Why Bitcoin Mining Stocks Plunged on Tuesday

Motley Fool2022-09-14

What happenedThe news couldn't have been much worse for Bitcoin (BTC -8.99%) and cryptocurrencies today. Inflation in the U.S. came in higher than expected at 0.1% last month, with core inflation up ...

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Comments

runningjames
2022-09-14
runningjames
Test 18k soon
4West
2022-09-14
4West
who or what is sustaining crypto?
Singmeamelodyy
2022-09-14
Singmeamelodyy
Ik
BCH Jason
2022-09-14
BCH Jason
Only 21 million Bitcoin in a $100 trillion economy
LEESIMON
2022-09-14
LEESIMON
ok
LEESIMON
2022-09-14
LEESIMON
ok

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Inflation in the U.S. came in higher than expected at 0.1% last month, with core inflation up ...</p>\n\n<a href=\"https://www.fool.com/investing/2022/09/13/why-bitcoin-mining-stocks-plunged-on-tuesday/\">Source Link</a>\n\n</div>\n","source":"fool_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Why Bitcoin Mining Stocks Plunged on Tuesday</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhy Bitcoin Mining Stocks Plunged on Tuesday\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-09-14 11:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2022/09/13/why-bitcoin-mining-stocks-plunged-on-tuesday/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>What happenedThe news couldn't have been much worse for Bitcoin (BTC -8.99%) and cryptocurrencies today. Inflation in the U.S. came in higher than expected at 0.1% last month, with core inflation up ...</p>\n\n<a href=\"https://www.fool.com/investing/2022/09/13/why-bitcoin-mining-stocks-plunged-on-tuesday/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"RIOT","symbol_name":"Riot Platforms","start_time":0,"source_url":"https://www.fool.com/investing/2022/09/13/why-bitcoin-mining-stocks-plunged-on-tuesday/","article_id":"2267684485","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2267684485","pubTimestamp":1663125175,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"A sharp drop in Bitcoin has extended to miners, too.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"RIOT":"Riot Platforms","MARA":"Marathon Digital Holdings Inc"},"translate_title":"比特币挖矿股周二为何大跌","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"MARA":0.9,"RIOT":0.9},"content_text":"What happenedThe news couldn't have been much worse for Bitcoin (BTC -8.99%) and cryptocurrencies today. Inflation in the U.S. came in higher than expected at 0.1% last month, with core inflation up 0.6%. This was despite investors thinking that inflation may be slowing, which could have opened the door to the Federal Reserve slowing its pace of interest rate increases.Shares of Bitcoin-related stocks were trading lower on Tuesday. Riot Blockchain  was down as much as 9.92%, Bitfarms  had fallen 11.35%, Marathon Digital  dropped 11.16%, HIVE Blockchain Technologies  declined 11.3%, and Hut 8 Mining  fell as much as 15.42%%.So whatBitcoin is down 9.9% as I'm writing to $20,245, which seems bad, but the cryptocurrency is still up 7.4% over the past week. But when Bitcoin drops rapidly, it can often cause Bitcoin mining and related stocks to drop dramatically as well. This happens for two reasons.First, Bitcoin miners are generating Bitcoin as revenue, so when the value of Bitcoin drops, their revenue effectively does as well. Second, these companies often hold significant Bitcoin reserves on their balance sheets, so a drop in Bitcoin actually means a loss in value on the balance sheet as well.As all of this is happening, Ethereum (ETH -6.31%) is moving quickly toward The Merge in the next day or so, which will give the cryptocurrency significant advantages over Bitcoin. The Ethereum blockchain won't be as energy intensive as Bitcoin's and has the smart contract capability that Bitcoin can't compete with. There are a lot of investors who think this will shift value from Bitcoin to Ethereum.We have already seen miners on Ethereum's proof-of-work blockchain suffer because they'll have no work to do after The Merge's move to proof of stake. That's the macro trend of all cryptocurrencies, and Bitcoin doesn't have an answer to lower energy usage right now.Now whatBitcoin, in particular, was supposed to be a hedge against inflation. But that hasn't been the case for at least a year now, and the cryptocurrency trades more like a speculative asset than an inflation hedge.What I would be worried about for Bitcoin miners is a continued decline in Bitcoin's price after The Merge. Ethereum is a compelling alternative with much more functionality as a form of payment and innovation than Bitcoin. And with the focus on energy usage and environmental impact across the technology industry, the more than 99% reduction in energy usage after The Merge will be compelling.I don't think Bitcoin miners have a great business model in today's market, and that's what keeping me out of these stocks. They're mainly playing arbitrage against the price of Bitcoin and the cost of mining a Bitcoin. If that arbitrage goes to zero, the entire business model falls apart quickly and once-solid balance sheets could become a liability.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9935781319,"gmtCreate":1663136975031,"gmtModify":1676537212282,"author":{"id":"4117336023184202","authorId":"4117336023184202","authorIdStr":"4117336023184202","name":"runningjames","avatar":"https://community-static.tradeup.com/news/3467c93ce8ec8c583f28f405e68f0c00","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":2,"crmLevelSwitch":1,"idStr":"4117336023184202"},"htmlText":"Test 18k soon","listText":"Test 18k soon","text":"Test 18k soon","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9935781319","repostId":2267684485,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9935710005,"gmtCreate":1663134395307,"gmtModify":1676537211761,"author":{"id":"4112575701443832","authorId":"4112575701443832","authorIdStr":"4112575701443832","name":"4West","avatar":"https://community-static.tradeup.com/news/4f1621f91b85bb6814f52425dfbe6add","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"4112575701443832"},"htmlText":"who or what is sustaining crypto?","listText":"who or what is sustaining crypto?","text":"who or what is sustaining crypto?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9935710005","repostId":2267684485,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9935709829,"gmtCreate":1663129592361,"gmtModify":1676537210743,"author":{"id":"4112236528991632","authorId":"4112236528991632","authorIdStr":"4112236528991632","name":"Singmeamelodyy","avatar":"https://community-static.tradeup.com/news/bd6f4b2042c573a893dce45a93a107fb","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"4112236528991632"},"htmlText":"Ik","listText":"Ik","text":"Ik","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9935709829","repostId":2267684485,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9935449440,"gmtCreate":1663126927380,"gmtModify":1676537210024,"author":{"id":"4124184681152162","authorId":"4124184681152162","authorIdStr":"4124184681152162","name":"BCH Jason","avatar":"https://community-static.tradeup.com/news/e00a152c8f098c9d9fdea6d9ef08e05b","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"4124184681152162"},"htmlText":"Only 21 million Bitcoin in a $100 trillion economy&nbsp;","listText":"Only 21 million Bitcoin in a $100 trillion economy&nbsp;","text":"Only 21 million Bitcoin in a $100 trillion economy","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9935449440","repostId":2267684485,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9935449009,"gmtCreate":1663126777901,"gmtModify":1676537210001,"author":{"id":"3579044609497336","authorId":"3579044609497336","authorIdStr":"3579044609497336","name":"LEESIMON","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":8,"crmLevelSwitch":1,"idStr":"3579044609497336"},"htmlText":"ok","listText":"ok","text":"ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9935449009","repostId":2267684485,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9935440785,"gmtCreate":1663126747347,"gmtModify":1676537210001,"author":{"id":"3579044609497336","authorId":"3579044609497336","authorIdStr":"3579044609497336","name":"LEESIMON","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":8,"crmLevelSwitch":1,"idStr":"3579044609497336"},"htmlText":"ok","listText":"ok","text":"ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9935440785","repostId":2267684485,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":44,"commentSize":8,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; 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