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As the much-anticipated Bitcoin halving approaches, the mining sector is facing a recession, with stock prices plummeting despite top executives maintaining an optimistic outlook.
Bitcoin miners face market turmoil.
The impending Bitcoin halving event, which will reduce mining rewards from 900 to 450 tokens per day, has shaken the mining industry. Big names like Marathon Digital Holdings Inc., Riot Platforms Inc., and CleanSpark Inc. have seen their stock prices fall for three consecutive days this month, with the Valkyrie Bitcoin Miners ETF down about 28%.
Moreover, current geopolitical tensions, especially the conflict between Iran and Israel, are heightening the industry's difficulties, reducing people's interest in it and accelerating the decline in stock prices.
CEO Insights on Long-Term Viability
Despite the current volatility, mining industry executives remain optimistic about the sector's prospects.
“Riot is in this for the long term,” Jason Les, CEO of Riot Platforms, said in a recent interview with Bloomberg Television. He also emphasized, “Our long-term investment thesis for Bitcoin is strong and we believe we are poised for a very positive move in Bitcoin over the coming months.”
Similarly, Tyler Page, CEO of Cipher Mining, said: “I think it is very difficult to predict the price of Bitcoin in any kind of short-term frame. However, we have seen a steady adoption process over the years.”
Bernstein's Industry Forecast
With just two days left before the fourth Bitcoin halving will significantly reduce mining rewards, Bitcoin miners are confident that only increased demand and adoption of new spot ETFs can offset the impact of the halving.
Bernstein analysts Gautam Chhugani and Mahika Sapra noted the strong performance of spot Bitcoin and exchange-traded funds, which have shifted “retail liquidity” away from mining stocks. CEOs interviewed by Bernstein emphasized that despite the halving, miner dollar profits were at record highs, providing a solid cushion. They also noted that low debt levels on the balance sheet could help overcome declining compensation.
Expected declines in miner rewards have also sparked discussions about potential industry consolidation.