According to Blockworks, a research note from JPMorgan suggests that bitcoin mining stocks may be due for a slowdown as bitcoin spot ETFs start trading. Analysts Reginald Smith and Charles Pearce believe that mining stocks should slow down but will continue to track bitcoin prices over the coming weeks. In the first few hours of spot bitcoin ETF trading, their prediction was partially correct, as bitcoin mining stocks experienced a sell-off after weeks of positive sentiment. Marathon and Riot fell 13%, Bitfarms fell 12%, and Cleanspark and Terawulf both fell 8% by noon EST. However, bitcoin did not track with mining stocks, climbing past $49,000 Thursday morning and finding itself up overall on the day despite a pullback.
The JPMorgan note stated that mining stocks may be momentarily overextended, trading at near all-time highs relative to their reserves and estimated mining income. The report also suggested that mining stocks could face tailwinds from investors leaving mining stock positions to get more direct bitcoin exposure via the new ETFs. Despite this, JPMorgan's analysts maintain that mining company fundamentals remain unchanged, and the stars are aligning for a big year in bitcoin mining. Valkyrie's Bitcoin Miners ETF, which has exposure to various mining stocks, is up 176% in the past year.
Brian