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Bitcoin mining stocks experienced a decline as volatility in the cryptocurrency market persisted. Marathon Digital, one of the largest mining companies, saw its stock drop by 2.3% on August 28, leading to a 38% decline from its peak this month. CleanSpark’s stock fell by 1.75% to $11.25, while Riot Platform decreased by over 1.4%. Other notable Bitcoin mining stocks such as Argo Blockchain, Core Scientific, TeraWulf, and Cipher Mining also witnessed reductions.
Most of these stocks remain in a bearish market, having fallen over 20% from their peak levels this year. Their performance is closely linked to Bitcoin’s price movements since March. After reaching a record high of $73,800, Bitcoin has decreased by 18.78% to $60,000. Typically, Bitcoin miners perform better when BTC prices are rising and struggle when prices fall.
Additionally, these companies have faced challenges due to the Bitcoin halving event in April, which has increased the hash rate. As a result, most have mined fewer Bitcoins than before the event. For instance, Marathon Digital mined 894 coins in March but only 692 in July. Similarly, CleanSpark mined 806 coins in March and 494 in July, while Riot Platforms produced 425 coins in March and 370 in July.
These companies are grappling with the dual challenges of reduced mining production and falling Bitcoin prices. Different companies are adopting various strategies to address these issues. Bitfarms, a leading Canadian miner, acquired rival Stronghold Digital this month. Riot Platforms has also increased its stake in Bitfarms, becoming one of its top shareholders.
Marathon Digital has diversified its operations by starting to mine Kaspa and continues to accumulate Bitcoin holdings. Earlier this month, it purchased Bitcoins worth $249 million, making it the second-largest corporate BTC holder after MicroStrategy.
The future price of Bitcoin mining stocks will largely depend on Bitcoin’s price action. Several factors could boost BTC prices. Data from the options market indicates that 93% of all call options expiring on August 30 are Out-of-the-Money, with a strike price above $60,000. A call option provides the holder the right but not the obligation to buy an asset.
In the long term, the options market forecasts a potential rally to $90,000 by the end of the year.
Bitcoin continues to attract strong inflows in the ETF market. While funds saw outflows of $127 million on August 27, they have added over $17.95 billion this year. Blackrock’s ETF holds over $22.2 billion in assets, while Fidelity’s fund has $11 billion and is nearing Grayscale’s Bitcoin Trust.
Other potential catalysts for Bitcoin include upcoming Federal Reserve interest rate cuts, a potential Donald Trump victory, the return from summer, rising US debt, and increased institutional demand.
If these factors align and Bitcoin rebounds, there is a high chance that most Bitcoin mining stocks will recover. For more updates on cryptocurrency and finance, explore more news on Global Crypto News.
