Bitcoin Miners Sell Amid Hashrate Decline, Opportunity to Buy Bitcoin Mining Stocks

• Bitcoin miners offloaded approximately 10,600 Bitcoins (BTC) in the last 24 hours, valued at around $455.8 million.
• Brokerage firm Bernstein suggests that the recent downturn in Bitcoin mining stocks presents a buying opportunity.

In the midst of Bitcoin maintaining a stable price around $42,500, a surprising trend has emerged as Bitcoin miners are reportedly engaging in substantial selling activities. The possible catalyst behind this surge in selling is a recent sharp decline in the BTC hashrate, impacting the profitability of miners.

Crypto analyst Ali Martinez has shed light on this noteworthy shift in behavior among Bitcoin miners, emphasizing an uptick in selling activity. According to data sourced from @cryptoquant_com, miners have unloaded approximately 10,600 Bitcoins (BTC) in the last 24 hours, translating to an estimated value of around $455.8 million. This surge in selling by BTC miners signals a dynamic response in the market, and the significant volume involved underscores a consequential development in the cryptocurrency landscape.

The decline in Bitcoin’s hashrate has reached its lowest point in months, a situation attributed to miners redirecting power back to the grid amid severe winter storms sweeping across the USA. This strategic move aims to prioritize essential services, ensuring hospitals have sufficient electricity to save lives and families can withstand the harsh weather conditions.

As one of the world’s most effective grid balancing tools, Bitcoin’s network hashrate has experienced a notable 34% decrease since last Friday. The decline, from a peak of 629 EH/s to a low of 414 EH/s, is a result of electricity usage restrictions imposed by ERCOT (Electric Reliability Council of Texas) for businesses due to adverse cold weather conditions. This combination of factors underscores the dynamic nature of the cryptocurrency market and its responsiveness to external influences.

Bernstein – Time To Buy Bitcoin Mining Companies

Bitcoin (BTC) mining stocks have experienced a recent downturn, but brokerage firm Bernstein suggests that this weakness could be an opportune moment for potential buyers. In a research report on Monday, the firm pointed out that despite underperformance, the current dip in mining stocks could serve as a buying opportunity in the near term.

The approval of spot Bitcoin exchange-traded funds (ETFs) has posed challenges for mining stocks, facing headwinds due to “lower investor appetite to use them as a proxy” and a weaker BTC price, leading to further underperformance, according to the report. The Valkyrie Bitcoin Miners ETF (WGMI), which invests in publicly traded Bitcoin mining stocks, has seen a nearly 38% decline this year, in contrast to the relatively flat performance of the Bitcoin price and broader equity markets.

Analysts Gautam Chhugani and Mahika Sapra noted that this underperformance in mining stocks may offer a strategic buying opportunity in the coming months. They highlighted the potential for a “higher beta trade” as the mining stocks respond to the next inflection point in the Bitcoin price. While the report suggests a possible short-term weakness in Bitcoin, with a projected range of $38,000-$42,000, it advises investors to be “structurally long” ahead of the next halving event expected in April.

In a separate note on Wednesday, Bernstein reiterated its bullish stance on mining stocks and recommended achieving Bitcoin exposure through miners that offer a “higher-beta than Bitcoin.” The brokerage firm expressed a preference for outperform-rated stocks Riot Platforms (RIOT) and CleanSpark (CLSK).

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