Bitcoin miners are experiencing a significant drop in stock prices as the halving is scheduled for later this week.
The fourth Bitcoin halving, around April 20, will reduce mining rewards by half to 3,125 BTC, currently worth about $200,000.
Bitcoin miner stocks are falling
Share prices of Marathon Digital (MARA) and Riot Blockchain (RIOT), the major players in Bitcoin mining, saw significant declines, falling about 53% and 54%, respectively, from their highs in early February this year, according to the report data from Google Finance.
CleanSpark (CLSK) shares rose to a three-year high of $23.40 on March 25, but have since declined 38.1% to $14.48. Despite this decline, the value remains up almost 250% over the year.
The Valkyrie Bitcoin Miners exchange-traded fund (ETF) has also fallen by around 28% this month alone.
Meanwhile, non-U.S. Bitcoin miners such as Singapore's Bitdeer Technologies (BTDR) and Australia's Iris Energy (IRIS), both listed on Nasdaq, saw significant declines of 40.8% and 47.6%, respectively, since they reached their annual highs so far in 2017 in mid-February.
The recent rise in geopolitical tensions over the weekend further fueled risk aversion among investors.
Miners are optimistic about Bitcoin’s long-term growth
Despite these challenges, CEOs of Bitcoin mining companies remain positive, Bloomberg reports. They point to factors such as low-cost operations, advances in device efficiency and increasing demand for crypto assets, which they say can help offset the expected $10 billion in annual revenue losses from the upcoming halving.
Miners are banking on increased demand from the new spot Bitcoin ETFs to drive BTC prices higher to counteract the negative impact of the halving. Bitcoin has seen significant growth since traditional asset management firms launched ETFs in January. These funds have attracted significant capital from a broader investor base beyond the crypto community.
Concerns about profitability emerged 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 U.S. miners may need to move or expand their operations overseas to access more affordable electricity costs reach.
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