- Bitcoin miner stocks have dropped this year due to fears over their post-halving profitability
- Analyst Mitchell Askew from Blockware Solutions says these fears are unsubstantiated
- The Bitcoin halving on April 20th will cut mining rewards in half to 3.125 BTC
Bitcoin’s upcoming halving is making investors nervous about miner profitability, leading to falling stock prices for publicly traded mining companies. However, one analyst believes these fears are overblown.
Miner Stocks Have Dropped Significantly in Recent Months
Marathon Digital, Riot Platforms, CleanSpark and other publicly traded Bitcoin mining companies have seen their share prices fall over 50% from their highs earlier this year.
For example, Marathon Digital and Riot Platforms are down 53% and 54% respectively since hitting peaks in February. CleanSpark hit a 3-year high in late March but has since tumbled over 38%.
Overseas miners like Bitdeer Technologies and Iris Energy, both listed on the Nasdaq, have also dropped sharply, falling over 40% from mid-February highs.
Analyst: Fears About Post-Halving Profitability Are Unsubstantiated
According to Mitchell Askew, head analyst at Bitcoin mining firm Blockware Solutions, the recent miner stock declines have been driven largely by investor fears about profitability after the halving reduces rewards.
However, Askew believes these concerns are overblown and “mostly unsubstantiated.” He expects mining stocks to rebound after the halving, which he describes as a “buy the news event.”
The halving cuts mining rewards from 6.25 BTC to 3.125 BTC per block, worth around $200,000 at current prices. Some analysts warn many miners may struggle to mine profitably if Bitcoin’s price doesn’t rise sufficiently to offset the halving.
However, Askew points to the weak correlation between mining stocks and Bitcoin’s price this year as evidence that current negative sentiment is unwarranted. He believes investors will come to realize this after the halving occurs.
Conclusion
While the halving has stoked fears about miner profitability that have put pressure on mining stock prices, some industry experts view the selloff as an overreaction. They expect stocks to recover once the halving is in the rearview mirror. The coming months will reveal whether miner profitability lives up to post-halving expectations.
