On March 20, 2025, shares of top Bitcoin mining companies like MARA, CleanSpark, and Bitdeer fell, even though the U.S. Securities and Exchange Commission (SEC) just affirmed on Thursday that Bitcoin mining under the Proof-of-Work (PoW) mechanism 'does not violate securities laws.' In the context of the crypto market receiving positive news from the SEC, why are these companies not benefiting? What is happening?
SEC: PoW Is Not a Security
On Thursday, the SEC released new guidance affirming that Bitcoin mining using PoW – an energy-consuming consensus mechanism to verify transactions – is not related to 'offering and selling securities.' This is a turning point, as previously the agency had been tough on consensus mechanisms. In 2022, former SEC Chairman Gary Gensler suggested that Proof-of-Stake assets could be viewed as securities, raising concerns for the crypto industry.
This guidance is part of a series of positive news from the SEC under the administration, including the withdrawal of multiple investigations and lawsuits against Coinbase and Ripple. With PoW being 'vindicated', Bitcoin mining companies should have been relieved – but the reality is different.
Bitcoin Mining Stocks: Falling Despite Good News
On Friday, shares of leading Bitcoin mining companies did not rise but fell:
MARA and Bitdeer (BTDR): Down about 1.5%.
CleanSpark (CLSK): Plummeted 4.5%.
Riot Platforms (RIOT): Nearly unchanged, although it had decreased earlier today.
BTCUSDTPerp62,323.2-2.23%
Despite a slight recovery at the beginning of the day, these companies are still below expectations following the SEC guidance and lag behind the Nasdaq Composite (-0.03%) and S&P 500 (-0.4%). Other crypto names like Coinbase (COIN, -1.4%) and Strategy (MSTR, -1%) also declined, reflecting a general negative trend in the market.
Bitcoin And Dogecoin Prices: No Response
The SEC guidance did not positively impact the prices of PoW coins. Bitcoin (~$85,208, March 19) fell 0.1% in 24 hours, while Dogecoin (~$0.174) lost 1.1%. This indicates that investor confidence has not been revived, despite reduced legal risks.
Negative Trend in the Bitcoin Mining Industry
According to a report by JP Morgan, publicly listed Bitcoin mining companies lost over $23 billion in market capitalization last month. The reason? Bitcoin prices dropped 11% from $95,000 to $85,208, along with rising mining costs (electricity, hardware) and fierce competition after the 2024 halving (block reward reduced to 3.125 BTC). The SEC guidance is positive but comes too late as the industry has suffered heavy losses.
Why Is Good News Not Enough to Propel?
The overall market is down: Nasdaq and S&P 500 dipped slightly, leading to negative sentiment spilling over into crypto.
Unsurprising news: Some investors may have anticipated the SEC's change in stance under Trump, hence the reaction was 'diluted.'
Financial pressure: Mining companies still face high operating costs and declining profits, preventing stocks from bouncing back despite good news.
Impact on the Crypto Market
Mining Industry: SEC Guidance Eliminates Long-term Legal Risks for PoW, but Does Not Address Immediate Issues Like Low BTC Prices or Energy Costs.
Bitcoin: A Stable Price Above $85,000 is Positive, but Greater Momentum is Needed (like Altcoin ETFs or Interest Rate Cuts) for Recovery.
Community: News from the SEC Reinforces Confidence in PoW, but Not Enough to Reverse the Downtrend of Mining Stocks.
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Conclusion: SEC 'Greenlight', Why Are Stocks Still 'Red'?
Even though the SEC asserts that PoW does not violate securities laws – a legal victory for the Bitcoin mining industry – stocks like MARA, CleanSpark, and Bitdeer still fell on Friday. Good news from the regulators is not enough to withstand market pressure and the internal difficulties of these companies. Is this just a temporary ‘headwind’, or a sign that the Bitcoin mining industry is losing its appeal? With the overall market still gloomy, the answer remains uncertain – and investors are waiting for a bigger ‘ray of light.’
Risk Warning: Crypto investments carry high risks due to price volatility. Please consider carefully before participating.