Bitcoin Miner Stock Falls Before Halving, Miners Remain Bullish
Bitcoin miners are experiencing a significant drop in stock prices as the next halving is scheduled for later this week.
The fourth Bitcoin halving, scheduled between April 19 and 20, will cut mining rewards in half to 3,125 BTC, currently valued at approximately $200,000.
The share prices of Marathon Digital (MARA) and Riot Blockchain (RIOT), key players in Bitcoin mining, have seen significant declines, falling approximately 53% and 54%, respectively, from their peak values in early this year in February, according to data from Google Finance.
CleanSpark (CLSK) shares rose to a three-year high of $23.40 on March 25, but have since fallen 38.1% to $14.48. Despite this decrease, it continues to increase by almost 250% during the year. The Valkyrie Bitcoin Miners exchange-traded fund (ETF) has also fallen about 28% this month alone.
Meanwhile, non-US Bitcoin miners such as Singapore’s Bitdeer Technologies (BTDR) and Australia’s Iris Energy (IRIS), both listed on the Nasdaq, have witnessed significant drops of 40.8% and 47.6%, respectively, since reaching year-to-date highs in mid-February.
The recent rise in geopolitical tensions over the weekend has further fueled risk aversion among investors.
Miners Optimistic About Bitcoin’s Long-Term Growth
Even with the abovementioned challenges, CEOs of Bitcoin mining companies maintain a positive outlook, as Bloomberg reported. They point to factors such as low-cost operations, advances in equipment efficiency, and growing demand for cryptoassets, which they believe can help offset the expected $10 billion in annual revenue losses due to the upcoming halving.
Miners are banking on increased demand for new Bitcoin spot ETFs to boost BTC prices, helping to offset the negative effects of the halving. Since the launch of ETFs by traditional asset management companies in January, Bitcoin has seen significant growth. These funds have attracted substantial capital from a broader investor base beyond the crypto community.
Concerns about profitability arose in late January when Cantor Fitzgerald reported that 11 publicly traded Bitcoin miners would face such challenges after the halving if the price of Bitcoin remained around $40,000, its value at the time.
Jaran Mellerud, founder and chief mining strategist at Hashlabs Mining, suggested that if the price of Bitcoin does not continue to rise after the halving, some US miners may need to relocate or expand their operations abroad to access lower, more affordable, electricity costs.
3,125 Bitcoins, New Reward for Miners after Halving Day
The increase in both the hash levels and the difficulty of the network comes less than 10 days before the next halving of the Bitcoin network becomes effective, which is estimated to take place on April 20.
By that time, the rewards generated by the network for each mined block will be cut in half. These will go from about 6.25 BTC to about 3,125 BTC produced every 10 minutes, which will be allocated to the mining community for its support in this work.
Another interesting effect that is being seen at this time is the drop in Bitcoin reserves in the hands of miners. This indicates that many BTC are being traded on the main exchanges, precisely taking advantage of the rebound in prices prior to the halving.
Just as the aforementioned network values increased, they are also expected to face a post-halving drop, as the reward margin may not be viable for a large percentage of mining operators, as the profits may not offset the expenses. operations associated with this practice.
Bitcoin is trading at about USD $70,178 per unit, an increase of 1.3% in the last 24 hours.
By Leonardo Perez