Bitcoin Mining Stocks Rally as BTC Holds Above $30K Despite Looming Halving Concerns

The reward for mining new BTC will be cut in half soon, making it hard for less-efficient operators to survive.

AccessTimeIconOct 23, 2023 at 4:14 p.m. UTC

The shares of bitcoin (BTC) miners are rallying on Monday after the largest cryptocurrency by market value continued to hold above $30,000 even as the mining industry is gearing up for upcoming halving that could cut mining rewards in half.

The shares of Bit Digital (BTBT), TeraWulf (WULF), Hut 8 (HUT) and CleanSpark (CLSK) rose more than 10%, outpacing their peers such as Marathon Digital (MARA), Riot Platforms (RIOT) and Hive Digital (HIVE) that rose between 5% and 9%. The only mining stock that fell, though, was Bitdeer (BTDR), which was down about 10% at press time.

  • Big Tech Comes to Small Town: A Bitcoin Mining Story in Spur
    Big Tech Comes to Small Town: A Bitcoin Mining Story in Spur
  • What's the Biggest Misconception People Have About Bitcoin Mining?
    What's the Biggest Misconception People Have About Bitcoin Mining?
  • What You Need to Know About the Bitcoin Halving
    What You Need to Know About the Bitcoin Halving
  • Bitcoin Miner Bitfarms Warns of Default
    Bitcoin Miner Bitfarms Warns of Default
  • The moves in mining shares generally outpace other crypto-related stocks as mining digital assets is their primary source of revenue. On Monday, other crypto-related stocks, such as Coinbase (COIN) and MicroStrategy (MSTR), were up less than 6%.

    The mining stocks have outpaced bitcoin's run this year, rebounding from their 2022 slump. The Valkyrie Bitcoin Miners ETF (WGMI), which tracks the performance of mining stocks, has doubled in price this year, while bitcoin has risen 87%.

    Trouble could loom ahead, though. The bitcoin halving – also known as the halvening – is slated to take place next year. The event will cut in half the reward for successfully mining a bitcoin block. This event takes place roughly every four years and is part of Bitcoin's code to reduce inflationary pressure on the cryptocurrency. Currently, rewards are 6.25 BTC per block or about $187,000 at the current spot price, and in April 2024 or so, they will be reduced to 3.125 BTC per block (approximately $93,000).

    Halving is generally considered negative for the mining industry, and investors are keenly focused on the event's impact on the miners, said B. Riley analyst Lucas Pipes. "We believe that the halving is, first and foremost, negative for the group. However, low-cost producers should fare better than high-cost producers and well-capitalized companies should fare better than levered ones," he wrote in a research note on Oct. 20.

    Miners are gearing up by either buying more-efficient mining machines or diversifying into alternative sources of income that could help keep them afloat post-halving. In fact, Bit Digital earlier announced that, like many of its peers, it is entering the artificial intelligence (AI) business, which will earn them enough cash flow to sustain their mining business, regardless of where the market is headed.

    Edited by Nick Baker.


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

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Aoyon Ashraf

    Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets