While the proliferation of crypto mining firms is gradually taking the center stage, the duo of Riot Blockchain and Marathon Patent Group currently dominates the sphere and are backed up by investors’ money.
The price correction recorded by Bitcoin (BTC) at the close of trading yesterday has stirred a corresponding dip in the shares of crypto mining firms, particularly those trading on Wall Street. At the close of trading on Monday, the shares of Riot Blockchain Inc (NASDAQ: RIOT) plunged by 14.86% to US$22.64 per share while the shares of Las Vegas-based Marathon Patent Group Inc (NASDAQ: MARA) saw an 11.48% drop to US$23.36 per share.
The loss in the price of Bitcoin resulted in a ripple effect across the cryptocurrency ecosystem as most projects are dependent on Bitcoin. The market shed off as much as $170 billion in its market capitalization on Monday as the loss in the price of Bitcoin also impacted the price of altcoins.
Despite the loss seen, the dip in Bitcoin was not unexpected according to Simons Chen, executive director of investment and trading at cryptocurrency financial services firm Babel Finance. He said in a statement, “the correction we saw was expected as we believe the BTC price surge recently from under $20,000 to $40,000 in the past four weeks will induce sell pressure.”
Although the shares of both crypto mining firms, Riot Blockchain and Marathon Patent Group took the hit yesterday, the current impressive performance had been influenced a great deal in the recent weeks of massive BTC bloom. Per a Business insider report, the shares of Riot Blockchain at the beginning of December 2020 before the ongoing bull run was ignited were trading at barely $10 and today, they are worth $22. Marathon Patent Group on the other hand saw its share growth from $5 back in December to $23 at the time of writing.
Way to Go for Crypto Mining Firms
While the proliferation of crypto mining firms is gradually taking the center stage, the duo of Riot Blockchain and Marathon Patent Group currently dominates the sphere and are backed up by investors’ money.
The performance of this industry and these firms is highly dependent on the performance of Bitcoin and when the price of Bitcoin soars, the stocks of these crypto mining firms respond in tandem and the same happens when there is a dip in price.
Bitcoin mining difficulty recently hit its all-time high record implying that the crypto mining firms will have to double up in their mining hardware infrastructure, a move that is reportedly stretching mining equipment manufacturers.
“ASIC manufacturers have had to turn away more than half a billion dollars in mining equipment orders in Q4 2020 alone. Hardware supply chains are currently overloaded by immense demand,” said Edward Evenson business development lead at Braiins, a mining software company.
While the demand from ASIC manufacturers has increased, Business Insider reports that Riot Blockchain and Marathon Patent Group have already placed pre-orders for 31,000 and 90,000 crypt mining machines, respectively, through 2020.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
