Crypto Mining Stocks Extend Declines as Bitcoin, Ether Prices Fall

However, DA Davison sees mining stocks as a better buying opportunity than bitcoin itself.

AccessTimeIconDec 6, 2021 at 4:52 p.m. UTC
Updated Dec 6, 2021 at 6:17 p.m. UTC

Aoyon Ashraf is crypto mining reporter with more than a decade of experience in covering equity markets

Crypto mining stocks, which are most levered to bitcoin and ether prices as most have been holding onto the mined coins on their balance sheets, on Monday continued their slump that started in the beginning of the month.

  • Bitcoin prices have fallen almost 17% since reaching $58,000 on Dec. 1, after Federal Reserve Chair Jerome Powell signaled growing discomfort with high inflation, stoking expectations of a faster unwinding of crisis-era stimulus.
  • On Monday, large-cap miners Marathon Digital (MARA) and Riot Blockchain (RIOT) both fell more than 5% early in the day, although Marathon eventually recovered most of those losses. The shares of other miners such as Argo Blockchain (ARBK), Hut 8 (HUT), Hive Blockchain (HIVE) and Cipher Mining (CIFR) were down 9%, 3%, 6% and 12% respectively.
  • “In our view, with the market gripped by Omicron fears at a time when valuations are inflated, the selling pressure could easily continue,” said Wall Street investment banking firm DA Davidson’s analyst Chris Brendler, who remains bullish on bitcoin given its “strong underlying fundamentals especially against the prospects for a sustained pandemic.”
  • However, he sees “a materially better” buying opportunity in mining stocks than bitcoin itself as there should be more upside for the miners when bitcoin recovers. He also noted that the pullback in bitcoin should help slow the hashrate recovery while the miners are still “super profitable” with the price of bitcoin near $50,000.
  • Meanwhile, bitcoin miner Greenidge Generation (GREE) was the only outperformer among mining stocks on Monday, rising about 9% in a bounce back following its sharp decline last week after U.S. Sen. Elizabeth Warren expressed concern about the miner’s environmental footprint.
  • Other crypto-linked stocks such as MicroStrategy, which buys and holds bitcoin on its balance sheet, also fell 6%.

UPDATE (Dec. 6, 18:17 UTC): Updated with note from DA Davidson.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Aoyon Ashraf is crypto mining reporter with more than a decade of experience in covering equity markets

CoinDesk - Unknown

Aoyon Ashraf is crypto mining reporter with more than a decade of experience in covering equity markets

Trending

1
CoinDesk - Unknown
Bitstamp Inactivity Fee Canceled After Customer Response

The crypto exchange had said it would be charging small, non-active accounts 10 euros per month.

CoinDesk - Unknown
2
CoinDesk - Unknown
Crypto News Roundup for July 6, 2022

With crypto markets trading in the green and a look at crypto job satisfaction just as the crypto winter began, CoinDesk’s “Markets Daily” is back with the latest news roundup.

CoinDesk - Unknown
3
CoinDesk - Unknown
Genesis Confirms Exposure to Three Arrows Capital

Digital Currency Group, the crypto conglomerate that owns Genesis, is assuming some of the liabilities.

CoinDesk - Unknown
4
CoinDesk - Unknown
Ethereum's Sepolia Testnet Successfully Switches to Proof-of-Stake

The Sepolia proof-of-work chain merged with its proof-of-stake chain on Wednesday, taking Ethereum one step closer to its own Merge moment.

CoinDesk - Unknown