Bitcoin mining companies listed on major stock exchanges experienced significant stock price declines this past week amid a continued drop in Bitcoin’s value, which fell below the crucial $90,000 mark. As these companies grappled with increased losses and heightened competition, the most poorly performing stock plummeted nearly 30% in a single trading day. This downturn extended throughout the sector, with overall mining stock indices reaching their lowest points since September 2024.
Shares of Cipher Mining, for example, saw a decline despite reporting a fourth-quarter net earning of $18 million, translating to $0.05 per diluted share. The adjusted earnings of $51 million ($0.14 per diluted share) were overshadowed by investor concerns regarding the long-term profitability of mining activities as Bitcoin’s price volatility continues to disrupt the mining economics landscape. The company’s hash rate increased to 13.5 EH/s following fleet upgrades, but ultimately, a growing net loss of nearly $45 million—up from just below $26 million reported the previous year—was of primary concern to investors.
Similarly, Bitdeer Technologies reported staggering figures, facing a net loss of $599.2 million for 2024 compared to $56.7 million in the previous year, coupled with a drop in total revenue from $368.5 million to $349.8 million. The company attributed some of its struggles to strategic decisions aimed at developing proprietary technology, which temporarily limited growth in its hash rate and impacted overall financial performance.
Investor reactions to these disappointing earnings reports were swift and detrimental. Bitdeer’s stock plunged 29% during one trading session, closing near its three-month low. Cipher Mining experienced a 17% decline in response to its financial reporting, achieving a four-month low at $4.10. The negative trend was mirrored across various companies; for instance, shares of the largest publicly traded miner by market capitalization registered an 11% loss, marking their lowest valuation since November 2023.
Notably, other companies such as Canaan and Iris Energy also faced substantial declines, with decreases of 17% to $1.29 and 13.6% to $8.78, respectively. This widespread drop can be linked to the prevailing negative sentiment surrounding Bitcoin, which recently underwent a noticeable decline in value, touching levels around $86,000—the lowest since November.
Another significant player in the sector, Riot Platforms, reported record revenue of nearly $377 million and a net income of $109 million. However, even strong financial results failed to shield the stock from declines as shareholders were primarily concerned with Bitcoin’s erratic performance, leading to further drops in stock price.
The combined effect of these disappointing earnings reports and a bearish Bitcoin market has resulted in a grim outlook for the stocks of Bitcoin mining companies, further affirming their reliance on Bitcoin’s price movements. Investors have increasingly adopted a cautious stance, viewing mining stocks as a secondary means to gain exposure to Bitcoin within regulated exchanges, where stock values exhibit a close correlation to Bitcoin’s performance.
Overall, the recent downturn across the Bitcoin mining sector highlights the complex interplay between cryptocurrency fluctuations and the financial health of associated mining companies, ultimately safeguarding investors’ interests will depend significantly on a stabilization in the value of Bitcoin. With the mining stock index falling dramatically and companies grappling with losses, the outlook for these businesses remains uncertain amid ongoing market volatility.