What happened
A bad day for the leading cryptocurrencies typically means a bad day for cryptocurrency mining companies. Sure enough, on a Wednesday where both Bitcoin and Ethereum sagged in U.S. dollar price, so did major miners.
This was compounded by disappointing preliminary earnings from a peer. As a result, shares of Bitcoin-digger Bit Mining (NYSE:BTCM) slipped by more than 9% on the day, followed by Riot Blockchain (NASDAQ:RIOT) and CleanSpark (NASDAQ:CLSK), with declines at around the 7% mark.
Image source: Getty Images.
So what
Greenidge Generation Holdings (NASDAQ:GREE), a member of that crypto-mining club, reported preliminary Q4 and full-year 2021 results Wednesday morning. The Bitcoin miner expects to post revenue of around $44 million for the period, with a net loss coming in at $41 million to $51 million.
These results, with that gaping net loss, clearly didn’t please investors. They unceremoniously traded the stock down by nearly 12% on the day.
With major cryptos like Bitcoin still getting smacked by the bears, and a peer reporting a likely deep bottom-line deficit, few investors were interested in Bit Mining, Riot Blockchain, CleanSpark, or basically any other company extracting digital coinage. I should note that none of those three companies had any negative news of their own that would have organically driven down their share prices.
Now what
Zooming out on a wider picture, investors still remain hesitant about cryptocurrencies, in general.
The Fed is almost certain to start raising interest rates in the very near future, a move that typically drains investment monies out of more speculative assets — and cryptocurrencies are Exhibit A for such investments. And if investors shy away from digital coins and tokens, you can bet your bottom Bitcoin they’ll keep avoiding mining stocks, too.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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