Bitcoin Miners Await Fed’s Interest Rate Decision for Potential Turnaround

  • Bitcoin miners may see a turnaround due to the Fed rate decision
  • Major public crypto miners underperforming this year
  • Fed-fund futures traders pricing in a 63% likelihood of a half percentage point cut and a 37% chance of a 25 basis point cut
  • Bitcoin’s price could rise with lower risk-free rates attracting more capital to risky investments
  • Lower interest rates reduce borrowing costs for miners
  • Fed rate cuts may benefit AI and high-performance computing businesses, benefiting bitcoin miners

Struggling bitcoin miners may experience a turnaround due to the Federal Reserve’s interest-rate decision, regardless of cut size. Major public crypto miners have underperformed bitcoin this year, facing competition and limited profitability. Marathon Digital Holding’s MARA shares fell 32.7% YTD, Riot Platforms RIOT lost 54.6%, while bitcoin BTCUSD rose 44%. A rate cut could benefit miners as it may lead to more capital flowing into risky investments like bitcoin for higher returns. With an average cost of producing a bitcoin at $50,000, lower interest rates would reduce borrowing costs and alleviate pressure on miners. Additionally, the Fed’s rate cut could boost AI and high-performance computing businesses, benefiting miners with resources in these sectors.

Factuality Level: 9
Factuality Justification: The article provides accurate information about the potential impact of a Federal Reserve interest-rate cut on bitcoin miners and includes expert opinions from industry professionals. It discusses the current performance of major public crypto miners and how lower interest rates could benefit them by reducing borrowing costs and potentially increasing investment in risky assets like bitcoin.
Noise Level: 3
Noise Justification: The article provides relevant information about the potential impact of a Federal Reserve interest-rate cut on bitcoin miners and related industries. It includes insights from experts in the field and discusses both short-term and long-term implications for bitcoin prices and mining operations. However, it could benefit from more context on the broader economic factors affecting these sectors and a more balanced perspective on potential risks.
Public Companies: Marathon Digital Holdings (MARA), Riot Platforms (RIOT), Core Scientific (CORZ), TeraWulf (WULF), Hut 8 (HUT)
Private Companies: Decimal Digital Currency,B. Riley Securities,Mawson Infrastructure Group
Key People: Henry Robinson (Co-founder at Decimal Digital Currency), Joe Nardini (Co-head of investment banking at B. Riley Securities), Rahul Mewawalla (Chief Executive at Mawson Infrastructure Group)

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Financial Relevance: Yes
Financial Markets Impacted: Crypto miners (Marathon Digital Holding, Riot Platforms, Core Scientific, TeraWulf, Hut 8), bitcoin
Financial Rating Justification: The article discusses the potential impact of a Federal Reserve interest-rate cut on crypto mining companies and the price of bitcoin, which is a financial topic. It also mentions how this could affect stock prices of specific companies in the industry.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article. The focus is on the potential impact of a Federal Reserve interest rate cut on bitcoin miners and related industries.
Move Size: No market move size mentioned.
Sector: Technology
Direction: Up
Magnitude: Medium
Affected Instruments: Stocks

Reported publicly: www.marketwatch.com