The stock prices of some of the major publicly listed BTC mining businesses are plummeting as the overall crypto market falls.
Following BTC’s price decline in 2022, mining stocks have continued to decline, with Riot Blockchain being the greatest loss.
It was revealed on Wednesday (May 11, 2022) by Arcane Research analyst Jaran Mellerud, that five of the major mining firms by market capitalization had lost more than 50% of their value over the last year.
Marathon Digital Holdings has lost 62% of its value this year, whereas Hut8 has gained 63%. At 65 percent, Arcane Research found that Riot had the worst YTD loss in the industry.
Due in part to the fact that most of the crypto mining businesses own bitcoin, their value is directly correlated to that of the currency itself, Mellerud explains. As of November 20, 2021, Bitcoin has lost more than 60% of its value from its all-time high. With a drop of $14,000 in the last week or so, BTC is presently battling around $26,000 per coin.
As a result of the decline in the BTC price, mining companies have seen their profits drop. Even while a decline in the worldwide hash rate might have been caused by a drop in the price of bitcoin, Mellerud pointed out that the scenario would be different in 2022. The hash rate just reached an all-time high, as was previously reported.
BTC’s price decline and increased worldwide hashrate have led to a decrease in the amount of bitcoin being mined, according to the expert. Mellerud went on to say:
“Investors had hoped for faster increases in the hashrate of most of these firms. It’s possible that investors have shifted their growth expectations for these firms to more cautious territory.”
Consolidation-Incentives Institutions Will Be Attracted to Hive
Crypto mining company Hive Blockchain, meanwhile, has revealed intentions to combine its common shares five times over the course of the next several months. By reducing the number of common shares in issue and outstanding from 411,209,923 to 82,241,984, the company’s share price is expected to rise, according to a news statement.
It’s believed that the stock consolidation would bring in more institutional investment. “Frank Holmes, the executive chairman of Hive, issued a statement saying:
To put it another way, even while HIVE has a bigger market capitalization than many of our rivals — and superior fundamental metrics, such as Price/Earnings and revenue per employee — the increased share price generates more institutional visibility since many of their fundamental screens exclude firms below $5 a share. “
Consolidated common shares are planned to commence trading on both the TSX and Nasdaq exchanges by May 20, 2022, after regulatory clearance. Earlier last month, Hive agreed to acquire additional ASIC mining processors from Intel.