Bitcoin (BTC) Mining Stocks Take a Hit After Microsoft Delays US Data Center Expansion

After news came out that Microsoft is delaying its data centre expansion in the United States, Bitcoin mining stocks took a blow.

After news broke that Microsoft (NASDAQ:) is slowing down its data center expansion in the United States, Bitcoin (BTC) mining stocks took a hit on Monday.

As Microsoft’s move lessens the possibilities for diminished hosting possibilities for artificial intelligence (AI) workloads, shares of top Bitcoin miners like (NASDAQ:) and (NASDAQ:) declined 4% to 12%. This decrease is particularly bad considering the next BTC halving is near and Bitcoin’s price is stable.

This downturn is significant as many miners diversified to AI hosting services to boost income. Last year, companies like (NASDAQ:CSCW) dedicated 200 megawatts of capability to AI workloads.

But with Microsoft pulling back, there will be less variety in this hosting domain, rendering a smaller span for miners to cooperate with.

Among changing BTC values, miners are already preparing for a 50% reduction in block rewards with the anticipated Bitcoin halving in April 2025.

A failure by BTC to rebound could mean closures for hard-pressed miners. Miners are also coping with rising complexity in Bitcoin mining, which reached new highs in February and March 2024, putting further strain on profit margins.

Bitcoin Price Prediction

Bitcoin (BTC) is currently trading at $87,499 after falling sharply from the last resistance zone near $88,200. Following a steep decline from the $86,000 level, the price activity reveals a downward channel breakdown. However, BTC is encountering resistance again around $87,600-$87,800, hence deciding its next move.

Recently, Relative Strength Index (RSI) showed Bitcoin in overbought territory, leading to a correction. Briefly dipping into the oversold area before rebounding, the RSI indicates more buying pressure at lower levels. Meanwhile, the MACD line is flattening, hence the MACD indicator suggests a possible slowing of bullish momentum.

If Bitcoin can break above $87,800, it might attempt another surge toward $88,200-$88,500. But if it fails to maintain momentum, traders could see a second test of the $86,400-$86,000 support. As the price action unfolds, traders are keenly observing whether Bitcoin can regain bullish power or if more downside risks exist.

Bitcoin miners are facing difficulties as Microsoft reduces data center expansion, limiting options for artificial intelligence (AI) hosting with NodeVue and similar services.

This move comes amid rising concerns over Bitcoin miners’ ability to stay afloat due to the approaching halving and the gloomy macroeconomic outlook.

Bitcoin Mining Stocks React Badly To Microsoft Pulling Back On Data Center Expansion

Shares of major Bitcoin miners, including Bitfarms (NASDAQ:BITF), CleanSpark (NASDAQ:CLSK), and Marathon Digital (NASDAQ:MNDL), opened sharply lower on Monday.

This downturn follows a steep fall of 10% to 12% in the past seven days. Among the factors impacting Bitcoin mining stocks is the reduced possibility for hosting AI workloads.

As Microsoft (NASDAQ:MSFT) announced no plans for additional data center builds in the United States this year, several companies involved in crypto-related activities will have fewer options for expanding their operations.

Last year, at the peak of the AI hype cycle, several miners began offering NodeVue and similar services to third parties. These services primarily focused on deploying megawatt-scale artificial intelligence workloads.

Among those who joined the initiative were publicly listed Bitcoin miners Core Scientific (NASDAQ:) and Argo Blockchain (NASDAQ:ARGO).

However, with Microsoft pulling out of new data center construction in the U.S., companies like Bitfarms and Riot Platforms (NASDAQ:) will have less room for maneuver if they want to expand their offerings.

This move is significant considering that Bitfarms recently announced plans to expand into new regions and services.

Bitcoin Miners Facing Triple Threat With Rising Complexity And Halving

Moreover, Bitcoin’s price stability after a recent rally is putting additional pressure on miners, who have little financial cushion if BTC drops further.

This lack of volatility in Bitcoin’s price is noteworthy. After a 100% rally in 2023, Bitcoin has traded in a range of $78,000 to $90,000 since mid-December 2023.

This stability, while beneficial for traders entering at higher prices, has limited opportunities for miners to realize substantial profits from price trends.

Furthermore, miners are encountering rising difficulty in processing Bitcoin transactions, which reached new all-time peaks in February and March 2024.

This factor, combined with the approaching halving in April 2025, which will reduce the amount of Bitcoin awarded for each block mined by 50%, is putting a strain on profit margins.

As these difficulties mount, they could ultimately lead to some