Beyond the ETF boom: Bitcoin mining stocks offer strategic upside

Bitcoin ETFs have opened the floodgates. With over USD 100 billion in net inflows into U.S. spot Bitcoin ETFs as of the end of October 2025, millions of investors now have easy, regulated exposure to digital assets, albeit passive ones.

For investors seeking higher upside, direct digital asset holdings remain an option, but present risks in legal, custody, cybersecurity, and liquidity. Where can investors find this higher upside, whilst mitigating these risks?

One answer: Bitcoin mining stocks.

Upside of leveraged operating businesses and digital asset holdings, but with better safeguards

“Bitcoin mining companies are not just passive reflections of BTC’s price,” said Paul Yu, Chief Executive Officer of Cango Inc. “Miners benefit from being leveraged operating businesses. As Bitcoin’s price rises, miners benefit disproportionately because their primary operating costs, such as energy, hardware, and labor, are largely fixed,” he added.

This dynamic is evident across the broader mining sector. Despite recent volatility in digital asset markets, publicly listed mining firms continued to report healthy gross profits and resilient margins through Q3 2025, with many operators maintaining gross margins around 40%. This performance underscores the structural advantage of leveraged operating models in periods of price appreciation, even amid cyclical downturns.

On Oct 31, 2025, BTC closed at just over USD100,000. The additional revenue generated from that price increase far exceeded any marginal rise in operational costs.

Bitcoin mining stocks also share one of the most appealing characteristics of Bitcoin ETFs: regulated access. They report audited financials and operate under corporate governance frameworks. This regulated access has become especially important since the SEC clarified in early 2024 that institutional investors unable to hold digital assets directly can still achieve Bitcoin exposure through compliant equities.

In addition, the U.S. government recently signed the GENIUS Act into law, laying out obligations for stablecoin issuers such as anti-money laundering law compliance and suspicious activity reporting requirements. Together, these measures signal a maturing market where trust and stability are becoming central to digital asset investing.

Yield and treasury management for a historically yield-less asset class

Bitcoin mining stocks generate income, unlocking revenue from block rewards and transaction fees, unlike Bitcoin itself, which doesn’t generate yield without staking. This opens the door for miners to implement capital return strategies such as share buybacks or dividend issuance, introducing asymmetric upside to the balance sheet. Instead of being forced to sell mined Bitcoin at market lows to cover expenses, disciplined Bitcoin miners can “mine-and-hold,” giving them the flexibility to time sales for maximum effect or use their balance sheet to borrow at lower rates to fund M&A activity and infrastructure expansion.

What to evaluate: Diversified drivers beyond Bitcoin

Mining stocks are correlated with Bitcoin’s price, but their performance is driven by more than BTC alone. A combination of external and fundamental factors can significantly impact returns.

Miners with operational alpha here will find advantages through technology (such as deployment of next-generation ASICs), optimized power usage, and alternative revenue streams, amplifying returns beyond the spot price itself. Companies including Riot Platforms, Hut 8, and Cango Inc. are actively pivoting by leveraging their expertise in running energy-efficient mining facilities to acquire and integrate vital power capacity for AI and high-performance computing (HPC) workloads.

The convergence of energy and compute is a model that can be described as an emerging industry trend, positioning miners with strong infrastructure networks to capitalize on the rapidly growing global demand for AI, data analytics, and enterprise cloud computing services.

1. Energy sources, costs, and generation

Mining is power-hungry. The most successful operators spread their operations across multiple regions and negotiate cheap energy contracts. This approach gives them a buffer against shocks, including political tensions, trade disputes, or sudden shifts in local energy prices.

The source of that energy is becoming just as important. With regulators tightening rules around emissions, miners leaning into solar, wind, or hydro have a clearer path forward. Cleaner energy isn’t just a box to tick for compliance; it’s starting to shape who stays competitive in the long run.

2. Mining productivity indicators

On top of self-explanatory metrics like cash cost of mining 1 BTC or total BTC mined per month, investors can track other mining-specific performance indicators.

Hashrate capacity: The overall computational power that a company’s mining operation can generate, usually measured in EH/s (Exahashes per second) is the equivalent of 1 quintillion guesses per second to solve the cryptographic puzzles that secure the network and validate transactions. The higher the hashrate, the higher the miner’s probability of successfully mining blocks. BTC mined per EH/s is the natural extension of this and a core performance indicator for miners today. In the context of Bitcoin halving, the best miners are constantly adding to their capacity to remain competitive in the race to mine a finite resource.

Fleet efficiency: The energy efficiency of a company’s mining process, measured in J/TH (Joules per terahash), where one terahash represents 1 trillion cryptographic guesses.

3. Treasury strategy

Publicly listed miners balance costs, volatility, and long-term growth through treasury management. Some “HODL” reserves, others sell strategically, and some mix both. Transparent and consistent policies are critical signals for investors.

Bitcoin holdings of top 5 publicly traded Bitcoin miners

Source: BitcoinTreasuries – As of 20 November 2025

What’s next?

In today’s environment marked by Bitcoin volatility, macro uncertainty, and tightening regulation, Bitcoin mining stocks may offer a compelling risk-adjusted levered bet. They combine exposure to BTC with the predictability of a regulated, asset-heavy business model.

For disciplined investors who pay close attention to treasury strategy, energy sourcing, and execution, miners could provide outsized upside if BTC regains its footing – while also serving as a more transparent and governable alternative to direct crypto exposure.

For more information about Cango Inc., please visit their official website: https://ir.cangoonline.com/

Disclaimer: This is a paid post and should not be treated as news/advice.