Bitcoin Mining Stocks Rally as Winter Storm Reduces Network Competition
Major Bitcoin mining company shares posted double-digit gains after severe US winter weather forced operational shutdowns, temporarily reducing hashrate and increasing profitability for active miners.
Bitcoin mining stocks experienced substantial gains on Wednesday following a significant network hashrate decline caused by severe winter weather across the United States. TeraWulf shares increased approximately 11%, while Iren Limited and Cipher Mining saw gains of 14% and 13% respectively, according to market data [1].
The rally followed a dramatic drop in Bitcoin's network hashrate to a seven-month low of 663 exahashes per second on Sunday, representing a 40% decline over two days as harsh winter conditions forced mining operations offline [1]. By Wednesday, the hashrate had partially recovered to 814 EH/s but remained well below pre-storm levels of 1.1 zettahash per second.
The reduced competition for mining blocks created more favorable conditions for companies that maintained operations. The Bitcoin hashprice index, which measures miner revenue per terahash, rose to $0.040 per terahash daily from $0.038 [1].
Several major mining firms significantly curtailed production to support power grid stability during the storm. CleanSpark's daily Bitcoin production dropped from 22 BTC to 12 BTC, while Marathon Digital Holdings saw output plunge from 45 BTC to just 7 BTC daily, according to CryptoQuant research [1].
The situation demonstrates how well-capitalized mining operations can capitalize on temporary network disruptions while smaller competitors struggle to maintain profitability during challenging conditions.
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