According to a market study released by Arcane Research analyst Jaran Mellerud, given the sudden chaos in the cryptocurrency market, the shares of the five of the most profitable Bitcoin mining businesses have fallen by more than 50% year-to-date.
Since the beginning of 2022, the stock prices of Bitcoin mining companies Hut 8, Core Scientific, Bitfarms, Marathon Digital, and Riot Blockchain, have more than halved, according to Mellerud.
Riot, one of the major Bitcoin mining companies in the United States, was hit the worst. Riot’s stock price was down nearly 65 percent YTD as of May 11, according to the study, making it the worst performer amongst the top five public miners. The stock is currently trading at $6.84, representing an almost 70% YTD loss.
Hut 8, which has lost around 63 percent, comes in second. Core Scientific, Marathon, and Bitfarms all lost 62 percent, 58 percent, and 56 percent, respectively, in the same span.
Mellerud pointed out that the bulk of these companies own a considerable quantity of Bitcoin and were thus adversely impacted by the big decrease of BTC while discussing the causes for the Bitcoin mining stock decline. “But, most critically, the drop in bitcoin’s price results in much lower revenues for these businesses.”
Mellerud further noted that, despite the steady increase in worldwide Bitcoin mining hashrate, these companies have been mining fewer Bitcoin recently, indicating that the sector is becoming more competitive.
The cryptocurrency market has dropped 17% in the last 24 hours. While BTC fell by roughly 12% on Wednesday, ETH fell by about 22%.
The traditional market is also experiencing significant losses, and the correlation between crypto and stock has reportedly intensified in recent months.
Bitcoin fell below the important $33,000 mark this weekend, following a drop in riskier asset classes including technology stocks and the Federal Treasury’s decision to hike interest rates in order to combat decades-high inflation.
The Nasdaq 100, which is primarily dependent on the technology, has lost 25% of its value since its peak in November, while the S&P 500 has lost approximately 14%.
As Bitcoin began the second half of the third halving cycle on Thursday, Poolin mined another 0.16215354 BTC ($6,402.45) in fees.
This one, like all the others before and after it, has 210,000 blocks accessible for mining, with 105,000 of them previously mined since May 11th.
The next halving, that will take place in Q2 2024, will result in a 50% fall in supply, which is projected to cause another “supply shock.”
After the network’s fourth halving cycle in two years, approximately 90% of the 21 million BTC has been mined, leaving fewer than 7% of the total supply.
Another point worth mentioning is that the Bitcoin mining hash rate hit a peak on Wednesday at 249.1 exahashes per second (EH/s), just before the second leg of the cycle started.
As the crypto selloff worsened, the metric began to move downward. Relatively high hash rates imply that miners must use more processing power, implying that the network has gotten more secure.
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