Public Crypto Mining Firms Dropped Double Digits After Bitcoin’s Largest Decline in Four Months

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By BitcoinWiki News

Key Takeaways:

– BTC experienced significant decline
– Value plummeted to as low as $40,000
– Ripple effect on mining industry
– Mining companies saw double-digit stock price drops
– TeraWulf (NASDAQ: WULF) tumbled 23.5%
– Bit Digital (NASDAQ: BTBT) declined 19.7%
– Marathon Digital (NASDAQ: MARA) dropped 15.2%
– Riot Platforms (NASDAQ: RIOT) saw 14.5% decrease
– Bitcoin halving set to occur in 2024
– Concerns about lower profit margins for mining companies
– Late weekend drop in Bitcoin’s price suggests reduced liquidity
– Funding rates of perpetual futures contracts dropped below 0.1%
– Bitcoin crash indicates deleveraging
– Market rally driven by regulatory approval expectations
– Anticipation of Federal Reserve cutting interest rates in 2024
– Richard Galvin attributes fall to market deleveraging


1. Bitcoin’s Price Decline Impact on Mining Companies
– Bitcoin’s significant price decline led to double-digit drops in the stock prices of various mining companies, including TeraWulf, Bit Digital, Marathon Digital, and Riot Platforms.
– The leveraged nature of mining operations exacerbated the losses for these firms, as they generate Bitcoin through mining activities and hold Bitcoin on their balance sheets.

2. Concerns about Bitcoin’s Upcoming Halving
– Investors are worried about the upcoming halving event in 2024, during which miners will receive only half the number of Bitcoins per block as before, leading to lower profit margins for mining companies.

3. Reasons for Bitcoin’s Price Decline
– The sudden drop in Bitcoin’s price occurred late in the weekend, potentially related to funding rates of perpetual futures contracts, market leverage, and deleveraging.
– The decline may not have been caused by a specific fundamental news catalyst, but rather a market deleveraging phenomenon.

4. Factors Contributing to Bitcoin’s Rally
– Bitcoin’s rally in the market this year has been driven by expectations of regulatory approval for the first US exchange-traded funds investing in the cryptocurrency and bets on the Federal Reserve cutting interest rates in 2024.

5. Expert Opinion
– Richard Galvin of Digital Asset Capital Management in Sydney attributes the recent fall in Bitcoin’s price to market deleveraging rather than a specific fundamental news catalyst.

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