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Hive Digital, Hut 8 lead bitcoin miner stock selloff while Iris Energy rallies

Hive Digital, Hut 8 lead bitcoin miner stock selloff while Iris Energy rallies

The BlockThe Block2024/06/11 17:34
By:Jason Shubnell

Mining stocks are falling with bitcoin, with Hive Digital and Hut 8 down 8%.Iris Energy is the lone outperformer, trading higher by 10%.

The selloff in bitcoin mirrored the drop in U.S. equity markets in Tuesday’s trading session, and bitcoin miners are getting hit particularly hard.

The U.S. Federal Reserve kicked off its two-day policy meeting, which will conclude Wednesday afternoon with a press conference from Fed Chairman Jerome Powell. Expectations have lessened in recent weeks regarding the possibility of the Fed cutting interest rates on Wednesday or even this year.

“We see diminished prospects for easing this year, and now expect the first Fed cut only in November,” JPMorgan equity strategist Marko Kolanovic wrote following last week’s stronger-than-expected May jobs report.

The drop in bitcoin has accelerated as trading continues, with the world’s largest crypto by market cap down 5.5% to $66,196.38 over the past 24 hours, according to The Block’s bitcoin price data .

Among bitcoin mining stocks, Hive Digital Technologies (HIVE) leads the way, with its stock down 8.3% at publication time, according to Yahoo Finance. That’s followed by shares of Hut 8 (HUT), Cleanspark (CLSK), Riot Platforms (RIOT) and Marathon Digital (MARA), all down more than 5%.

MicroStrategy (MSTR), a data and software company that has transformed itself into primarily a bitcoin holding company due to its large BTC position, is also feeling the pain by dropping 6%. MicroStrategy holds 214,278 bitcoins valued at about $5 billion.

As the price falls, open interest in bitcoin has increased to over $1.5 billion, according to one analyst,  indicating a “high-risk situation.”

Interestingly, shares of Iris Energy (IREN) are holding up well, trading higher by 10%. The stock is up nearly 130% over the past month.

Last week, bitcoin miner Core Scientific (CORZ) signed a series of 12-year contracts with AI Hyperscaler CoreWeave expected to generate a cumulative revenue of $3.5 billion. According to JPMorgan analysts, this is good news for Iris Energy , which was early to embrace high-performance computing.

"With immediate power access in relatively short supply, Hyperscalers and AI firms are exploring alternatives, including leasing power/datacenter capacity from (or outright acquiring) bitcoin miners,” analysts wrote in a June 5 research note. “We estimate U.S. listed miners alone draw up to 5GW of power, and have access to another 2.5 GW through power purchase agreements, which make them a potentially attractive target."


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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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