Bitcoin miners need BTC price over $98K by the halving — Analysis
Predictions that Bitcoin (BTC) will see a six-figure price by the end of 2024 continue to surface despite the BTC price losing the $30,000 level recently.
For publicly-listed Bitcoin miners, in particular, a price north of $100,000 may be more of a necessity than a forecast if their business models are to remain profitable.
Bitcoin mining stocks have been on a tear this year, outperforming BTC by a wide margin in recent months. While BTC has seen reduced volatility and a period of consolidation, Bitcoin mining companies’ stocks have risen by nearly 100% in a matter of months.
A recent report by Seeking Alpha explores BTC mining by examining one popular miner in particular: Riot Platforms.
It notes that despite Riot being expected to triple its mining capacity in 2024, the company and Bitcoin miners, in general, could face serious headwinds from the halving. A 50% decrease in BTC block rewards cuts miners’ main source of revenue in half.
Miners like Riot can also issue new equity shares to fund their operations. This dilutes existing shares, meaning that even if the company’s underlying fundamentals are sustained, the share price may not keep up.
Related: $160K at next halving? Model counts down to new Bitcoin all-time high
Combine this with the fact that many miners could already be overbought at current valuations, and things don’t look too rosy for public Bitcoin mining stocks. Although public mining stocks have outperformed Bitcoin in 2023, an increase in BTC being sent to exchanges could indicate a decline in momentum.
A big increase in Bitcoin’s price will therefore be required for miners to remain profitable at today’s hash rate levels.
Bitcoin miners have had a banger of a year.RIOT is up 457%MARA is up 421%BITF is
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