- Bitcoin is down 13% in the past 24 hours, extending a downtrend that has lost nearly 30% of its value in the past seven days
- The massive sell-off was felt by bitcoin mining companies, whose shares fell
Terra’s collapsing ecosystem has been the biggest headline in the crypto space, but it’s not the only crypto company to be impacted by the market downturn. Its native token LUNA collapsed after sustained losses totaling 98% over the past 24 hours. Its related stable, coinTerraUSD, has suffered a similar fate – down to $0.4711 against the dollar.
Bitcoin is doing badly itself, but is much better than Ethereum and many other altcoins. The flagship fell below $28,000 today – a low it hasn’t seen since December 2020. Notably, the recent bearish wave was much more intense than previous downtrends printed this year.
Bitcoin mining company stocks have also taken a hit
The majority of bitcoin mining stocks have underperformed the asset itself, and by a fair margin, Arcane Research’s Jaran Mellerud announced on Wednesday. In a series of tweets, the analyst also pointed out that the five largest mining stocks (by market cap) are down more than 50% since the turn of the year.
“The biggest loser is Riot, which is down 65% year-to-date. Marathon follows with a loss of 63%.” he wrote. “If we include the top ten public bitcoin mining companies, CleanSpark is the best performer, down 41%.”
Part of the factors that lead to the losses is their direct exposure to market volatility – falls in asset prices impact their earnings. These crypto mining companies have made significant direct investments by holding the asset that is currently bleeding.
“Increasing global hashrate and falling BTC price has resulted in less BTC being mined for these companies and a lower USD-denominated value of their mined BTC.”
In stark contrast to the historical trend, this year’s BTC price drop did not result in a decrease in the global hash rate. Finally, the Arcane researcher cited the relatively slower growth of hashrate by corporations as another factor. He observed that investors in these companies expected faster hashrate growth, which was not the case.
Source: Crypto News Deutsch