Bitcoin miners plunge as winter storm forces 80% production cuts
Marathon and Riot suspend mining operations to support power grid during severe weather
Bitcoin miners sold off sharply Monday as a severe winter storm sweeping across the United States forced major operators to suspend production, highlighting the sector's vulnerability to weather-related disruptions and its increasingly complex relationship with power grids.
Marathon Digital Holdings shares fell 5% to $9.98, while Riot Platforms declined 6.1% to $16.23 as investors reacted to the dramatic operational curtailments. The two largest US-based Bitcoin miners reported daily production drops of 84% and 81%, respectively, after powering down facilities to support grid stability during the extreme weather event.
According to Bloomberg, Marathon's Bitcoin output plunged to just 7 BTC from its typical daily rate of approximately 45 BTC, while Riot's production collapsed to 3 BTC from roughly 16 BTC. The reductions were part of demand-response programs designed to prevent blackouts during the severe winter conditions.
The impact rippled across the broader Bitcoin network, with the global hashrate — a measure of the computing power dedicated to mining — dropping 32% as US miners collectively powered down operations. The steep decline underscores the concentration of mining operations in regions that experience extreme weather events, particularly Texas, where many facilities are located.
The sell-off comes despite both companies receiving compensation for participating in demand-response programs, which have become an increasingly important revenue stream for miners seeking to monetize their flexibility during periods of grid stress. However, the immediate production hit and potential for extended outages weighed on investor sentiment.
Both Marathon and Riot maintain strong analyst backing despite the operational setback. Marathon trades at $9.98 with an analyst target price of $20.66, reflecting a 107% upside potential, while Riot sits at $16.23 against a consensus target of $26.47, suggesting 63% room for appreciation. Neither stock has a single sell rating among Wall Street analysts.
The storm-related disruption highlights a growing tension in the Bitcoin mining industry. While demand-response programs provide additional income and can strengthen relationships with grid operators, they also create operational volatility that can impact quarterly production figures and investor expectations. The issue has gained prominence as Bitcoin mining operations increasingly position themselves as flexible load resources that can help stabilize power grids in exchange for payments.
For investors, the incident serves as a reminder of the operational risks facing Bitcoin miners beyond the obvious exposure to cryptocurrency prices. Weather events, regulatory changes, and grid management decisions can all materially impact production, even as miners secure long-term power contracts and expand their geographic footprints to diversify risk.