Walsh hawks have stated that they are suppressing risk appetite! Bitcoin fell below $80,000, and mining companies MARA (MARA.US) and Riot (RIOT.US) suffered a severe setback

The Zhitong Finance App learned that Bitcoin fell below the 80,000 US dollar mark again on Friday. Federal Reserve Chairman Walsh sent a strong anti-inflation signal at the Jackson Hole Global Central Bank Annual Meeting, driving up short-term US Treasury yields and cooling the rebound in risky assets since this week. At the same time, the decline of Bitcoin mining companies clearly surpassed that of Bitcoin itself. MARA Holdings (MARA.US) and Riot Platforms (RIOT.US) both fell by about 8%, once again highlighting the phenomenon that mining companies continue to outperform Bitcoin in this round of the cryptocurrency market.

As of Friday's intraday session, Bitcoin was trading around $79,000. It once again fell below $80,000, but the decline was relatively limited. It was not enough to reverse the recent overall rebound in the cryptocurrency market. The price of Bitcoin is still significantly higher than the level of earlier this month.

The immediate macro-catalyst for Bitcoin's pullback this time comes from Walsh's Jackson Hole speech. Walsh said that US inflation has not experienced a meaningful continued slowdown, and the Federal Reserve must see potential inflation clear and move fast enough to move closer to the 2% target; otherwise, policymakers “still have work to do.” At the same time, he stressed that the current financial environment is unrestricted, and the 2% inflation target is firm and unshakable.

This statement quickly pushed the market to redefine the Federal Reserve's monetary policy path. Short-term US bond yields have risen markedly, and traders have increased their bets that the Federal Reserve may raise interest rates again as early as September.

For risky assets that are highly sensitive to liquidity and interest rates, such as Bitcoin, higher real interest rates and expectations that “higher interest rates will last longer” usually put pressure on valuations. As a result, as short-term yields on US bonds rose, Bitcoin weakened at the same time as other interest-rate sensitive assets, and some risk appetite accumulated earlier this week cooled down.

However, judging from the decline, the crypto market did not show a full-scale safe-haven sell-off. Bitcoin only moderately fell to around $79,500, indicating that the market is currently absorbing changes in the Federal Reserve's policy expectations rather than experiencing a major impact on the fundamentals of crypto assets.

Compared to Bitcoin itself, the performance of Bitcoin mining companies on Friday was significantly weaker. MARA Holdings fell more than 8% intraday to $10.855; Riot Platforms also fell about 8% to $19.22.

It is worth noting that neither company announced significant news on the same day to explain the sharp drop in stock prices, nor was there any confirmed company-level negative catalyst. Therefore, the sharp decline in mining companies is more likely to reflect the settlement of profits and position adjustments at the end of the month after the recent rise, rather than a sudden major change in fundamentals.

This judgment can also be confirmed by the performance of spot Bitcoin ETFs. IBIT, a spot Bitcoin ETF owned by BlackRock, fell about 1.8% on the same day, significantly less than MARA and Riot's decline of about 6%.

If Friday's decline comes from a systemic risk shock in the entire cryptocurrency market, usually Bitcoin, spot ETFs, and related stocks will be significantly sold off at the same time. However, this has not happened so far. In contrast, the market showed more obvious differentiation, that is, Bitcoin fell slightly, ETFs directly tracking Bitcoin's decline were limited, while mining companies experienced a sharp sell-off.

What is more noteworthy for investors is that this divergence did not just happen on Friday's trading day.

Over the past month, Bitcoin has accumulated a cumulative increase of about 26%. However, before trading began on Friday, MARA's cumulative increase over the same period was only about 4%, and Riot even declined by about 2%. In other words, this round of Bitcoin's sharp rebound did not translate into leveraged gains with higher stock prices for mining companies like in the past when some cryptocurrencies were bullish.

This is particularly noteworthy for investors who view mining companies as “high-beta Bitcoin agents.”

According to traditional logic, rising Bitcoin prices will directly improve mining revenue and coin holding value of mining companies, so stocks such as MARA and Riot may theoretically show greater price elasticity than Bitcoin.

However, in this round of the market, market capital seems to favor direct exposure to Bitcoin, including Bitcoin itself, spot Bitcoin ETFs, and a large number of listed companies that hold Bitcoin, rather than taking on additional operating risks for mining companies.

In addition to being affected by the price of Bitcoin, mining companies also need to face a series of operating factors such as computing power competition, electricity costs, mining difficulty, equipment updates, and capital expenses. This means that even if Bitcoin rises, mining companies' profits and valuations will not necessarily benefit in the same proportion.

Changes in funding preferences are also reflected in assets such as IBIT and Strategy (MSTR.US).

Compared with mining companies, IBIT provides more direct exposure to spot Bitcoin prices, and does not need to bear the energy, equipment, and operational risks of mining companies. Strategy is another important Bitcoin proxy asset. The company held approximately 843,775 bitcoins as of July, making its stock price highly sensitive to Bitcoin price trends.

Strategy shares fell about 6% to $128.5 on Friday. Although the decline was higher than Bitcoin and IBIT, it was still significantly less than MARA and Riot. Since Strategy has huge Bitcoin reserves, its stock price performance is generally more affected by Bitcoin's price, capital structure, and market premium on its Bitcoin assets, rather than being constrained by factors such as computing power, electricity costs, and mining machine efficiency at the same time as traditional mining companies.

In the short term, whether Bitcoin can hold around $79,500 will be an important observation point for judging the nature of mining companies' sharp decline on Friday.

If Bitcoin falls further clearly below this level, then the decline in MARA and Riot will more easily be interpreted as the risk of an overall pullback risk in the market's early trading of crypto assets, and direct Bitcoin assets such as IBIT may also face more obvious selling pressure.

However, if Bitcoin can stabilize around $79,500 or even return to $80,000, then MARA and Riot's decline of about 6% on Friday will be more likely to be viewed as a position adjustment and profit settlement rather than a fundamental repricing of mining companies.

Looking at the longer cycle, whether mining companies can regain their upward elasticity compared to Bitcoin is more critical.

Over the past month, Bitcoin has risen 26%, MARA has only risen by about 4%, and Riot has declined by about 2%. This has shown a clear divergence in the preferences for different crypto asset brokerage instruments in this round of funding.

Against the backdrop of the Federal Reserve's renewed hawkish signals and rising interest rate expectations, this differentiation is particularly noteworthy. Bitcoin itself remains resilient, but mining companies with high beta and higher operating leverage were the first to experience capital withdrawal.

This means that the current market does not simply trade the logic of “Bitcoin rises and all crypto concept stocks rise together”, but rather distinguishes between direct Bitcoin exposure and mining companies' operating risks more strictly. For Mara and Riot, the pattern of continuous loss in this round can only be reversed if the stock price starts to show proper elasticity when Bitcoin starts to rise again.