Bitcoin Mining Stocks Continue to Plummet as BTC Price Holds Steady
Bitcoin mining stocks took a hit this week, with Marathon Digital stock price dropping to $8, its lowest level since April 10th. Similarly, Riot Platforms and Argo Blockchain retreated to $9, matching their April lows, while Argo Blockchain was hovering at $1.
Typically, Bitcoin mining stocks closely follow the direction of BTC. However, Bitcoin has been holding relatively well amid a sense of fear spreading across the market. The CNN Money fear and greed index dropped to an extreme fear level of 25, while the US dollar index (DXY) surged to $106.7, reaching its highest point in months.
In addition to the movement in Bitcoin mining stocks, other prominent indicators suggest a volatile market. The iShares 20+ Treasury ETF (TLT) plummeted to its lowest level since 2014. Popular ETFs like Invesco QQQ and SPDR S&P 500 ETF (SPY) also experienced significant drops of more than 7% from their year-to-date highs.
The small-cap Russell 2000 index has been hit even harder, entering a correction zone. As previously noted, Bitcoin mining stocks such as Cipher Mining and Riot were among the best-performing stocks in the Russell 2000 this year.
Despite Bitcoin outperforming equities, Bitcoin mining stocks like Riot Platforms, Argo Blockchain, and Marathon Digital have remained under pressure. Bitcoin was trading at $26,700 on Thursday, surpassing this month’s low of $24,800. Other cryptocurrencies like Tron, Chainlink, and Terra Classic have also seen recent price increases.
These stocks likely crashed as investors remain concerned about macroeconomic factors in the US. The Federal Reserve has indicated another rate hike this year, potentially raising interest rates to between 5.50% and 5.75%. There are also persistent inflation fears, with recent data showing consumer inflation jumping to 3.7% in August. Rising gasoline prices may cause inflation to rise to 4% in the near future. The ongoing strike by UAW workers also raises concerns about higher vehicle prices.
Furthermore, the profitability of Bitcoin mining stocks this quarter is a driver of the stock price decline. While Bitcoin has remained above $26,000, it has stayed below the year-to-date high of over $32,000. Additionally, a death cross formation in Bitcoin’s price chart suggests further downside risks.
In conclusion, Bitcoin mining stocks have continued their downward trend despite Bitcoin’s resilience. Factors such as market fear, inflation worries, interest rate hikes, and concerns over profitability have all contributed to the decline in these stocks. As the market remains volatile, investors need to closely monitor the performance of Bitcoin and its mining sector.
