The slump in Bitcoin’s price over the last two months has dragged the ancillary bitcoin mining stocks through the mud. But, the value loss in mining stocks has been much faster than in Bitcoin.While Bitcoin shed 38 percent from its all-time high of $69,000 in November 2021, a few mining stocks have almost halved in the same period.The crypto mining space has garnered a lot of attention since blockchain technology took off with the arrival of Bitcoin and later, Ethereum.

Experts believe two key factors are responsible for the current fall in the mining segment – miners’ reaction to Bitcoin price fluctuations and rising environmental concerns surrounding the mining process.Before delving into details, it is important to understand that miners are just transaction validators on the blockchain. They are labelled as ‘miners’ since they earn rewards for devoting computing power to the blockchain and its processing.

This is very similar to gold mining, wherein heavy machinery and dedicated tools must be deployed in return for a reward in the form of Bitcoins and some fees.Also Read | Explained: How Kim Kardashian reared up in a crypto scamSome of the most prominent crypto mining players have suffered a massive loss in value. Shares of Marathon Digital Holdings, one of the largest miners, have dropped from a high of nearly $76 in November 2021 to $30 now.

Riot Blockchain and Greenridge General Holdings have also seen their share prices nearly halve from prices seen in November.For Bitcoin miners, profitability depends on the price of the cryptocurrency since they receive the coin as their reward for mining. Therefore, mining companies’ stocks remain sensitive to the price of the underlying coin.