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Bitcoin Miner Stocks Will Bounce Back After the Halving, Analysts Predict

Overview of market sentiments and analyst perspectives

Despite recent drops in Bitcoin miner stocks amid concerns over post-halving profitability, industry analyst Mitchell Askew reassures investors that these fears are largely unsubstantiated.

Key takeaways:

  • Bitcoin miner stocks have fallen sharply, but analyst Mitchell Askew sees the post-halving profitability concerns as exaggerated.
  • Major miners like Marathon Digital and Riot Platforms have seen significant declines from their year-to-date highs.

The Bitcoin mining sector is experiencing a downturn in stock prices both in the United States and internationally, driven by investor apprehensions about profitability following the upcoming Bitcoin reward halving. Mitchell Askew, head analyst at Blockware Solutions, addressed these concerns, stating: 

"Investors will realize their fears were mostly unsubstantiated." 

He attributed the recent 7.5% decline in Bitcoin's price and the approaching halving event as primary reasons behind the sharp fall in miner stocks.

Significant players in the industry, such as Marathon Digital (MARA) and Riot Platforms (RIOT), have seen their share prices drop approximately 53% and 54%, respectively, since their February peaks this year, as per Google Finance data. CleanSpark (CLSK) also experienced a substantial decrease, down 38.1% from a three-year high on March 25, although it remains up nearly 250% for the year.

Impact of the 2024 Bitcoin halving and future outlook

The imminent Bitcoin halving, scheduled for April 20, will reduce mining rewards from 6.25 BTC to 3.125 BTC per block, equating to about $200,000 based on current prices. This adjustment has reignited profitability concerns that first emerged in January when Cantor Fitzgerald reported that if Bitcoin's price stayed around $40,000, 11 publicly listed Bitcoin miners would not be profitable post-halving.

 

Askew also referenced the performance of the Valkyrie Bitcoin Miners ETF (WGMI), noting it has shown a "near zero" correlation with Bitcoin in 2024, suggesting that the mining sector could decouple from direct cryptocurrency market movements. He anticipates a rebound in mining stocks soon after the halving, hinting at a temporary nature of the current downturn.

Additionally, Jaran Mellerud, founder and chief mining strategist of Hashlabs Mining, speculated that if Bitcoin’s price does not rise post-halving, some U.S. miners might relocate or expand internationally to capitalize on lower electricity costs.