Some stocks of leading Bitcoin mining companies have experienced a significant drop in value as we approach the anticipated Bitcoin halving on April 20, which is only three days away. During this event, miners’ rewards will be reduced by half. Consequently, these mining companies are currently dealing with the negative impact on their stock prices due to this upcoming revenue decrease.
Bitcoin Mining Firms Face the Heat of Halving
Top Bitcoin mining companies like Marathon Digital Holdings, CleanSpark, and Riot Blockchain have seen their shares decrease for three straight days up to Tuesday. Furthermore, the Valkyrie Bitcoin Miners ETF has suffered a loss of around 28% over the past month.
In addition, the heightened geopolitical frictions during the weekend have triggered risk aversion among investors. Nevertheless, the heads of these corporations remain positive, pointing to cost savings, technological advancements in productivity, and surging interest in digital currencies as potential compensators for the projected $10 billion yearly revenue declines due to the software revision. Jason Les, CEO of Riot Platform, shared this outlook with Bloomberg.
“Bitcoin is stable with us for an extended period. Our belief in Bitcoin’s long-term growth remains robust, and I anticipate favorable developments in the coming months.”
The approaching Bitcoin halving will cause the daily creation of Bitcoins to decrease from the current 900 to just 450. Mining company Hut 8 has previously announced reducing their production expenses by 30% in response to this change.
BTC Price Action
The Bitcoin price has followed the typical pattern leading up to the halving event. Prior to the halving, Bitcoin’s value dipped by approximately 18%, returning to more familiar prices based on past occurrences.
Following the Bitcoin halving, some analysts believe that the price of BTC may remain relatively stable for a couple of weeks as miners might need to sell their Bitcoins to make up for the decrease in revenue. Later on, there is potential for a significant surge in Bitcoin’s price as investors could become increasingly bullish.
Miners are similarly hopeful that new Bitcoin Exchange-Traded Funds (ETFs) will lead to heightened demand, boosting Bitcoin’s price and offsetting the potential downside of the halving. According to Tyler Page, CEO of Cipher Mining, this is a significant development.
In simpler terms, it’s challenging to forecast Bitcoin prices in the short term. However, over extended periods, such as years, there has been a consistent trend of increasing adoption. Therefore, we can maintain a strong optimistic outlook towards the long-term growth and adoption of the Bitcoin network.
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2024-04-17 07:59