With just over two days left until the Bitcoin (BTC) halving, shares of the main mining companies listed on the exchange have experienced a significant drop in value. This was due to expectations of reduced revenues, which are putting pressure on mining company shares.
In fact, many stocks fell more than 30% because of these risks. With the reward cut, many miners will shut down their machines, which could put pressure on the sector’s profitability.
Pressure on mining companies
Shares of the main Bitcoin miners, such as Marathon, CleanSpark and Riot Blockchain, suffered falls for the third consecutive day on Tuesday (17). Marathon shares fell 3.6% on the stock market, while CleanSpark shares lost 1.43% and Riot fell almost 6%.
On a monthly basis, Riot saw a 29% drop in share price, Marathon lost 23% and CleanSpark fell 14%. But the biggest loss occurred with the Valkyrie Bitcoin Miners ETF, which fell by approximately 30% in April alone.
Additionally, rising geopolitical tensions between Iran and Israel over the weekend fueled a feeling of risk aversion among investors. However, despite these challenges, top executives at these companies remain optimistic.
In recent years, mining has managed to achieve low-cost operations and advances in equipment efficiency, reducing the demand for capital. Furthermore, the growing demand for Bitcoin will mitigate the impacts of the cut in the issuance of new BTC, according to miners.
In this sense, miners believe they can compensate for the expected $10 billion in annual revenue losses resulting from the appreciation of BTC post-halving.
“Riot is here for the long term. Our long-term investment thesis on Bitcoin is strong and I think we have the infrastructure for a very positive move on Bitcoin in the coming months,” said Jason Les CEO of Riot.
With the upcoming Bitcoin halving, daily BTC production will drop from 900 BTC to 450. Bitcoin mining company Hut 8 has already announced a cut in production costs by 30%.
Consequence on the price of Bitcoin
The price of Bitcoin is performing exactly as expected around the halving period. Before the event, BTC entered a strong pre-halving pullback, with an 18% drop from its all-time high.
For a few weeks after the Bitcoin halving, analysts do not expect any major movement in the price of BTC, as miners could sell their BTC to cover the drop in revenue.
However, after a few weeks, investors may start a new bull run. They are also betting on increased demand from new Bitcoin ETFs, which should drive prices higher and offset the negative effects of the halving.
“I think it is very difficult to predict the price of Bitcoin in any short-term period. But over the years, what we saw was a steady course of adoption. Over the longer and longer time frames, I believe we can remain very optimistic about network adoption,” said Tyler Page, CEO of Cipher Mining.
Source: https://www.criptofacil.com/acoes-de-mineradoras-de-bitcoin-caem-ate-30-antes-do-halving/
