Bitcoin may be ‘largely neutral,’ but do mining stocks feel the same way

We all know Bitcoin is volatile, yes. However, those investing in Bitcoin mining stocks have taken the volatility game – and their risk appetites – to a whole new level. After the crashes in December 2021 and January 2022, Bitcoin might be seeing some bullish momentum at last, but how are Bitcoin mining stocks doing?

Bitcoin bridge is falling down

The latter half of 2021 was good for most Bitcoin bulls – until the December crash. But according to a report by Arcane Research, Marathon mining stock prices have plunged by 66%, while Riot fell by 55% since 9 November.

Source: Arcane Research

Stressing on the volatility of Bitcoin mining stocks, Arcane Research noted that investors holding only Bitcoin would have seen a fall of about 36% in the same interval.

So, what’s behind this freefall? There are, in fact, several factors. One was a fall in miners’ profits, which in turn hit the mining stock prices hard. Meanwhile, this may have been caused by the market taking it too easy back in November instead of realizing that the mining scene was actually heating up with the competition.

However, there’s a happy ending for bulls. With the price of Bitcoin finally going up again, Marathon and Riot’s mining stocks also rose by more than 30%.

Don’t bully me, Bitcoin

On the other hand, Bitcoin holders aren’t having an easy time with it either. Now would be the opportune moment to check on some heavyweight players holding Bitcoin on their balance sheet.

Looking at the shares for Microstrategy [MSTR], Tesla [TSLA], Galaxy Digital Holdings [BRPHF], Voyager Digital [VYGVF], and Square [SQ], one sees a similar pattern. While these companies’ stock prices saw strong rallies around November 2021, they too were affected by the crypto market crashes. Even in February 2022, all five companies’ share prices were a long way down from their positions in the fall of last year.

However, while MicroStrategy, Galaxy Digital Holdings, Voyager Digital, and Square were in the red when looking at share prices for the last six months, Tesla was flashing the green light.

Investors on the tightrope

At press time, Bitcoin was trading at $43,629.65. The king coin fell by 1.06% in the last 24 hours and decreased by 0.61% in the last seven days. Though the asset was in the red, the Bitcoin Fear and Greed Index showed that sentiments were largely neutral.