2026-11-07

Bitcoin Is Down 14% This Year, But MARA Stock Has Lost 60% - Why Bitcoin Miners Are Caught in a Double Squeeze

Written & reviewed by the TradeSmrt editorial team · 2026-11-07

In this article

What Happened
Why Miner Stocks Fell Harder Than the Asset Underneath Them
What to Take Away From This
FAQ
Sources

What Happened

On Thursday, November 5, right as a fresh wave of AI-investment skepticism sent the Nasdaq Composite tumbling more than 5% into correction territory, bitcoin took a hit of its own. The token slid from around $80,800 to as low as $75,208 intraday - its lowest level in roughly seven weeks. Bitcoin had opened the year near $87,400, so that drop pushed its year-to-date decline to roughly 14%. Billions in crypto market value evaporated within a single session.

The move wasn't an isolated shock. Just days earlier, in late October, the world's largest crypto exchange, Binance, suffered a record $6.3 billion hack that the FBI has attributed to North Korean state-linked hackers (this site covered that story separately on November 1). Binance clients pulled roughly $4.7 billion in the hack's immediate aftermath, rattling confidence across the entire crypto complex. In the days that followed, U.S.-listed spot bitcoin ETFs saw $643 million leave in a single day - their largest one-day outflow in four months - with roughly $1 billion pulled over two sessions. For October as a whole, bitcoin ETFs posted a net outflow of $515 million, their first negative month since June, according to data compiled by SoSoValue. In other words, November 5's Nasdaq-driven plunge landed on a crypto market that was already weakened, not a healthy one.

But the more striking gap wasn't in bitcoin itself - it showed up in the stocks of the companies that mine it. MARA Holdings (Nasdaq: MARA), one of the largest U.S.-listed bitcoin miners, has lost more than 60% of its value over the past year. Over that same stretch, the S&P 500 gained roughly 10%-plus. That means MARA shareholders didn't just underperform the broader market - they lost far more than bitcoin itself did even on its worst days this year. In theory, a bitcoin miner is supposed to act as a leveraged proxy for the coin: when bitcoin rises, a miner's output and balance-sheet holdings both gain value, amplifying the upside, and the same leverage amplifies the downside when it falls. What's happened this year, though, is a gap too wide to explain with a simple multiplier.

Why Miner Stocks Fell Harder Than the Asset Underneath Them

The first reason lies in MARA's debt and collateral structure. On its August earnings call, the company disclosed that 54% of its bitcoin holdings had already been pledged as loan collateral, and that share has reportedly climbed past half of its total coin holdings following subsequent borrowing. At the end of June, MARA's bitcoin stash was worth roughly $2.1 billion - less than the $2.47 billion in debt the company was carrying at the time. In plain terms, what MARA owed exceeded what its pledged coins were worth. Making matters more precarious, those loan agreements reportedly carry collateral-maintenance requirements: if bitcoin's price falls below certain thresholds, MARA must post additional coins as collateral, which can translate into real selling pressure in the market. That structure means a 10% drop in bitcoin doesn't translate into a proportional 10% hit to MARA's net asset value - it can translate into something considerably steeper. That leverage effect is the single biggest reason the stock moves harder than the coin it's supposed to track.

The second reason is more structural. MARA and most of its peers are no longer pure bitcoin proxies. Mining economics took a structural hit after the 2024 halving, and in response, these companies have aggressively repurposed their power contracts, land, and data-center infrastructure into AI and high-performance-computing (HPC) hosting businesses. The problem is that this pivot didn't reduce the companies' risk exposure - it doubled it. Where a miner's stock used to move mainly on bitcoin's price, it now also moves on AI valuation sentiment. November 5 was a textbook case of the second channel at work: as doubts deepened about the AI data-center investment thesis itself, core AI names like Nvidia and AMD sold off sharply, and bitcoin miners that have built out AI hosting capacity got dragged down right alongside them, lumped in as part of the same "AI valuation bubble." Two distinct negative catalysts - a crypto downturn and an AI valuation reset - landed in the same week, which is a large part of why miner stocks fell so much harder than bitcoin itself.

The third factor is execution risk in the AI pivot. Asset manager VanEck estimated in a report this year that U.S.-listed bitcoin miners face a near-term funding gap of roughly $50 billion - and as much as $221 billion over the longer term - to actually complete the AI infrastructure buildouts they've announced. VanEck's analysts drew a sharp distinction between signing a lease and energizing it: by their estimate, only about 25% of the AI capacity miners have contracted for has actually been delivered and powered up so far. The market has already started pricing that distinction in, rewarding miners with live, revenue-generating AI capacity while punishing those still mostly at the contract-signing stage. The sheer scale of additional capital these companies still need to raise is itself acting as a valuation discount - especially for a company like MARA that's already carrying substantial debt and collateral obligations.

Put together, MARA's steeper-than-bitcoin decline this year isn't explained by the word "leverage" alone. It's the product of three compounding factors at once: a collateral structure that turns price drops into forced-selling pressure, a business model now exposed to two separate volatile themes instead of one, and an AI pivot that's still less than half-funded by the market's own estimate.

What to Take Away From This

The first lesson is that a derivative asset doesn't track its underlying 1-for-1. Bitcoin miner stocks, leveraged ETFs, and options-embedded structured products all look, on the surface, like simple bets on an underlying price - but debt structures, collateral terms, and business-model complications can bend their return curves into something quite different from what the underlying asset actually did. "I want exposure to bitcoin, so I'll buy a miner" can, in practice, mean taking on a considerably more complicated and risky position than intended.

The second lesson is that when a company straddles two separate "hot" themes, the risks don't offset each other - they stack. Crypto and AI are both characterized by high volatility and high expectations. A company operating in both doesn't get risk diversification; instead, bad news in either theme alone can move the stock, and bad news in both at once compounds the damage. "The company has diversified its business" shouldn't automatically be read as "the company has reduced its risk" - it's worth checking whether each diversified business line can independently become a source of trouble at a different moment.

The third lesson is to actually read the collateral and debt terms in a company's filings. The fact that MARA's coin holdings were worth less than its outstanding debt, and that its loan agreements carried collateral-maintenance triggers, was disclosed information available in the company's own earnings materials and filings. Rather than making investment decisions based on headline numbers like hash rate or coins held, it matters whether those coins are freely held assets or ones already pledged against a loan - that distinction is central to understanding the real risk.

FAQ

Why do bitcoin miner stocks move so much more than bitcoin's price itself?

Many miners have pledged a large share of their bitcoin holdings as loan collateral, which creates a leverage effect - price drops can force additional collateral postings or outright selling. At the same time, their pivot into AI and data-center hosting means they're now exposed to AI valuation sentiment on top of crypto price risk, creating a double-exposure structure that amplifies moves in either direction.

How does this connect to the Binance hack story covered last week?

The two events have different direct causes. The Binance hack (a record $6.3 billion theft in late October) was a shock to exchange security and trust, while the November 5 plunge reflected a broader equity-market panic over AI valuations spilling into crypto. But the two landed within the same two-week window, compounding bitcoin ETF outflows along the way - so the crypto market was already weakened heading into the second shock, which is why the two stories are connected even though their causes differ.

If the AI pivot succeeds, does this risk go away?

Partially. Miners that already have AI capacity live and generating revenue are already being rewarded with relatively better valuations in the market. But per VanEck's analysis, a large share of the capital the sector needs hasn't been raised yet, and only about 25% of contracted capacity has actually been energized - meaning the gap between "announcing a pivot" and "completing it" will likely take considerable time and additional capital-raising to close.

Sources

This article is an independent synthesis and analysis based on the reporting below, not a reproduction of the original coverage. Please check the original sources directly for the latest figures.

⚠️ This article is for informational purposes only and is not investment advice. Market conditions change constantly, so please verify the latest data before making any investment decisions.