Market Tumble: Analyst Warns Of Post-Halving Profit Anxiety Among Bitcoin Miner Stocks

According to an industry analyst, concerns about the profitability of the Bitcoin mining sector have caused a drop in investor confidence, leading to a decline in Bitcoin mining shares both domestically and internationally. The analyst argues that these fears lack foundation.

Mitchell Askew, who heads up analysis at Bitcoin mining company Blockware Solutions, reckons investors will soon see their worries weren’t backed up. He pointed out that concerns about making money after the halving and Bitcoin’s price dropping by 7.5% in the past week are the main reasons miners’ stocks are going down.

“The halving is anticipated to prompt a ‘buy the news’ response from both public Bitcoin miners and the private ASIC market.”

According to Google Finance, Marathon Digital (MARA) and Riot Blockchain (RIOT), among the biggest Bitcoin miners, have watched their stock prices drop by roughly 53% and 54% since hitting their highest points for the year in Feb.

CleanSpark (CLSK) reached $23.40, its highest point in three years, on Mar 25. However, it has fallen by 38.1% to $14.48 since then. Despite this drop, it’s up almost 250% for the year.

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

Bitcoin miners from countries outside the U.S., like Bitdeer Technologies from Singapore (BTDR) and Iris Energy from Australia (IRIS), which are both on Nasdaq, had dropped by 40.8% and 47.6%, respectively, from their peak values earlier this year in mid-February when they reached $9.16 and $8.30.

Bitcoin Halving Sparks Profitability Concerns

Moreover, the price is dropping because the fourth Bitcoin halving is coming on April 20. During this time, Bitcoin’s mining rewards will halve to 3.125 BTC, which is approximately equivalent to $200,000.

Askew noted that the worries about making less money after Bitcoin’s halving are clear from how the Valkyrie Bitcoin Miners ETF (WGMI) did. This fund, which keeps an eye on the Bitcoin mining market, hardly matched Bitcoin’s performance at all in 2024.

WGMI’s price compared to BTC is getting close to a past low point. But Askew thinks mining stocks will bounce back soon after the halving.

Profitability worries resurfaced towards the end of Jan, as Cantor Fitzgerald highlighted that 11 publicly listed Bitcoin miners might not be profitable post-halving if Bitcoin’s price lingered around $40,000, the prevailing price at that moment.

Suppose Bitcoin’s price doesn’t keep going up after the halving. In that case, some U.S. Bitcoin miners might have to move or grow their operations overseas to find cheaper electricity, says Jaran Mellerud, the founder and top mining strategist at Hashlabs Mining.

Related Reading | Unlocking Certainty: U.K.’s Plan For Clear Crypto Regulations By July

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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