Bitcoin mining stocks drop 22% as market struggles continue

Bitcoin (CRYPTO:BTC) mining stocks declined by 22% in February as falling cryptocurrency prices and the upcoming halving event put pressure on mining operations, according to a JPMorgan research note.

Mining companies, including Riot Platforms, Bitdeer, Marathon Digital, and Core Scientific, all saw stock price declines after releasing their fourth-quarter 2024 earnings.

Despite some firms reporting better-than-expected revenue, investors reacted negatively to the overall market conditions.

The upcoming Bitcoin halving in April will cut mining rewards from 6.25 BTC to 3.125 BTC per block, further straining miners’ profitability.

JPMorgan analysts noted that since the halving was announced, mining revenues have fallen by an average of 46%, while gross profits have declined by 57%.

The broader economic environment has also contributed to market uncertainty.

US President Donald Trump's announcement of 25% tariffs on Canada and Mexico in January has led to concerns about a potential trade war, affecting financial markets, including Bitcoin.

Some Bitcoin mining companies have diversified by leasing high-performance computing (HPC) power to artificial intelligence firms or selling specialised ASIC microchips.

However, even those with AI-related business lines are facing challenges.

“Operators with HPC exposure also felt pressure following the DeepSeek announcement and questions around near-term demand for data center capacity,” JPMorgan analysts wrote.

In January, Chinese AI firm DeepSeek claimed its AI models could rival those of US companies like OpenAI’s ChatGPT at a significantly lower cost.

This announcement caused AI-related stocks to decline, adding further uncertainty to mining firms with AI exposure.

Despite these difficulties, some mining stocks with AI integration, such as Hut 8, continue to be valued higher than their peers, JPMorgan noted.

At the time of reporting, the Bitcoin (BTC) price was $86,918.48.