The US has become the dominant country for crypto mining, but that dominance isn’t reflected in the crypto mining stocks, which continue to perform poorly as the market plunges, Barrons reported.
The Cambridge Bitcoin Electricity Consumption Index (CBECI) had revealed that the US accounts for around 38% of the global Bitcoin hash rate in January 2022; much of this progress is owed to China’s outright ban on crypto mining in May 2021.
This ban led to crypto miners flocking to the US. However, the growth isn’t doing much for shares of crypto mining companies in the country.
Crypto miner stocks are down
Marathon Digital Holdings (MARA), the largest publicly listed crypto mining company, has seen the value of its stock drop from as high as $32.89 to the current $11.09.
This month alone, the value has dropped by 46.94%, while its value has declined by 66.28% on the year-to-date metric.
Riot Blockchain Inc (RIOT) has also lost 66.49% YTD and currently trades at $7.26, shedding $15.12 since the year started. However, it has recorded positive performance recently. Its value increased by 7.78% in the last five days and has gained 5.98% today alone.
The same goes for Core Scientific (CORZ). The crypto miner has lost 61.94% YTD and almost half of its value this month alone. The stock is currently trading at $3.97 on NASDAQ after gaining 3.12% today.
Explaining the decline
The massive drop in the value of these crypto mining firms throughout the year, especially in the last 30 days, can be tied to the enormous sell-off the market witnessed recently. Since most of these miners hold Bitcoin on their balance sheets, their stocks tend to move in correlation with the crypto market’s direction.
Apart from that, concerns about the environmental impact of Bitcoin mining could also be said to be affecting their businesses. New York recently passed a two-year moratorium on crypto mining, plus there was a recent campaign for Bitcoin to pivot to the proof of stake consensus that consumes less energy.
While Bitcoin’s price is steadily holding firm around the $30k range, fears of an increase in rates by the Fed to battle against rising inflation could lead to another streak of red candles.