Bitcoin miners are currently facing a significant decrease in stock prices as the impending halving approaches. Marathon Digital (MARA) and Riot Blockchain (RIOT), two major players in the Bitcoin mining industry, have seen their stock prices plummet by approximately 53% and 54%, respectively, from their peak values earlier this year in February. CleanSpark (CLSK) experienced a surge to a three-year high of $23.40 on March 25, only to drop by 38.1% to $14.48 since then. This decline, however, does not negate the fact that CleanSpark is still up by almost 250% for the year.
The effects of the upcoming halving are not limited to U.S. Bitcoin miners. Companies like Bitdeer Technologies (BTDR) in Singapore and Iris Energy (IRIS) in Australia, both listed on the Nasdaq, have seen significant declines of 40.8% and 47.6%, respectively, since reaching their year-to-date highs in mid-February. The Valkyrie Bitcoin Miners exchange-traded fund (ETF) has also witnessed a drop of around 28% this month alone.
Despite the challenges posed by the halving and the recent geopolitical tensions, CEOs of Bitcoin mining companies remain optimistic. They believe that factors such as low-cost operations, equipment efficiency advancements, and increasing demand for crypto assets will help offset the anticipated $10 billion annual revenue losses from the halving. The CEOs are counting on the demand from new spot Bitcoin ETFs to drive BTC prices higher and counteract the negative effects of the halving.
There are concerns about profitability post-halving, especially if Bitcoin’s price remains stagnant. Jaran Mellerud, founder and chief mining strategist of Hashlabs Mining, suggested that some U.S. miners may need to relocate or expand offshore operations to access more affordable electricity costs if Bitcoin’s price does not continue to rise after the halving. Cantor Fitzgerald’s report in late January sparked concerns that 11 publicly-listed Bitcoin miners would face profitability challenges if Bitcoin’s price remained around $40,000.
The upcoming Bitcoin halving is significantly impacting mining stocks, both domestically and internationally. While the sector faces challenges, there is optimism among industry leaders that the demand for crypto assets and the rise of new spot Bitcoin ETFs will help mitigate the negative effects of the halving. However, concerns about profitability post-halving remain, and miners may need to adapt their operations accordingly to remain competitive in the changing landscape of the Bitcoin mining industry.
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