This week has proven challenging for publicly traded companies focused on mining Bitcoin (BTC). Shares of these firms have broadly declined as the original cryptocurrency has struggled, falling below the significant $90,000 mark. The combination of larger losses and increased competition resulted in one company’s stock price plummeting nearly 30% in a single trading day.
Even the leading entities in the sector were not immune to the downturn. The index that monitors the performance of Bitcoin mining stocks has slumped to levels unseen since September of last year.
Cipher Mining Inc. (NASDAQ: CIFR) saw its stock value decrease, even after announcing net earnings of $18 million for the fourth quarter, which translates to $0.05 per diluted share. Adjusted earnings for Cipher Mining reached $51 million, or $0.14 per diluted share. However, investor sentiment appeared to be driven more by worries about long-term profitability. These concerns stem from the impact of Bitcoin’s fluctuating price on the overall economics of mining operations.
Tyler Page, CEO of of Ciper Mining
Tyler Page, CEO of Cipher Mining, stated, “Cipher had a remarkably fruitful fourth quarter, characterized by the punctual execution of our expansion strategy.” He also highlighted the increase in the company’s hashrate to about 13.5 EH/s following upgrades to their Odessa facilities.
However, the bottom line is the key point of interest for shareholders, and the latest results fell short of the previous year’s performance. The company’s losses widened significantly, reaching almost $45 million, an increase from the nearly $26 million reported a year ago.
Bitdeer Technologies Group (NASDAQ: BTDR), a blockchain and high-performance computing firm based in Singapore, experienced even sharper declines following the release of disappointing financial figures. The company’s net loss for 2024 was a substantial $599.2 million, a considerable increase from the $56.7 million loss the previous year. Overall revenue also declined, from $368.5 million to $349.8 million year-over-year.
Matt Kong, Chief Business Officer at Bitdeer
Matt Kong, Chief Business Officer at Bitdeer, explained, “During the past year, our primary focus was on allocating resources to developing our unique ASIC technology, which had a temporary restrictive effect on our hashrate expansion, and therefore impacted our financial results.”
Wall Street Reacts: Mining Stocks Fall in Response to Earnings and Bitcoin’s Price
Investors reacted sharply to the news. Bitdeer shares experienced a 29% drop on the Nasdaq exchange during Tuesday’s trading, closing at $9.26 and reaching their lowest valuation in three months. Cipher Mining’s stock also fell more than 17% following its most recent report, dropping to $4.10 and marking a four-month low.
BITDR vs. CIFR vs. BTC price. Source: Tradingview.com
The downturn impacted the entire sector, affecting not just those companies reporting recent earnings data. As an example, MARA (NASDAQ: MARA), the largest publicly traded Bitcoin miner on Wall Street based on market capitalization, saw its shares decline by 11% to $12.42, the lowest they have been since November 2023.
Among the companies seeing the most severe declines were Canaan (NASDAQ: CAN), which fell by 17% to $1.29, and IREN (NASDAQ: IREN), which dropped 13.6% to $8.78.
This negative market sentiment was partly due to the recent sharp drop in Bitcoin ‘s value over the last two days. Its price closed well below $90,000 on Tuesday, even briefly testing levels closer to $86,000, representing its lowest point since November of the previous year.
The Hashrate Bitcoin Mining Stock Index also experienced a substantial fall, reaching its lowest value in five months.
Source: Hashrate Index
Riot Platforms (NASDAQ: RIOT) is another notable instance, as they also announced their financial results this week. Riot reported a record revenue of almost $377 million alongside net income of $109 million. In spite of these positive figures, shareholders’ focus remained on Bitcoin’s overall performance, resulting in the stock price declining to multi-month lows.
This situation underscores the prevailing trend: for many investors, mining stocks are still perceived as an indirect method to access the Bitcoin market through regulated exchanges. As such, their prices tend to mirror and closely follow Bitcoin’s price movements.
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