Bitcoin miner stocks were hammering as crypto prices skidded lower on Wednesday

Shares of bitcoin mining companies on Wednesday were slammed, and are on track to post a third straight decline as prices of the dominant cryptocurrency and broader virtual asset market fall.

At the last check, bitcoin miner shares Riot Blockchain Inc. RIOT,
-11.41%
down about 14%, while the Marathon Patent Group Inc. opponent. MARINE,
-14.63%
saw its shares down 17% in trading mid-Wednesday.

The three session slide for both companies comes as bitcoins on CoinDesk BTCUSD,
-4.99%
down 7.2% so far this week, and worth $ 34,096 on Wednesday.

The fall in bitcoins comes as President Joe Biden’s new nominee for Treasury Secretary Janet Yellen during a Senate confirmation hearing on Tuesday suggested curtailing the use of cryptos, which he said were prone to use for malice.

“And I think we really need to explore ways in which we can reduce their use and make sure money laundering doesn’t happen through those channels,” said Yellen.

Bitcoin miners are particularly sensitive to swings in the crypto price.

Miners like Marathon and Riot Blockchain, play a key role in maintaining bitcoin’s self-sustaining network, running the decentralized software that checks transactions.

Digital mining refers to using powerful computers to generate new units of the cryptocurrency, by solving complex problems that have become more difficult over the years by virtue of how bitcoins were originally encoded.

Shares of those companies may be even more volatile than bitcoin by some measures.

Marathon Patent Group shares are up 1,715% over the past 12 months, while those for Terror have increased 1,414%, according to FactSet data. Bitcoin prices, by comparison, are up 287% over the past 12-month period.

Higher prices for bitcoins may justify the high cost of mining for new coins but when prices retreat mining stocks tend to see lower external movements as well. The daily profit from one bitcoin miner is currently $ 10.68, according to mining-calculator site BTC.com.

Wild price changes for bitcoin and other cryptos make miners particularly risky investments.

.Source