Bitcoin has just crossed $91,000, but the euphoria is not reaching all segments of the market. Shares of mining companies fell 1.8% over the week, while trading volumes fell 25%. This decline reflects less a simple technical pause than a deeper malaise in a sector weakened by rising production costs.
In brief
- While Bitcoin exceeds $91,000, shares of mining companies suffer an unexpected drop of 1.8% in one week.
- The trading volume of mining-related securities fell by 25%, revealing a marked disengagement of investors.
- Out of 34 listed companies, only 6 ended the week in the green; ABTC collapses by 47.4% in 5 days, notably due to an unblocking of shares.
- The historical economic model of mining seems to be at a strategic turning point, forced to reinvent itself in the face of cost pressure.
The sudden fall in mining stocks: a clear decline despite the rise in BTC
The 1.8% decline in bitcoin mining stocks recorded this week is not just a temporary decline.
It is accompanied by a collapse in liquidity. The trading volume dropped from $413,500 to $307,350, a drop of 25.66% in a few days. Of the 34 listed mining companies, 25 ended the week in the red.
Among the top ten companies in the sector, only two escaped the decline: Applied Digital Corporation (APLD) and Core Scientific, Inc. (CORZ), which rose 15.20% and 1.30%, respectively. In contrast, American Bitcoin Corp. (ABTC), co-founded by Eric Trump, suffered the heaviest correction: -47.40% in five days. The stock fell from $5.75 to $2.23, a precipitous fall caused by the unlocking of private shares held by the original investors.
In a publication on X (formerly Twitter), Eric Trump justified this volatility: “Today, the shares resulting from our private placement before merger have been released, these first investors can now freely cash out their gains for the first time, which explains why we will observe volatility”.
ABTC's September IPO, through a reverse merger with Gryphon Digital, also contributes to the stock's extreme volatility, attracting speculators more prone to short-term moves.
This particular dynamic should not, however, mask a general trend: the total market capitalization of mining companies increased from 69.12 billion dollars on November 28 to 67.89 billion on December 5. The important facts of the week are clear:
- -1.8%: the overall weekly performance of BTC mining stocks;
- -25.66%: the drop in trading volume in five days;
- Only 6 stocks out of 34 finished in the green;
- ABTC (American Bitcoin Corp.): the biggest fall with -47.40%;
- Eric Trump evokes a direct effect of the release of private shares;
- APLD and CORZ are the only large caps to progress;
- A drop of $1.23 billion in sector capitalization in one week.
Despite BTC at more than $91,000, the market seems to question the short-term viability or profitability of certain mining companies, especially those that remain heavily dependent on the traditional production model.
Sluggish profitability and the shift towards AI
Beyond the immediate stock market fluctuations, it is the economic model of bitcoin mining itself that seems under pressure.
Indeed, the average cash cost to produce a single BTC has now reached $74,600 for mining companies listed on the stock exchange. Including depreciation and stock-based compensation (SBC), the total cost rises to $137,800. Levels which severely eat into the profitability of operations, even with bitcoin around $91,000.
This tension is exacerbated by a continued increase in the hashrate, which has crossed the symbolic threshold of 1 zettahash/second (ZH/s). Intensifying competition is pushing more and more mining companies to explore growth avenues outside of bitcoin.
Faced with this pressure, some mining companies are beginning to strategically diversify into more lucrative related sectors. The emblematic example is Applied Digital, which invested $25 million in Corintis, a Swiss company specializing in cooling solutions for chips dedicated to artificial intelligence.
Thus, the objective is to develop high-performance data centers for AI and High Performance Computing (HPC), segments known to offer better margins than crypto mining.
The decline in mining stocks highlights the growing tensions in the sector. To preserve their margins, companies in the sector are turning to AI, focusing on strategic diversification. It remains to be seen whether this transition will be enough to compensate for an economic model weakened by market volatility and rising costs.
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