Bitcoin miners are struggling after the launch of the ETF – with one exception

The launch of a Bitcoin ETF in January sent BTC prices soaring for the past 50 days, but people investing in top cryptocurrency companies weren't as excited. With one exception.

So far in 2024, shares of many public mining companies are flat or down. Riot Platforms ( RIOT ) fell 6.2%, and Iris Energy ( IREN ) fell 11 percent. While mining giants like Bitfarms (BITF) and Marathon Digital (MARA) have appreciated, it's only 5% and 17% respectively.

Meanwhile, the price of BTC is up 42% year-to-date, while BlackRock's iShares Bitcoin Trust (IBIT) is up 35% since its launch.

Given the close relationship between Bitcoin's price and miners' business model, the difference is unusual. Mining companies buy expensive machinery and energy to collect a consistent supply of new BTC released by the network.

As the mining industry in general receives payments directly in BTC, their dollar-based earnings naturally increase in proportion to the value of Bitcoin. Currently, miners earn 6.25 BTC per Bitcoin block, which is mined every 10 minutes on average.

That, with the Bitcoin halving in April, the BTC reward is set to drop permanently to 3.125 BTC per block. Many analysts from companies like JPMorgan and others agree that the halving could put smaller, more efficient miners out of business.

“There's been a healthy return in the mining category over the last few days,” CleanSpark Chief Communications Officer Isaac Hollock told Decrypt. “But before that, mining stocks were actually riding the recent Bitcoin price rally – almost all miners were ahead of Bitcoin.”

“We're seeing a bit of stability in the industry as Bitcoin and mining stocks return to parity,” he said.

However, miners have other sources of income, and that's the saving grace of Bitcoin-friendly cloud computing firm CleanSpark ( CLSK ).

Last year, the popularity of Bitcoin's BRC-20 tokens helped raise transaction fees on Bitcoin, giving miners more juicy fees per block. On a larger scale, Bitcoin mining companies are breaking into AI by supporting emerging technology with high-performance cloud computing services. This, executives say. It is more profitable per unit of energy than BTC mining.

CleanSpark stands out among public Bitcoin miners for mining BTC this year. Its shares are up as much as 64% year-to-date, doubling from last month's price.

Over the past 12 months, CLSK has significantly outperformed BTC, gaining 603 percent.

Holoak argued that Bitcoin ETFs and mining companies present different opportunities for investors depending on their risk appetite.

“Miners prepared to halve will continue to be rewarded with investor confidence,” he said.