Bitcoin Miners’ Profit Hopes Pinned on BTC Surge Beyond $98K Before Halving Event, Analysis Shows

“Publicly-Traded Bitcoin Mining Firms Banking on BTC to Surpass $98K Before 2024 Halving to Ensure Profitability

Amidst the recent dip below the $30,000 mark, forecasts persist of Bitcoin’s ascent into six-figure territory by the close of 2024 at a value of $29,028. For publicly-listed Bitcoin mining enterprises, a price exceeding $100,000 may be less of a prediction and more of an imperative for sustaining their operational viability.

Bitcoin’s upcoming halving poses a potential challenge for these companies. While Bitcoin’s volatility has waned and consolidation has taken hold, the stocks of Bitcoin mining firms have surged, outpacing BTC itself by nearly 100% within a few months.

A comprehensive analysis conducted on the Bitcoin mining landscape, spotlighting Riot Platforms as a prime example, highlights the potential hurdles that lie ahead. The halving, which slashes BTC block rewards by 50%, could slice miners’ primary revenue stream in half.

Companies like Riot Platforms might resort to issuing new equity shares to fuel their activities, but this approach could dilute the value of existing shares, potentially decoupling share prices from underlying performance.

Adding to these concerns is the possibility of miners being overvalued at current levels, casting shadows on the prospects of public Bitcoin mining stocks. Despite their 2023 outperformance compared to Bitcoin, an influx of BTC into exchanges may indicate a dwindling momentum.

To maintain profitability in the face of current hash rate levels, a substantial surge in Bitcoin’s price becomes essential.

The Threshold for Survival: Bitcoin Mining Ventures Eyeing Six-Figure BTC Prices

To uphold their existing valuations, what magnitude must the BTC price scale? The aforementioned study posits that an approximate threshold of $100,000 could be the necessity for miners to continue business as usual:

“Unless Bitcoin’s performance outpaces our established thesis, it’s difficult to envision the unscathed survival of the Bitcoin sector. Even with RIOT’s ambitious 35 EH/s, our models suggest Bitcoin needs to trade above $98,000 to validate RIOT’s present valuation (post-halving).”

This underscores the report’s caution against “hodling” BTC mining stocks, labeling it as “extremely risky,” as the present valuations might not align with next year’s impending Bitcoin halving.

BTC En Route to $125,000 in 2024?

Meanwhile, Matrixport’s recent analysis titled “Matrix on Target: Brace for the Skyrocketing 2024 Year-End Projection of $125,000 for Bitcoin” outlines a potential climb to $45,000 by year-end, culminating in $125,000 by the close of 2024.

Significance rests on Bitcoin achieving a one-year high, an event underscored by the authors. Historically, this event has heralded the commencement of fresh bull markets:

“On June 22, 2023, Bitcoin reached a one-year peak, marking a year’s first. Historically, this signal denotes the termination of bear markets and the inception of new crypto bull markets. Analogous instances emerged in August 2012, December 2015, May 2019, and August 2020, heralding substantive bull markets in 2013, 2017, and 2021.”

They further elaborate:

“This signal has surfaced four times, and in each case, the ensuing bull market matured within 12-18 months. If history serves as a guide, it’s now a virtual certainty that Bitcoin will undergo another robust bull market by the conclusion of 2024, projecting a price of $125,000 (+310%) based on the prior three signals.”

This forecast aligns with numerous others predicting a six-figure Bitcoin price. For instance, Standard Chartered forecasts a $120,000 Bitcoin value by 2024’s conclusion, notably grounded in the presumption of BTC miners withholding their Bitcoin sales before the halving event.”