Bitcoin Miner Stocks Plummet: Marathon, Riot, CleanSpark Take a Hit

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As the highly anticipated Bitcoin halving draws near, the mining sector faces a downturn, with stock prices plummeting despite top executives maintaining a bullish outlook. 

The imminent Bitcoin halving event, set to slash mining rewards from 900 to a 450 daily tokens, has sent shaken the mining industry. High-profile companies like Marathon Digital Holdings Inc., Riot Platforms Inc., and CleanSpark Inc. have witnessed their stock prices fall consecutively for three days, with the Valkyrie Bitcoin Miners ETF dropping by approximately 28% this month. 

Moreover, the current geopolitical tensions, especially the conflict between Iran and Israel have heightened the sector’s struggles, reducing people’s interest in them and further driving the fall in share price. 

Despite the current volatility, mining executives has shown optimism about the sector’s prospects. 

“Riot is here for the long term,” stated Jason Les, CEO of Riot Platforms, in a recent interview with Bloomberg Television. He further emphasized, “Our long-term investment thesis on Bitcoin is strong and I think we have the setup for a very positive movement in Bitcoin over the next several months here.” 

Similarly, Tyler Page, CEO of Cipher Mining, remarked, “I think it is very hard to predict Bitcoin prices on any kind of short-term time frame. But over the course of years, you have seen a steady course of adoption.”

With the 4th Bitcoin halving just 2 days away from significantly reducing mining rewards, Bitcoin miners bet that only increased demand from new spot ETFs and heightened adoption rates can counterbalance the halving’s impact. 

Analysts Gautam Chhugani and Mahika Sapra from Bernstein noted the strong performance of spot Bitcoin and exchange-traded funds which have diverted “retail liquidity” away from mining stocks. The CEOs interviewed by Bernstein highlighted that despite the halving, miner dollar revenues are at all-time highs, offering a solid cushion. They also pointed out the low debt levels on their balance sheets, which could help weather the reduced rewards.

The expected drop in miner rewards has also sparked discussions about potential industry consolidation.