The cryptocurrency market continues its eager anticipation of the halving event, with ongoing commentary on the subject. Accordingly, after the halving of Bitcoin mining rewards, investors’ confidence in the profitability of the Bitcoin mining sector led to a decline in Bitcoin mining stocks in the USA and abroad. However, an industry analyst states that these fears are not based on solid foundations.
What to Expect in Mining?
Mitchell Askew, the chief analyst at Bitcoin mining firm Blockware Solutions, explained that investors will realize their fears are baseless. He attributed the post-halving profitability concerns and Bitcoin’s 7.5% price drop last week as the main factors behind the fall in miners’ stock prices, sharing the following statement:
“The halving will be a news buying event for public Bitcoin miners and the private ASIC market.”
According to Google Finance data, two of the largest Bitcoin miners, Marathon Digital (MARA) and Riot Platforms (RIOT), saw their stock prices drop by about 53% and 54% respectively since their year-to-date highs in February.
CleanSpark (CLSK) reached a three-year high of $23.40 on March 25 but has since fallen by 38.1% to $14.48, though it still shows an approximate 250% increase this year.
Outside the US, Bitcoin miners listed on Nasdaq such as Singapore’s Bitdeer Technologies (BTDR) and Australia’s Iris Energy (IRIS) have also seen their stock prices drop by approximately 40.8% and 47.6% respectively from their mid-February YTD highs.
The price drops emerged as the market anticipates Bitcoin’s fourth halving event on April 20, where Bitcoin mining rewards will halve to 3.125 Bitcoins.
Prominent Figures Discuss Halving
Askew expressed concerns that post-halving profitability in 2024 will be proven by the performance of the Valkyrie Bitcoin Miners ETF (WGMI), a fund that actively follows the Bitcoin mining market with a near-zero correlation coefficient with Bitcoin. WGMI’s price is approaching the previous local low, but Askew expects a recovery in mining stocks shortly after the halving event.
In late January, Cantor Fitzgerald reported that if Bitcoin’s price remains around $40,000, 11 public Bitcoin miners would not be profitable post-halving, reigniting profitability concerns.
Hashlabs Mining‘s founder and chief mining strategist Jaran Mellerud suggests that if Bitcoin’s price does not continue to rise post-halving, some US Bitcoin miners might be forced to migrate in search of cheaper electricity costs or expand overseas.
