Arcane Research: Shares of mining companies have fallen by 50% since the beginning of the year

Analysts from the Arcane Research agency believe that against the background of the fall of the bitcoin market and the growth of the hashrate, mining companies have reduced the volume of BTC production.

Analyst Jaran Mellerud tweeted that the top five mining companies by market capitalization are falling, with over 50% losses since the start of the year.

An Arcane Research expert clarified that the mining company Riot Blockchain suffered the most from Bitcoin volatility. Its losses since the beginning of the year amounted to 65%. Competitors are not far behind. Hut8 shares are down 63% and Marathon Digital Holdings are down 62%.

Mellerud sees the reason miners are losing money because most cryptocurrency mining companies own bitcoin, which means they are heavily influenced by the value of BTC. An Arcane Research analyst noted that the fall of bitcoin led to a decrease in the income of mining companies and could cause a decrease in the global hash rate. However, this did not happen. On the contrary, now in 2022 there is a new historical maximum of the bitcoin hashrate. Mellerud believes that the fall in BTC and the rise in the global hash rate forced companies to mine less bitcoin:

“Most of these companies have not increased their hashrate as quickly as investors hoped. Therefore, investors may have adjusted their growth assumptions for these companies to be more conservative.”

In May, the American mining company Marathon Digital recorded revenue growth in the first quarter of 2022. However, large-scale investments in the development and depreciation of BTC led to losses of $ 13 million. At the same time, Arcane Research stated in March that large mining companies significantly increased the rate of accumulation of bitcoin. In April, the American mining company Riot Blockchain announced plans for a massive expansion in Navarro County, Texas.