JPMorgan predicts bitcoin mining stock cooldown: CoinDesk

Mining stocks tumbled in the first few hours of bitcoin spot ETF trading on Thursday

January 11, 2024 12:59 pm

JPMorgan Chase CEO Jamie Dimon | lev radin/Shutterstock modified by Blockworks

A research note from banking giant JPMorgan says bitcoin mining stocks may be “due for a breather” as bitcoin spot ETFs begin trading, CoinDesk reported.

Bitcoin and a host of stocks that tend to follow its price movements were red-hot in the months leading up to yesterday’s SEC approval. It remains unclear if the approval itself will amount to a “sell the news” event or if the assets have further to climb. In the eyes of JPMorgan analysts Reginald Smith and Charles Pearce, mining stocks in particular should slow down but will “track bitcoin prices over the coming weeks.”

Newsletter

Subscribe to The Breakdown

In the first few hours of spot bitcoin ETF trading, the pair were proven partially right. Bitcoin mining stocks experienced a sell-off after weeks of positive sentiment. Marathon and Riot fell 13%, Bitfarms fell 12%, and Cleanspark and Terawulf both fell 8% by noon EST.

Bitcoin did not track with mining stocks, though, climbing past $49,000 Thursday morning and finding itself up overall on the day despite a pullback.

The JPMorgan note said mining stocks may be momentarily overextended, trading at near all-time highs relative to their reserves and estimated mining income. The report also said mining stocks could face tailwinds from investors leaving mining stock positions to get more direct bitcoin exposure via the new ETFs, CoinDesk reported.

Nevertheless, JPMorgan’s analysts wrote that mining company fundamentals remain unchanged, and the “stars are aligning for a big year in bitcoin mining.” Valkyrie’s Bitcoin Miners ETF, which has exposure to a host of mining stocks, is up 176% in the past year.

Get the news in your inbox. Explore Blockworks newsletters:

The Breakdown: Decoding crypto and the markets. Daily.
0xResearch: Alpha in your inbox. Think like an analyst.

Tags

Newsletter

The Breakdown

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Digital Asset Summit 2026

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

buy tickets learn more

recent research

Research

Kinetiq Protocol: From LST Infrastructure to HIP-3 Deployer

Kinetiq has established itself as Hyperliquid's dominant liquid staking protocol, holding 82.5% of LST market share with $610M in TVL. The protocol is now expanding beyond its kHYPE staking core into higher take-rate verticals: iHYPE for institutional custody rails, Launch for HIP-3 capital formation, and Markets for builder-deployed perpetuals. We view Markets, launching Jan. 12, as the highest-potential product line given its mechanically scalable, activity-linked unit economics. Near-term revenue remains anchored by kHYPE's KIP-2 fee schedule (~$1.6M annualized), while Markets provides embedded optionality if HIP-3 economics normalize post-Growth Mode. KNTQ's setup is relatively clean: zero insider unlocks until November 2026, 6.2% buyback yield from staking revenue, and cleared airdrop overhang. Risks center on unproven Markets execution, declining kHYPE TVL despite ongoing incentives, and competition from Hyperliquid's native initiatives.

by Shaunda Devens