Wednesday Newsletter

Explore the latest trends, gain valuable insights, and stay informed in the dynamic cryptocurrency ecosystem.

17 April 2024

In a recent analysis, Blockware Solutions’ Mitchell Askew challenges concerns over post-halving Bitcoin mining profitability, dismissing them as unwarranted amidst a significant downturn in crypto miner stock prices.

Investor confidence in Bitcoin (BTC) mining profitability following the halving event has plummeted, reflecting in the steep decline of Bitcoin mining shares both domestically and internationally. However, according to industry expert Mitchell Askew, these fears lack substantial grounds.

“Most of the concerns investors have are unfounded,” stated Askew, who heads analysis at Blockware Solutions, a Bitcoin mining firm. He pointed to worries surrounding post-halving profitability and Bitcoin’s recent 7.5% price drop as the primary drivers behind the decline in mining stock values.

Askew predicts that the halving will trigger a “buy the news” phenomenon for both public Bitcoin miners and the private ASIC market.

Notable Bitcoin mining companies like Marathon Digital (MARA) and Riot Platforms (RIOT) have seen their stock prices plummet by approximately 53% and 54%, respectively, since reaching year-to-date highs in February, as per data from Google Finance.

Similarly, CleanSpark (CLSK) reached a three-year peak of $23.40 on March 25 but has since declined by 38.1% to $14.48, although it still maintains a significant increase of nearly 250% for the year.

International Bitcoin miners such as Singapore’s Bitdeer Technologies (BTDR) and Australia’s Iris Energy (IRIS), listed on the Nasdaq, have experienced drops of 40.8% and 47.6% from their mid-February year-to-date highs of $9.16 and $8.30, respectively.

The impending fourth Bitcoin halving, scheduled for April 20, will reduce Bitcoin mining rewards by half to 3.125 BTC, valued at approximately $200,000.

Askew highlighted the performance of the Valkyrie Bitcoin Miners ETF (WGMI) as evidence of post-halving profitability concerns, noting its “near zero” correlation coefficient with Bitcoin in 2024. He anticipates a rebound in mining stocks shortly after the halving.

Profitability worries emerged in late January following Cantor Fitzgerald’s report that 11 publicly listed Bitcoin miners might face unprofitability post-halving if Bitcoin’s price remained around $40,000.

Should Bitcoin’s price fail to sustain an upward trajectory post-halving, it could compel some U.S. Bitcoin miners to relocate or expand operations offshore in search of more affordable electricity costs, suggested Jaran Mellerud, founder and chief mining strategist of Hashlabs Mining.