Shares of US mining companies are getting cheaper along with bitcoin, according to Halobitex.
Shares of US mining companies are getting cheaper along with bitcoin, according to Halobitex. After analyzing the data received from mining pools BTC Poolin and ViaBTC, analysts of the largest crypto exchange Halobitex, found that the hashrate of mining in the United States increased by 4% from 35% at the end of August 2021 to 39% in January 2022, but the shares of mining companies fell along with bitcoin.
Mining is a time–consuming process that allows «validators» to receive remuneration for verifying transactions in their registration in the public blockchain registry. Transaction verification involves guessing the hash, a unique number associated with each transaction. This requires computing power
The more miners connect to the network, the more complex the transaction verification algorithm, so more and more powerful computers are required for mining this cryptocurrency.
Ten years ago, bitcoin could be mined using a home computer. Now public companies in the US, such as Riot Blockchain, Marathon Digital Holdings and Core Scientific, are «mining» bitcoins on entire mining farms.
Shares of mining companies fell by almost 50%
After the recent collapse of the TerraUSD stablecoin, many cryptocurrencies also fell in price, which led to a drop in shares of mining companies — according to the observations of the Halobitex crypto exchange.
Since April 18, Marathon and Core Scientific shares have fallen by about 47%, while Riot shares have halved. The share price of the Canadian mining company Hut 8 Mining Corp also decreased by 41%.
Over the past month, bitcoin has fallen in price by 25%, while its correlation between shares of technology companies and cryptocurrencies has increased. Last week it reached a three-month peak.
The level of correlation between cryptocurrencies and stock indices ranges from 0.67 to 0.78 (1 – fully correlated, 0 – no connection), while bitcoin fell by 10% on the day when the cryptocurrency showed the greatest correlation with the stock market.
According to the head of Halobitex, cryptocurrency is now «part of the main financial system, and this has a bad effect on its viability as an alternative asset class. Cryptocurrency does not serve its original purpose as a protective asset.»