Bitcoin Mining Stocks Suffer Heavy Losses Despite BTC Rally; Halving Event Poses Uncertainties
Summary:
Following Bitcoin's recent rally, Bitcoin mining stocks have experienced a significant drop of up to 27% over the past three days. Analysts suggest this might be due to apprehension about the upcoming Bitcoin halving event, which may impact miner profitability. However, some also view this as a favorable opportunity to invest in affordable mining stocks. Despite concerns about the relocation of high-cost miners post-halving, experts argue that these concerns are unfounded due to their low energy costs and advanced preparation.
Bitcoin mining companies' stocks have plummeted by 27% in just three days, in stark contrast to Bitcoin's (BTC) recent uptick, which nearly reached the $64,000 mark. An analyst hints at miners' anxiety about the imminent halving as a potential cause, but sees it as a valuable chance to buy inexpensive mining shares. As per Google Finance data, Marathon Digital Holdings (MARA) and Riot Platforms (RIOT), the top two Bitcoin miners, have plummeted by 18.5% and 21.9% respectively since February 27. CleanSpark (CLSK) bore the heaviest loss, with a 27.5% drop, followed by a 25.4% drop for TeraWulf (WULF). In comparison, Bitcoin shot up to $63,700 from around $51,000, its highest value this year, before slightly retreating to the current value of $61,350. Peter Schiff, a supporter of gold and critic of cryptocurrency, speculated whether the downturn in Bitcoin mining stocks foreshadows future problems. A crypto investor, known as Chris, stated that he initially invested in CleanSpark but reevaluated his strategy upon Bitcoin's rise to around $65,000, causing him to withdraw. Mitchell Askew, head analyst of Blockware Solutions, surmised that the halving event might be the main reason for investor apprehension. This imminent event will see Bitcoin mining rewards cut by half, creating a potential threat to profitability. Despite this, Askew maintains that these are normal price fluctuations given Bitcoin's inherent volatility, and past trends suggest they might provide a good buying opportunity. The months following the halving on April 20 will be crucial for US-based publicly-listed miners. Despite concerns about high-cost miners shifting base to retain profitability, Askew confidently brushes aside these worries, highlighting the low energy costs and advanced hardware possessed by these miners in preparation for reduced block subsidies.
Published At
3/1/2024 7:39:14 AM
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