  69.73      0.39%  1.40%  -2.24%  -5.54% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The chart

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-Steve Goldstein

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