This past week has seen a significant decline in the shares of major publicly traded Bitcoin (BTC) mining companies, coinciding with the cryptocurrency’s drop below the pivotal $90,000 mark. Increasing net losses and heightened competition contributed to one stock plummeting nearly 30% within a single trading day, highlighting a broader downturn across the industry.
The performance index that tracks Bitcoin mining stocks reached its lowest point since September 2024, indicating widespread struggles among key players in the market.
In particular, Cipher Mining Inc. reported a fourth-quarter net earnings figure of $18 million, equating to $0.05 per diluted share, yet still faced a notable decline in share value. Even with adjusted earnings rising to $51 million ($0.14 per diluted share), investor sentiment leaned towards apprehensions about future profitability, primarily influenced by Bitcoin’s persistent price volatility. The company experienced increased hashrate capabilities, reaching approximately 13.5 EH/s due to fleet upgrades, but its net loss expanded to nearly $45 million from approximately $26 million reported the previous year.
Bitdeer Technologies Group also unveiled disappointing financials, leading to a more severe drop in its stock price. The Singapore-based company’s net loss for 2024 was significantly larger this year, amounting to $599.2 million compared to $56.7 million in the previous year, alongside a reduction in total revenue from $368.5 million to $349.8 million.
Following such announcements, investor reactions were harsh. Shares of Bitdeer decreased by 29%, closing at $9.26 on Nasdaq, marking a three-month low. Meanwhile, Cipher Mining’s stock fell over 17%, closing at $4.10, a four-month low in response to its recent financial disclosures.
The negative trend permeated the entire mining sector, not limited to companies announcing new financials. Notable declines were also seen at Riot Platforms, the largest publicly traded miner by market capitalization, which experienced an 11% drop to $12.42, the lowest it had been since November 2023. Other deep declines were noted with firms like Canaan, which saw a 17% fall to $1.29, and IREN, which dropped 13.6% to $8.78.
Market sentiment has been exacerbated by Bitcoin’s price decline, which recently dipped significantly, testing levels near $86,000—the lowest since November. Such instability received attention from investors, driving them to reassess their positions in mining stocks as proxies for investing in Bitcoin itself.
The Bitcoin Mining Stock Index also echoed this downturn, experiencing a steep decline not seen in over five months. Even Riot Platforms, which showcased record revenue nearly reaching $377 million and a net income of $109 million, saw its stock retreat to multi-month lows. This trend indicates that investors are increasingly concerned with Bitcoin’s overall performance rather than solely the financial health of mining companies.
In summary, the mining sector is facing tough times, primarily influenced by the cryptocurrency’s price volatility and growing losses among leading companies, which has led to a drastic drop in stock values across the board. Investors seem to be highlighting Bitcoin’s performance over the operational achievements of mining firms, suggesting a challenging road ahead for the industry in the face of economic pressures.