- Riot Platforms and Marathon Digital lost 15% resp. 12%
- In December, fees were extremely high, they have since dropped
- Over 97% of miner revenue stemmed from block rewards in 2023
On Jan. 11, Bitcoin mining stock reversed earlier gains as the Bitcoin price retreated in volatile trading after the US Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs), NBC Chicago reported.
Riot Platforms and Marathon Digital, the two biggest mining stocks, lost 15% and 12%, respectively. CleanSpark fell 7% and Iris Energy lost 6%.
After Bitcoin briefly passed $49,000 for the first time in two years, investors pounced to take profit. The oldest crypto is currently changing hands for just over $46,000.
Bitcoin miners were 2023’s biggest gainers
In 2023, Bitcoin mining companies were among the biggest gainers in the stock market. Mining stocks surged by 226% compared to Bitcoin's 166% according to an analysis by Bankless Times.
Public mining companies in particular took decisive action. Hut 8 Mining became the US's third-largest publicly traded mining company after raising its hash rate to 9.8 EH/s. CleanSpark invested $9.3 million to raise its hash rate by nearly 1 EH/s. Marathon Digital Holdings was the undisputed champion of the year with impressive revenue growth of 391%.
Lower transaction fees mean lower revenue
Another reason Bitcoin miner revenue is down involves lower Bitcoin transaction fees, according to data from CryptoQuant cited by NBC Chicago. In December 2023, fees were extremely high because there were a lot of transactions on the Bitcoin blockchain, on which activity has since cooled.
Block rewards determine 2024 prospects
Stakeholders are also preparing for the upcoming Bitcoin halving, when the mining rewards will drop by 50%. Another study by Bankless Times showed that over 97% of miner revenue stemmed from block rewards in 2023. In mid-December, the reward per block was 6.25 BTC.
The halving, expected to take place sometime in April, historically precedes a windfall for Bitcoin investors. Additionally, this event could push marginal miners out of the market, freeing up space for more profitable and sustainable companies.
Contributors
