Investor confidence in Bitcoin's profitability in the mining sector after the cryptocurrency halved its profits has caused Bitcoin mining shares in the United States and abroad to fall - but these fears are not well-founded, says an industry analyst.
"Investors will realize that their fears were mostly unfounded," - said Mitchell Askew, chief analyst at Bitcoin mining firm Blockware Solutions. He cited concerns about post-halving profitability and the 7.5% drop in Bitcoin's price over the past week as the main catalysts for the miners' share price decline.
According to Google, Marathon Digital (MARA) and Riot Platforms (RIOT) - two of the largest BTC mining companies - have seen their share prices fall by about 53% and 54%, respectively, from their highest levels since the beginning of the year in February (YTD).
CleanSpark (CLSK) reached its highest level in three years at $23.40 on March 25, but has since fallen 38.1% to $14.48, although it is still up nearly 250% this year.
Non-U.S. bitcoin diggers such as Singapore's Bitdeer Technologies (BTDR) and Australia's Iris Energy (IRIS) - both listed on the Nasdaq - have fallen 40.8% and 47.6% from their mid-February highs of $9.16 and $8.30 in early February.
The price drop came amid an expected fourth Bitcoin halving on April 20, during which Bitcoin mining rewards will be cut in half to 3.125 BTC - worth about $200,000.
Askew said there are concerns about post-halving profitability, as evidenced by the performance of the Valkyrie Bitcoin Miners ETF (WGMI) - an actively managed fund that tracks the Bitcoin mining market - which had a "near-zero" correlation coefficient with Bitcoin in 2024.
WGMI's price against Bitcoin is approaching its previous local low, but Askew expects a "rebound" in mining company share prices soon after the halving.
