Bitcoin Mining Stocks Dive as BTC Price Drops 20% in a Week

In brief

• Shares of some prominent Bitcoin miners, like MARA Holdings and Riot Platforms, have dropped more than 10% on Wednesday.
• Other miners have not been spared, with CleanSpark, Hut 8, and Cipher Mining all falling at least 10% as well.
• Their drops come amid a massive fall from crypto’s top asset, which has now dropped nearly 20% in the last week.

Shares of publicly traded Bitcoin miners are plummeting as Bitcoin marked a new 15-month low price, dipping to $72,185 on Wednesday—now down nearly 20% over the last week. Major BTC mining firms MARA Holdings (MARA) and Riot Platforms (RIOT) have seen their shares dip 11.6% and 10% respectively on the day to $7.99 and $13.78. Meanwhile, Hut 8 (HUT) and Cipher Mining (CIFR) have fallen even further, dropping nearly 14.3% and 20.76% since the opening bell to $50.60 and $12.92, respectively.  The miners’ drop comes amid weakening Bitcoin price action. The top crypto asset has fallen more than 4% in the last 24 hours, extending its weekly losses to almost 20%. Other top coins have fallen harder, with Ethereum showing a roughly 30% weekly dive to $2,113 and Solana down about 28% at a recent price of $90. 

Further losses may be in store for Bitcoin too, as Galaxy Head of Research Alex Thorn suggested this week that its structural weaknesses and lack of catalysts may push the price closer to its 200-week moving average of $58,000. The falling price has impacted the profitability of miners as well, with the miner profit-to-loss sustainability ratio hitting a 14-month low last week, according to data from CryptoQuant.  The ratio, which tracks the relationship between Bitcoin’s price and the profitability of running Bitcoin mining operations, points to difficulty on the operational side for miners, who also recently had to deal with a severe winter storm that blanketed the northeastern part of the United States.  The faltering profitability and the rise of demand for artificial intelligence (AI) compute has led some Bitcoin miners to completely abandon their previous businesses in favor of dedicating their resources to powering the AI boom.

For example, Bitfarms (BITF) announced it would completely wind down its BTC mining operations and pivot to AI after posting losses of $46 million late last year. Despite signaling the pivot, it has not been shielded from the share losses of the mining group, falling more than 12% on Wednesday to change hands at $2.37.  It is not just miner shares that are struggling. Major technology companies like Microsoft (MSFT), Snapchat (SNAP), and PayPal (PYPL) have seen significant double-digit percentage declines in their share prices over the last week as investors mull concerns related to AI disruption market-wide.  Market indices, like the S&P 500 and Nasdaq Composite, have fared better, dropping just 1.59% and 4.47% respectively in the last 5 days of trading. Other popular crypto-related equities like crypto exchange Coinbase (COIN) and leading Bitcoin treasury firm Strategy (MSTR) have fallen more than 8% each, recently changing hands at $164.96 and $121.79, respectively.