Bitcoin mining stocks have experienced a significant decline of up to 27% over the past three trading days, despite the recent rally in Bitcoin’s price, which almost reached $64,000. One analyst suggests that this drop could be attributed to misplaced concerns about the upcoming halving event, but also sees it as a potential opportunity to acquire mining stocks at a lower cost.
According to Google Finance, Marathon Digital Holdings (MARA) and Riot Platforms (RIOT), the two largest Bitcoin miners, have seen their stock prices fall by 18.5% and 21.9% respectively since February 27. CleanSpark (CLSK) and TeraWulf (WULF) have also been heavily affected, with their stock prices dropping by 27.5% and 25.4% respectively.
In contrast, Bitcoin’s price has surged from around $51,000 to a yearly high of $63,700, before slightly cooling down to its current price of $61,350. This trend has caught the attention of gold proponent and crypto skeptic Peter Schiff, who wonders if the decline in Bitcoin mining stocks is a sign of trouble ahead for Bitcoin.
A crypto trader named “Chris” also shared his experience on a platform, stating that he initially invested in CleanSpark but decided to sell his shares as Bitcoin approached $65,000, as things started to look overvalued.
Mitchell Askew, the head analyst at Blockware Solutions, believes that the most logical explanation for this divergence is investors’ caution in deploying capital into Bitcoin miners ahead of the halving event. The halving will reduce Bitcoin miner rewards from 6.25 BTC to 3.125 BTC, leading to a decrease in profitability. However, Askew points out that previous instances of divergence between Bitcoin and mining stocks turned out to be opportunities to acquire mining stocks at a discounted price.
The period following the halving, scheduled for April 20, could be crucial for publicly-listed miners in the United States, according to Jaran Mellerud, one of the founders and chief mining strategists at Hashlabs Mining. He suggests that some high-cost miners may move offshore to maintain profitability. However, Askew disagrees, stating that miners in the US have low energy costs and have prepared for the decreasing block subsidy by acquiring the latest-generation hardware.
In summary, Bitcoin mining stocks have experienced a significant decline despite Bitcoin’s recent rally. This drop could be due to concerns about the upcoming halving event, but some analysts see it as an opportunity to acquire mining stocks at a lower cost. The period following the halving could be crucial for publicly-listed miners, but experts believe that US miners are well-prepared and unlikely to be negatively affected.