A slew of crypto mining stocks are up today on positive news from the European Union.
So what do you need to know?
Shares of Riot Blockchain (NASDAQ:RIOT), Marathon Digital Backgrounds (NASDAQ:MARA) and Hut 8 Mining (NASDAQ:HUT) are each up more than 5% today. Other miners like Bit Farms (NASDAQ:BITF), BitNile (NYSEMKT:NILE) and Digital bit (NASDAQ:BTBT) are also all in the green.
The catalyst appears to be an update that a legislative proposal in the European Union is moving forward again without a provision that would restrict proof-of-work cryptos.
The news relieves the pressure Bitcoin (BTC-USD) miners who feared being targeted due to the energy intensity of their operations. Additionally, late last week, an analyst at Stifel said that several crypto mining stocks now looked undervalued after their recent selloff.
What Happened With Crypto Mining Stocks
Crypto fans are keeping a close eye on the Markets in Crypto Assets regulatory package in the European Union, which aims to protect consumers and create guidelines for the regulation of digital assets. Members of Parliament had already struck down an amendment that would add restrictions on proof-of-work cryptos. However, in the past week concerns have risen again that some members may be pushing to add these restrictions.
Now, as the package moves on to the next round of discussions, the proof-of-work cryptos seem safe.
why is it important
Many countries such as China and Kazakhstan have banned cryptocurrency mining due to its massive energy consumption. There are still fears that the same type of bans will happen in Europe and set a precedent that could then spread to the United States. Following the unveiling of President Joe Biden’s Executive Order on Crypto, Bitcoin’s energy consumption is front and center.
These concerns have put pressure on crypto mining stocks over the past few months as investors worry about how they will handle potential new regulations or energy requirements. Right now, Stifel analyst Suthan Sukumar sees the value in multiple names.
Crypto mining stocks are enjoying a nice rebound today on news of EU legislation and a bullish rating from analysts. No one knows how long their rally lasts. Shares of crypto miners had fallen sharply this year, with some stocks falling more than 10%.
As of the date of publication, Joel Baglole had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.