Investor confidence in the profitability of the Bitcoin mining sector post-halving has waned, leading to a significant downturn in Bitcoin mining shares globally. Mitchell Askew, head analyst at Blockware Solutions, reassures investors that these concerns are largely unfounded, anticipating a “buy the news” event following the halving. The recent 7.5% price decline in Bitcoin has contributed to fears surrounding post-halving profitability.
Major Bitcoin mining companies like Marathon Digital (MARA) and Riot Blockchain (RIOT) have experienced substantial declines in their share prices, dropping around 53% and 54%, respectively, from their year-to-date highs in February. Similarly, non-U.S. miners such as Bitdeer Technologies (BTDR) and Iris Energy (IRIS) have also seen significant decreases in their stock prices since mid-February.
The fourth Bitcoin halving, scheduled for April 20, will reduce mining rewards to 3.125 BTC. Despite concerns, Askew notes that the Valkyrie Bitcoin Miners ETF (WGMI), which tracks the mining market, has shown a “near zero” correlation with Bitcoin in 2024. This suggests a potential rebound in mining stocks following the halving event.
Profitability concerns surfaced earlier when Cantor Fitzgerald reported that several publicly listed Bitcoin miners might struggle to remain profitable post-halving if Bitcoin’s price remained around $40,000. Jaran Mellerud, founder of Hashlabs Mining, suggests that stagnant prices could prompt U.S. miners to seek cheaper electricity costs offshore, potentially impacting domestic mining operations.
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