what happened
Cryptocurrency stocks struggled with a wider market this week, but even more than real cryptocurrencies. Bitcoin ((((BTC 0.64%).Not always.
This week, the stock of a Bitcoin mining company Riot blockchain ((((Riot -0.36%). As of Thursday’s closing price, it was down almost 8%.Share of large crypto exchanges Coinbase ((((coin 0.11%). Almost 7% decrease, BIT mining ((((BTCM -5.20%). It decreased by about 23%.
So what
In general, cryptocurrencies and crypto stocks are as struggling as many of the wider markets are. Investors are trying to digest and overcome all uncertainties, including high levels of inflation, the Fed’s expected interest rate hike, the Fed’s balance sheet shrinking, Russia’s invasion of Ukraine, and the possibility of a recession. All of these uncertainties made it difficult for equities and cryptocurrencies to gain some momentum.
There is often a correlation between crypto stocks and cryptocurrencies, but the current divergence seen this week is not a complete shock, said DataTrek co-founder Nicholas Chorus. The Wall Street Journal. He added that the way real assets are valued is different from that of a company.
Image Source: Getty Images.
Coinbase has hit a new low this week as analysts have significantly lowered their quarterly quotes and price targets. JP Morgan Chase Analyst Kenneth Worsington recently lowered its share price target from $ 296 to $ 258 per share. Still, it means that Coinbase’s current share price has risen significantly from about $ 122.70. Worthington also reduced Coinbase’s first-quarter earnings estimate per share from a loss of $ 0.12 to a loss of $ 0.27. Much of Coinbase’s business is based on the crypto trading volume we know. Became weak In the first quarter of this year as investors lost their enthusiasm.
“The crypto market needs some excitement,” Warsington said in order to increase crypto prices and trading volumes. Barron’s..
When it comes to cryptominers, they are “in many ways different animals,” according to DA Davidson analyst Chris Blendler. The Wall Street Journal.. Their business involves manipulating a lot of potentially expensive hardware to solve crypto puzzles as quickly as possible for humans to create new tokens. Investors may be worried about how these miners buy new equipment.
Not long ago, many miners, including Riot, submitted a shelf registration to the Securities and Exchange Commission to sell up to $ 500 million worth of shares. Shelving registration provides the flexibility for these miners to sell their stocks, which may not happen immediately, but mining stocks haven’t worked well since the news was announced. Hmm.
Also, it seems very unlikely, but if Bitcoin switches from the current energy-intensive concept of proof of work mining to proof of stake, it could be a big problem for cryptocurrency miners. there is. In Proof of Stake, users bet tokens on a particular cryptocurrency, become validators for that network, approve transactions and create new tokens.Many cryptocurrencies including Ethereum, Moving to Proof of Stake. In New York, state legislators also recently proposed a bill that would impose a two-year moratorium on proof of work mining.
So
Given how much some of these Bitcoin mining stocks have been defeated, there may be an upside given that at least some of the economic uncertainty may have been priced. Maybe. For energy efficiency issues.
I’m more bullish on companies like Coinbase. Coinbase faces short-term pressure, but it can be a huge beneficiary in the long run. Cryptography Recruitment and investment will become more prevalent among Wall Street and private investors.
