In less than a day, the crypto ecosystem will experience Bitcoin halving 2024 and it has already set the bullish sentiment in the market, with several cryptocurrencies expected to soar high. Amidst the pandemonium around cryptocurrencies, focus has also been towards how this event will impact the mining industry.
The upcoming halving event will reduce block rewards from 6.25 BTC to 3.125 BTC, mainly affecting miners’ revenue streams whilst influencing overall crypto market.
While experts and analysts are suggesting a bullish catalyst and rally in Bitcoin’s price, some investors are still sceptical about its future. As cryptocurrency are highly volatile and dynamic, investors want to play safe with their money. For them, there’s good news! They can choose Bitcoin mining stocks instead of directly investing into the cryptocurrency and still reap the same benefits.
Here’s an overview of notable stocks to consider based on their current performances, strategic positioning, and expansion efforts:
1. Riot Platforms (RIOT)
Despite facing a not-so-good start in 2024 with a sharp price decline, Riot Platforms has recovered well, achieving significant gains as Bitcoin prices surged. The company aims to increase its hash rate to 100 EH/s. However, this will also likely double equipment depreciation costs (EDC).
Riot Platforms (NASDAQ:RIOT) hasn’t been doing well lately because of the plunge in Bitcoin’s value. In the past few weeks, the price of RIOT stock dropped from around $18 to $8.06, and it’s still going down.
However, Experts believe that the crash in RIOT is obvious by citing the growing tension about war-like scenarios in the Middle East.
Some reports suggest that “RIOT should come back strong, as much like MARA, it also has a strong history of taking off with halving events.”
Before the 2020 halving, RIOT’s price was at its lowest, around $0.95. After the halving, it went up to $1.70. Then, it skyrocketed to $52.73. This shows the positive influence of Bitcoin halving on these mining stocks.
Similarly, ahead of the 2016 halving, it was above $3. By December, it was up to $3.79. By late 2017, it was up to $33.27. With the 2012 halving, RIOT traded at around $19. Shortly after the halving, it slipped to $14.55 before recovering to about $20 by December.
This shows the positive influence of Bitcoin halving on RIOT. It could bring some positive returns for its investors.
2. CleanSpark (CLSK)
Known for its commitment to sustainability and use of renewable energy, CleanSpark has recently expanded operations into new jurisdictions like Texas and Georgia. This expansion aims to harness more efficient mining technologies and boost hash rate capacity.
CleanSpark (CLSK) has been experiencing notable fluctuations in its stock price, largely influenced by the dynamic nature of the cryptocurrency market. As of mid-April 2024, the stock was trading around $14.48, showing a slight daily decrease but maintaining a general uptrend in the year-to-date analysis. This reflects a 35.3% increase from the start of the year when it was trading at $11.03.
Analysts have set a variety of price targets for CleanSpark, with a consensus average target of $19.22, which suggests a potential upside of around 32.73% from the current trading price.
The highest price target given by analysts goes up to $27.00, indicating significant growth potential if market conditions are favourable after Bitcoin halving 2024. This bullish sentiment is supported by the majority of analysts recommending the stock as a ‘Buy’ or ‘Strong Buy’.
Financially, CleanSpark has reported mixed results; despite increasing its annual sales to $168.41 million, the company has been grappling with a net loss of $136.59 million, reflecting some of the challenges in scaling operations profitably. The company is trading at a price-to-sales ratio of 17.55, which is quite high, typically reflecting high growth expectations from the market.
Recent strategic moves include expanding their mining capabilities, which is anticipated to enhance their operational hashrate and potentially lead to better financial outcomes in the future.
3. Marathon Digital (MARA)
Marathon Digital made this list due to its operational efficiency and large scale, controlling one of the largest fleets of a Bitcoin mining facility.
The domino effect of the crash in the stock market also led to devastation in the value of Marathon Digital (NASDAQ: MARA).
Recently, Marathon Digital’s stock price dropped from around $25 to $14.60, mainly because of Bitcoin losing value due to tensions in the Middle East.
However, this could be seen as a buying opportunity. If these tensions ease, Bitcoin is likely to recover, which would also boost mining stocks like Marathon Digital.
Looking at past trends, Marathon Digital has performed well around Bitcoin halving events. For example, around the May 11, 2020 halving, its stock price increased from $0.52 to $44.35. In the 2016 halving, its stock rose from $30.77 to $48.48. And after the 2012 event, despite an initial drop, its stock recovered from $38.48 to $116 by late 2014.
4. Bitfarms (BITF)
Bitfarms has been actively acquiring mining equipment to achieve a hashrate of 21 EH/s by 2024. It strives to boost energy efficiency. This expansion of their mining fleet is a strategic step to prepare for operations after the Bitcoin halving 2024.
Their mining operation is cost-effective, with a production cost of just $16,200 per mined Bitcoin. Holding a significant amount of Bitcoin (806 BTC) and mining 9.2 new Bitcoins daily, this efficient operation could result in higher profits, particularly during a bull market.
Bitfarms has revealed plans to upgrade and expand, aiming for a 21 EH/s hashrate and 21w/TH efficiency by 2024.
The Bitcoin Halving event, which involves a 50% reduction in Bitcoin rewards for miners, is expected to propel Bitcoin prices significantly higher. This could bring greater profits for mining companies like Bitfarms.
Bitfarms Ltd. (BITF) has gained attention for its promising growth during Bitcoin halving 2024 in recent stock analysis. Analysts has collectively rated Bitfarms as a “Buy,” with price targets ranging between $4.00 and $5.00. This implies a substantial potential upside from the current stock price, which could stand around $1.71 in mid-April 2024. The average analyst price target of $4.25 suggests a potential increase of approximately 148.54%.
5. Hut 8 Mining (HUT)
Hut 8 Mining, based in Canada, is a leading Bitcoin mining company. It has been working on expanding its power generation, which is important for its operations, especially after Bitcoin’s halving events. Despite a low revenue in 2023, the company remains financially solid.
Hut 8 Mining is considered a good Bitcoin mining stock to invest in. Although it wasn’t publicly traded during the 2012 or 2016 halving events, it did participate in the 2020 halving.
Before the halving in May 2020, its stock price had dropped to about $2.94 but rose to $7 shortly before the halving day. On the halving day itself, it was at $5.55 and then climbed to $7.75.
Recently, Hut 8’s stock has been affected by a decline in Bitcoin’s value, but it seems to have reached a low point around March.
Indicators like RSI, MACD, and Williams’ %R suggest it might be oversold. The last recorded stock price was $7.24, and there is hope it could reach $12.
Analysts at Craig-Hallum have recently increased their price target for Hut 8 from $10 to $12 and maintained a hold rating, noting that the new management is expected to make timely and effective decisions.
Conclusion
Investing in certain mining stocks before the Bitcoin halving event might be a smart move. Historically, Bitcoin prices tend to increase after every Bitcoin halving event.
Companies in the mining industry have been preparing by improving their technology, making their operations more efficient, or expanding to different areas. This preparation is to handle the decrease in Bitcoin rewards that miners receive after the halving. However, it’s important for investors to do their own research and think about the potential risks before making any investments.
Also Read: Bitcoin Halving 2024: A Lucrative Opportunity For Investors
