The cryptocurrency market is currently confusing within the crypto community due to ongoing discussions regarding the spot Bitcoin Exchange Traded Fund (ETF). Following this talk, Bitcoin mining shares have experienced significant growth in the last 30 days. Surprisingly, the shares of BTC mining have outperformed Bitcoin during this period.
Bitcoin mining shares outperform BTC in the last 30 days
Currently, BTC is trading near the $44,000 level, and in the last 24 hours, it has experienced an impressive 2% upside momentum due to the ongoing conversation. However, when we examine BTC’s performance over the last 30 days, the price has shown a better return of around 17%.
On the other hand, BTC mining shares, including Marathon Digital Holdings (MARA), Bitfarms Ltd. (BITF), CleanSpark (CLSK), and Mawson Infrastructure Group (MIGI), have risen more than 150% in the last 30 days. Other mining shares such as BitDigital (BTBT) and Riots Platforms (RIOT) have also seen a 50% increase in the last 30 trading days.
This surge in mining shares has not only outperformed BTC but also many crypto-related stocks like Coinbase (COIN) and MicroStrategy (MSTR). In the last 30 days, COIN (48%) and MSTR (17%) have performed well, but not as impressively as BTC mining shares.
Mining stocks have performed better than Bitcoin this year, rebounding from a slump in 2022. The Valkyrie Bitcoin Miners ETF (WGMI), which tracks mining stocks, has doubled in price, while Bitcoin has seen a 160% increase.
Upcoming BTC halving and its impact on mining shares
Concerns are emerging as the bitcoin halving, scheduled for next year, approaches. This event, occurring approximately every four years, involves a 50% reduction in the reward for successfully mining a Bitcoin block. Currently, miners receive 6.25 BTC per block, valued at around $187,000 at the current spot price. By April 2024, this reward will be halved to 3.125 BTC per block, approximately $93,000.
The halving is a built-in mechanism in Bitcoin’s code designed to mitigate inflationary pressures on the cryptocurrency. Analysts, such as B. Riley’s Lucas Pipes, perceive the upcoming halving as generally negative for the mining industry. In his research note on October 20, Pipes highlighted that the impact will likely vary, with low-cost producers expected to fare better than high-cost producers.
Additionally, well-capitalized companies are anticipated to navigate the challenges more effectively than leveraged ones. Investors are closely monitoring these dynamics to gauge the overall impact on the mining sector.
