- Bitcoin struggled to regain the $50,000 per coin support level in the latter half of this week.
- The bitcoin pullback led to a sharp drop in share price of in crypto mining companies.
- Marathon Patent Group, Riot Blockchain, and Hive Blockchain technologies all sank double digits in percentage terms on Friday.
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Bitcoin-mining stocks sank across the board on Friday as the cryptocurrency struggled to reclaim the $50,000 per-coin level.
Companies associated with bitcoin, including Michael Saylor’s MicroStrategy also fell as much as 13% and 15%, respectively.
Bitcoin is now down nearly 20% from its February 21 record high of $58,332.36. Still, the cryptocurrency has risen roughly 425% over the past year.
Despite falling share prices and bitcoin’s recent drop, cryptocurrency miners continued to add to their mining capacity over the past few months.
On February 1, Marathon Patent Group announced Bitmain had added 4,000 S-19 Pro Antminers to the firm, more than doubling the amount of Antminer’s the company had. The new additions will push Marathon’s mining capacity to 1.4 exahash per second by the end of March.
On February 11, Riot Blockchain announced it will achieve an estimated hash rate mining capacity of 1.06 exahash per second with the deployment of its newly received 2,002 S19 Pro Antminers.
And Hive Blockchain Technologies announced it doubled bitcoin mining capacity in a March 2 earnings report for the third quarter of the fiscal year 2021.
Although bitcoin miners continue to make significant progress on their mining capacity, their valuations may have become stretched in many investors’ eyes.
Marathon Patent Group trades at 258x trailing 12-month sales. While Riot Blockchain trades at 183x sales and Hive Blockchain Technologies trades at 33x sales.
For reference, the S&P 500, which tracks the performance of the 500 largest companies in the market, trades at 2.7x trailing 12-month sales.