Bitcoin mining stocks have experienced a significant decline of up to 27% in the past three trading days, despite the recent rally in Bitcoin’s price. Some analysts believe that this drop could be due to unwarranted concerns about the upcoming halving event, but also suggest that it presents a great opportunity to purchase mining stocks at a lower price.
The two largest Bitcoin miners, Marathon Digital Holdings (MARA) and Riot Platforms (RIOT), have seen their stock prices fall by 18.5% and 21.9% respectively since February 27, according to Google Finance. CleanSpark (CLSK) and TeraWulf (WULF) have also experienced significant declines of 27.5% and 25.4% respectively.
In contrast, Bitcoin’s price has surged from around $51,000 to a yearly high of $63,700 before slightly cooling down to its current price of $61,350.
Notably, gold proponent and crypto skeptic Peter Schiff has observed this trend and questioned whether the drop in Bitcoin mining stocks suggests trouble ahead for Bitcoin.
A crypto trader named “Chris” shared his experience on an online platform, revealing that he initially invested in CleanSpark but quickly changed his stance on mining stocks as Bitcoin approached $65,000. He decided to sell his holdings due to concerns about the market being overvalued.
Mitchell Askew, the head analyst at Blockware Solutions, believes that the most logical explanation for the divergence between Bitcoin’s price and mining stocks is investors’ caution ahead of the halving event. As the event approaches, Bitcoin miner rewards will be reduced from 6.25 BTC to 3.125 BTC. Askew highlights that in the past, similar divergences have presented excellent opportunities to acquire mining stocks at discounted prices.
The period following the halving event, scheduled for April 20, could be crucial for publicly-listed miners in the United States, according to Jaran Mellerud, founder and chief mining strategist at Hashlabs Mining. Mellerud suggests that some high-cost miners may relocate offshore to maintain profitability.
However, Askew disagrees with this view and believes it would be foolish to assume that the halving will make mining unprofitable for US miners. He emphasizes that they have some of the lowest energy costs and have been actively acquiring the latest-generation hardware in preparation for the reduced block subsidy.
Overall, the recent decline in Bitcoin mining stocks may present an attractive opportunity for investors to acquire these stocks at a lower price, despite concerns about the upcoming halving event.