FameEX Hot Topics | Bitcoin Soars, But Mining Stocks Struggle to Match 2024 Gains

Bitcoin has posted an impressive 113% return in 2024 as of December 24, but many Bitcoin miners’ stocks have failed to benefit from this surge, with most ending the year in the negative. Despite Bitcoin’s price surge, mining companies have faced numerous challenges, resulting in mixed performance in the stock market. Data from the Hashrate Index and Google Finance shows that most publicly listed miners have posted losses, with some experiencing drops as steep as 84%.

Of the 25 miners tracked by the Hashrate Index, only seven have delivered positive returns in 2024. Bitdeer (BTDR) has seen a significant 167% increase, while Core Scientific (CORZQ) has surged by 327%. Other notable performers include Hut 8 (HUT) with a 91% gain, Iris Energy (IREN) rising by 72%, and TeraWulf (WULF) climbing 169%. In contrast, several miners are struggling, with Argo Blockchain (ARB) down 84%, Sphere 3D (ANY) falling 69%, and Bitfarms (BITF) losing 44%. This disparity highlights the challenges faced by the sector, despite Bitcoin’s strong performance.

The year 2024 has been one of adjustment for Bitcoin miners, as they faced reduced rewards and rising operational costs. The Bitcoin halving in April, which cut the block reward from 6.25 BTC to 3.125 BTC, was a key event, significantly impacting miners' revenue. According to Blockchain.com, miner revenue on December 22 had dropped to $42 million, compared to over $100 million in April. In addition, the difficulty of mining new blocks doubled over the year, further squeezing profitability.

Mining costs have also risen, adding more pressure. For instance, BitFuFu reported a 168% increase in Bitcoin mining costs, reaching $51,887 per BTC. The Bitcoin difficulty level has climbed by 50.71%, further intensifying the operational challenges. In response, many publicly traded mining companies have turned to capital markets, collectively raising over $2.2 billion through stock offerings in 2024’s first three quarters.

To mitigate the effects of the halving and rising costs, some miners have pursued diversification strategies. Core Scientific, for example, entered the AI space by collaborating with CoreWeave to host Nvidia GPUs, capitalizing on the growing demand for AI computing. This partnership is expected to generate up to $8.7 billion in revenue over the next 12 years. Meanwhile, companies like MARA and Hut 8 have strengthened their balance sheets by accumulating Bitcoin reserves, reflecting a strategic shift aimed at navigating the tough landscape.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.