Within the next 24 hours, Bitcoin will undergo its halving event in 2024 within the crypto marketplace. This significant occurrence has sparked optimistic feelings among investors, as numerous cryptocurrencies are anticipated to surge. Amidst the excitement surrounding digital currencies, there is also growing curiosity regarding the potential consequences for the mining sector.
The forthcoming Bitcoin halving will cause a decrease in miner rewards from 6.25 Bitcoins to 3.125 Bitcoins per block, primarily impacting the income of miners and potentially shaping the broader cryptocurrency market.
Experts and analysts are optimistic about Bitcoin’s price increase, but some investors remain cautious due to the unpredictable nature of cryptocurrencies. To mitigate risk, these investors can consider purchasing stocks of Bitcoin mining companies instead of investing directly in Bitcoin itself. This approach allows them to enjoy potential profits from Bitcoin’s growth.
In simple terms, let me share with you some striking stocks worth looking into, taking into account their recent achievements, competitive advantages, and growth plans.
1. Riot Platforms (RIOT)
Although Riot Platforms experienced a disappointing beginning in 2024 with a dramatic drop in prices, the company has since bounced back strongly, earning substantial profits as Bitcoin’s value soared. Riot aims to enhance its hash rate capacity to an impressive 100 exahashes per second (EH/s). However, this expansion is expected to lead to a considerable increase in equipment depreciation costs (EDC), roughly doubling the current expenses.
Recently, Riot Platforms (NASDAQ:RIOT) has experienced a slump due to Bitcoin’s significant decrease in value. Over the past few weeks, the price of RIOT stock fell from approximately $18 to $8.06, and it continues to decline.
Experts argue that the potential crash in RIOT is imminent due to increasing military tensions in the Middle East.
According to certain sources, RIOT, similar to MARA, may experience a robust comeback following cryptocurrency halving events due to its impressive historical background.
Prior to the 2020 Bitcoin halving, RIOT’s price hovered around $0.95. Following the event, there was a noticeable increase to $1.70. Subsequently, the stock soared to an impressive high of $52.73. This trend underscores the beneficial impact of Bitcoin halving on mining stock prices.
Prior to the 2016 bitcoin halving, its price was already above $3. By the end of that year, it had reached $3.79. A dramatic increase followed, with the price soaring up to $33.27 by late 2017. In contrast, RIOT’s price hovered around $19 leading up to the 2012 halving. Immediately after the event, its value dipped to $14.55 but soon rebounded, sitting at approximately $20 by December.
Bitcoin halvings have a favorable impact on RIOT, potentially generating profitable gains for its investors.
2. CleanSpark (CLSK)
CleanSpark is renowned for its dedication to sustainability and reliance on renewable energy. Lately, the company has broadened its reach into regions such as Texas and Georgia. The objective behind this expansion is to take advantage of advanced mining technologies and enhance computing power.
In simple terms, the stock price of CleanSpark (CLSK) has been bouncing around quite a bit due to the unpredictable cryptocurrency market. By mid-April 2024, the stock was hovering around $14.48, with a small decline day-to-day but an overall upward trend in the yearly assessment. This represents a significant rise of 35.3% from the beginning of the year when its price was only $11.03.
Based on the opinions of several analysts, the predicted prices for CleanSpark stocks range from different values. On average, they anticipate a price of $19.22, indicating a possible increase of approximately 33% from the present market value.
Analysts predict the maximum price for the stock at $27.00, suggesting substantial growth prospects if market circumstances are advantageous post-Bitcoin’s 2024 halving. The overwhelmingly positive outlook is validated by most analysts advocating to buy or strongly buy this stock.
In terms of finance, CleanSpark has delivered conflicting figures. While their annual revenue grew to reach $168.41 million, they reported a substantial net loss of $136.59 million. This loss indicates some difficulties in achieving profitable growth as they expand their operations. The stock is currently valued at a price-to-sales ratio of 17.55, suggesting that investors anticipate significant growth from the company.
Lately, they have broadened their mining operations with the expectation of boosting their computational power and possibly achieving improved financial results down the line.
3. Marathon Digital (MARA)
Marathon Digital was included in the list for its high level of productivity and extensive size, managing one of the biggest Bitcoin mining operations in terms of capacity.
The crash in the stock market caused a chain reaction that significantly decreased the worth of Marathon Digital (NASDAQ: MARA) as well.
Lately, Marathon Digital’s share price plummeted from approximately $25 to $14.60, predominantly as a result of Bitcoin’s decline in value caused by geopolitical turmoil in the Middle East.
Yet, some may view this as a potential purchasing moment. Should the tension lessen, Bitcoin’s value may rebound, benefiting mining companies such as Marathon Digital in the process.
Based on historical data, Marathon Digital has shown strong growth following Bitcoin halving events. For instance, in May 2020, after the halving on the 11th, the company’s stock price jumped from $0.52 to $44.35. Similarly, in 2016, the stock price rose from $30.77 to $48.48 around the time of the halving. Even after the 2012 halving, which initially caused a drop in Marathon Digital’s stock, it eventually rebounded and reached $116 by late 2014.
4. Bitfarms (BITF)
Bitfarms is actively purchasing mining equipment with the goal of reaching a hashrate of 21 Exahashes per second by the year 2024. In doing so, they aim to enhance energy efficiency. This growth in mining hardware represents a strategic move in anticipation of their post-Bitcoin halving operations in 2024.
This mining business keeps costs low, producing a Bitcoin at an affordable price of $16,200. Owning 806 Bitcoins and extracting 9.2 more each day, the profitable venture stands to gain even greater earnings, especially in periods of rising Bitcoin values.
Bitfarms announces intentions to enhance and enlarge its operations, targeting a hash rate of 21 exahashes per second and an energy efficiency of 21 watts per terahash by the year 2024.
The Bitcoin Halving, which cuts in half the rewards given to miners, is predicted to dramatically boost Bitcoin’s price. This might lead to increased earnings for mining businesses such as Bitfarms.
Bitfarms Ltd. (BITF) has been drawing interest for its strong growth during Bitcoin’s halving in 2024, according to current stock analyses. Analysts have collectively given Bitfarms a “Buy” recommendation with predicted prices ranging from $4.00 to $5.00. This indicates significant potential for upward movement from the current price of around $1.71 in mid-April 2024. The average forecasted price of $4.25 suggests a possible increase of approximately 148.54%.
5. Hut 8 Mining (HUT)
Hut 8 Mining, located in Canada, is a prominent player in the Bitcoin mining industry. To support its business activities, particularly following Bitcoin’s halving periods, it has been focusing on increasing its power resources. Despite reporting a modest income in the year 2023, the company maintains a strong financial stance.
Hut 8 Mining is viewed as a worthwhile investment option for Bitcoin mining stocks. Despite not being publicly listed during the 2012 and 2016 Bitcoin halvings, they took part in the 2020 event.
Prior to the Bitcoin halving in May 2020, its price had dipped down to roughly $2.94 but surged to around $7 just before the event. On the day of the halving itself, the price was at approximately $5.55 and subsequently reached $7.75.
Lately, Bitcoin’s decreasing value has impacted Hut 8’s stock price, and it appears this downward trend hit its lowest point approximately in March.
Based on technical indicators such as RSI, MACD, and Williams’ %R, the stock may be undervalued at its current price of $7.24. It’s possible that the stock could rise and approach the hoped-for price of $12.
Analysts at Craig-Hallum have raised their predicted price for Hut 8 from $10 to $12 while keeping a neutral stance. They believe the new leadership will act swiftly and wisely.
Conclusion
Buying mining company stocks prior to a Bitcoin halving could be a profitable decision, as historical data shows that Bitcoin’s price typically rises following each halving event.
In the mining sector, businesses are getting ready for the upcoming reduction in Bitcoin rewards for miners through advanced technology upgrades, enhanced operational productivity, or entering new territories. This proactive approach is aimed at coping with the halving-induced decrease in miners’ revenues. Yet, it’s crucial for investors to meticulously examine the market and contemplate potential risks before making any investment decisions.
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2024-04-19 10:07