Ahead of the anticipated Bitcoin halving later this week, the mining sector is witnessing a downturn, with significant declines in stock prices, though executives remain hopeful.
Stocks of major Bitcoin mining firms like Marathon Digital (MARA) and Riot Blockchain (RIOT) have plummeted by roughly 53% and 54% respectively from their highs in February, according to Google Finance. CleanSpark (CLSK) hit a three-year peak at $23.40 on March 25 but has since fallen 38.1% to $14.48, still up nearly 250% for the year.
The Valkyrie Bitcoin Miners ETF has also seen a sharp decrease, dropping about 28% in April.
International mining companies such as Singapore’s Bitdeer Technologies (BTDR) and Australia’s Iris Energy (IRIS), both Nasdaq-listed, have suffered declines of 40.8% and 47.6% respectively since their peaks earlier in the year.
Increased geopolitical tensions have intensified investor caution, contributing to the sell-off.
Despite these setbacks, Bitcoin mining CEOs are optimistic about the sector’s future. According to Bloomberg, they cite low operational costs, improved mining equipment efficiency, and growing demand for cryptocurrencies as potential buffers against the expected annual revenue loss of $10 billion due to the halving.
Miners also hope that new spot Bitcoin ETFs, which have drawn significant investment since their January launch, will help boost Bitcoin prices and mitigate halving impacts.
In late January, Cantor Fitzgerald raised concerns that if Bitcoin prices stayed around $40,000, profitability challenges could affect 11 publicly listed miners. Jaran Mellerud, a mining expert, noted that unless Bitcoin’s price rises post-halving, some U.S. miners might consider relocating or expanding abroad for cheaper electricity.