Key Points
- Bitcoin miners see a sharp decline in stock prices ahead of the halving scheduled two days from now.
- The rise of Bitcoin ETFs could be one cause of the drop in price stock prices, as interest is shifting from miner stocks to ETFs.
- Mining companies bet on more demand from Bitcoin ETFs to push prices higher, Bloomberg reports.
According to the latest reports from Bloomberg, Bitcoin mining companies are seeing a significant decline in their stock prices ahead of the halving event.
Bitcoin’s halving is two days ahead and it will bring a code update for the digital asset that will drastically reduce revenue for miners.
Shares from important mining companies, including Marathon Digital Holdings Inc., Riot Platforms Inc., and CleanSpark Inc., fell for three consecutive days. According to the same reports, the Valkyrie Bitcoin Miners ETF also dropped by around 28% in April.
This downward trend continues, and the short interest in crypto mining stocks continues to build around the recent events, including Iran’s attack against Israel from the past weekend. The event triggered a shift to a risk-off environment for investors.
Mining companies’ CEOs remain optimistic
However, chief executives of the mining companies remain bullish, addressing low-cost operations, more effective equipment, and the growing demand for Bitcoin. These can reportedly make up for $10 billion in annual revenue losses due to the upcoming halving.
For instance, Riot Platforms CEO, Jason Les, addressed that his company is here in the long run in a recent interview with Bloomberg. He highlighted that their long-term investment thesis on Bitcoin is strong, and they have a setup for a positive movement in Bitcoin over the next few months.
Bitcoin mining involves the use of specialized computers that validate transactions on the blockchain and earn a reward in BTC. The reward represents the vast majority of the mining revenue, and it gets cut in half every four years during the halving event.
The next halving is scheduled for April 20, and it will be the fourth such event for Bitcoin since 2012. It will reduce the amount of BTC reward to 450 tokens in daily production from the current number of 900.
The other day, Galaxy noted that this halving could be different from the previous cycles.
The company highlighted that in the entire Bitcoin history, the coin has never reached a new all time high before the halving event.
All eyes are focused on the #BitcoinHalving, which is only a few days away.
In bitcoin’s history, it has never previously reached a new all-time high prior to the halving. In prior cycles, the halving has served as a catalyst that eventually pushed bitcoin to new heights.
With… pic.twitter.com/3A6uF25T83
— Galaxy (@galaxyhq) April 16, 2024
In the prior cycles, the halving was always a catalyst for Bitcoin’s price that eventually took the coin to new heights. But now, BTC has managed to break new ATHs ahead of the event, and this means that history may not truly repeat itself, and there’s still time for price accumulation.
Miners bet on Bitcoin ETFs to push prices higher
Miners are now also betting on more demand from the new Bitcoin ETFs that will push prices higher in order to mitigate the negative impact of the halving.
Recently, the crypto industry also received a dose of optimism following the Hong Kong announcement regarding the approval of Bitcoin and Ethereum ETFs.
At the moment of writing this article, Bitcoin is trading just a little under $64k, up by almost 1% in the past 24 hours on CoinMarketCap.