Crypto stocks tumbling at year-end was a ‘healthy’ pullback: Analyst

Mitchell Askew of Blockware Solutions said investors cashed in some profits during the end-of-December holiday period after a strong month.

On the last trading day of 2023, major crypto and Bitcoin mining-related stocks experienced a notable decline of up to 17%, which some analysts view as a “healthy pullback.” According to Google Finance, Bitcoin mining firms, in particular, faced substantial drops in their stock prices. Marathon Digital Holdings (MARA) shares plummeted by 16.6% to $23.5 on December 29, while Riot Platforms (RIOT) saw a 12.1% decrease to $15.5. Hut 8 Corp (HUT) and Hive Digital Technologies (HIVE) also experienced declines of 17.3% and 15.1%, respectively.

MicroStrategy (MSTR), often considered a proxy for Bitcoin, observed a 5.4% fall to $631.6. Coinbase (COIN), the crypto exchange whose shares surged over 400% in 2023, reported a 6.6% decline to $173.9, with an additional 1.25% drop to $171.7 in after-hours trading.

Despite the sharp decrease in stock prices, Mitchell Askew, the head analyst at Bitcoin mining firm Blockware Solutions, characterized the market dip as a “healthy pullback.” He mentioned that Bitcoin mining firms were previously overextended beyond their 2023 highs, despite Bitcoin’s stability around $43,000 for the month of December.

Markus Thielen, head of research at cryptocurrency financial services firm Matrixport, shared a similar perspective, noting that they had warned investors about fair value or potential overvaluation of stock prices relative to Bitcoin.

The decline in Bitcoin mining company shares may be linked to investor concerns about the upcoming Bitcoin halving event scheduled for April. Askew dismissed these concerns as largely “unsubstantiated,” explaining that public miners with efficient ASICs and low power costs are well-equipped to withstand the halving without significant issues.

In 2023, Bitcoin registered a 152% increase, reaching $42,325, but this performance was surpassed by at least 15 cryptocurrency-related stocks, according to nsquaredcrypto. Marathon Digital Holdings (MARA) notably stood out as one of the best performers among cryptocurrency-related stocks, surging nearly 600%.