Investor confidence in Bitcoin’s mining sector is shaken as the cryptocurrency halves its rewards, leading to a drop in Bitcoin mining company shares both in the U.S. and globally. However, industry analyst Mitchell Askew from Blockware Solutions believes these fears are mostly unfounded, and “Investors will realize their fears were mostly unsubstantiated.”
The main reasons behind the drop in mining company stock prices are concerns about profitability after the halving and a recent 7.5% decrease in Bitcoin’s price.
Askew predicts, “[The] halving will be a ‘buy the news’ event for public Bitcoin miners and the private ASIC market.”
Marathon Digital (MARA) and Riot Platforms (RIOT), two major BTC miners, have seen their share prices plummet by around 53% and 54%, respectively, since hitting their year-to-date highs in February, according to Google Finance.
CleanSpark (CLSK) reached a three-year peak of $23.40 on March 25 but has since fallen by 38.1% to $14.48, although it’s still up nearly 250% for the year.
Bitcoin mining companies outside the United States, like Bitdeer Technologies (BTDR) in Singapore and Iris Energy (IRIS) in Australia, have seen their stock prices drop significantly since mid-February.
This drop coincides with the upcoming fourth halving event for Bitcoin, scheduled for April 20. During this event, the rewards for Bitcoin miners will be reduced by half, making it less profitable to mine Bitcoin.
Investors are worried about the profitability of Bitcoin mining after the halving, which is reflected in the performance of the Valkyrie Bitcoin Miners ETF (WGMI). This ETF, which tracks the Bitcoin mining market, has shown very little correlation with the price of Bitcoin in 2024.
While the ETF’s price compared to Bitcoin is nearing a previous low point, experts like Askew anticipate a bounce-back in mining stocks shortly after the halving event.
Also Read: Bitcoin Halving Could Pave the Way for Greener Mining Operations
