Bitcoin miner stocks drop on ‘unsubstantiated’ post-halving profit fears: Analyst

0


Investor confidence in the Bitcoin (BTC) mining sector’s profitability after the cryptocurrency halves its rewards has sent Bitcoin mining shares in the United States and abroad tumbling — but those fears aren’t well founded, an industry analyst says.

“Investors will realize their fears were mostly unsubstantiated,” said Mitchell Askew, head analyst at Bitcoin mining firm Blockware Solutions. He cited post-halving profitability concerns and Bitcoin’s 7.5% price fall over the last week as the main catalysts behind miners falli stock prices.

“[The] halving will be a ‘buy the news’ event for public Bitcoin miners and the private ASIC market.”

Marathon Digital (MARA) and Riot Platforms (RIOT) — two of the largest BTC miners — have seen their share prices tank around 53% and 54%, respectively, since their February year-to-date (YTD) highs, according to Google Finance.

CleanSpark (CLSK) hit a three-year high of $23.40 on March 25 but has since dropped 38.1% to $14.48, although it’s still up nearly 250% this year.

CleanSpark’s change in share price over the last month. Source: Google Finance

Non-U.S. Bitcoin miners such as Singapore’s Bitdeer Technologies (BTDR) and Australia’s Iris Energy (IRIS) — both listed on the Nasdaq — have fallen 40.8% and 47.6% since their mid-February YTD highs of $9.16 and $8.30

The price falls come as Bitcoin’s fourth halving is expected on April 20, which will see Bitcoin mining rewards cut in half to 3.125 BTC — worth about $200,000.

Askew said the post-halving profitability fears a evidenced by the performance of the Valkyrie Bitcoin Miners ETF (WGMI) — an actively managed fund tracking the Bitcoin mining market — which has had a “near zero” correlation coefficient with Bitcoin in 2024.

WGMI’s price relative to Bitcoin is approaching a previous local bottom, however Askew expects a “rebound” in mining stocks shortly after the halving.

Related: Riot, TeraWulf and CleanSpark best-positioned miners for Bitcoin halving — CoinShares

Profitability concerns resurfaced in late January when Cantor Fitzgerald reported 11 publicly-listed Bitcoin miners wouldn’t mine profitability post-halving if Bitcoin’s price remained around $40,000, its price at the time.

If Bitcoin’s price doesn’t continue to rise post-halving, it could force some U.S. Bitcoin miners to migrate or expand offshore in search of cheaper electricity costs, according to Jaran Mellerud, founder and chief mining strategist of Hashlabs Mining.

Magazine: Wolf Of All Streets worries about a world where Bitcoin hits $1M: Hall of Flame