These Bitcoin Mining Stocks Hit Their Stride Ahead of 2024 Halving

3 months ago 34

As the 2024 Bitcoin halving approaches, investors are keenly observing the stock price movements of key players in the Bitcoin mining industry.

Stocks like Marathon Digital Holdings (MARA), Riot Platforms (RIOT), and CleanSpark (CLSK) are navigating the tides while optimizing their strategies in anticipation of the 2024 halving.

Marathon Digital: A Sprint Ahead

Marathon Digital Holdings, a front-runner in the Bitcoin mining race, witnessed its stock rally by over 45% since the start of February.

In preparation for the Bitcoin halving, Marathon has intensified its mining operations, targeting maximum BTC extraction. December 2023 marked a record month for the company, mining 1,853 BTC. This is a 56% increase from November and a staggering 290% year-over-year rise.

Fred Thiel, CEO of Marathon Digital, attributes this growth to advancements in hash rate and operational efficiency.

Despite selling 704 BTC in December to cover operational costs, Marathon’s aggressive strategy is evident in its total holding of 15,174 Bitcoin as of year-end. Marathon’s stock price reflects this upward trend, closing near a 2-year high of $27.28 on February 12.

Thiel commented on his strategy for the upcoming halving:

“We believe that optimizing our costs through the benefit of some of the opportunities that will be available, post halving here, will enable us to continue to drive costs down significantly.”

Riot Platforms’ Rocky Road

Riot’s journey in 2024 has been turbulent. Starting the year near $16, the stock experienced a sharp decline, dropping below $10 by January 19.

However, a subsequent rebound saw it climb back to the $16 mark, buoyed by Bitcoin’s price surge above $50,000. Despite these gains, Riot faces challenges.

The company’s primary expenses, including electricity, hosting, and depreciation of mining gear, are escalating. Riot’s expansion strategy, aiming for a hash rate of 100 EH/s, could potentially double its equipment depreciation costs post-halving.

The cost per Bitcoin mined by Riot has alarmingly risen from $44,400 in Q4 2021 to $110,000 in Q3 2023, with the halving potentially tripling this figure to an unsustainable $183,000.

Crypto analyst Jason A. Williams commented on this phenomenon:

“The event, not as ruthless. Not as unforgiving to inefficient miners. Block fees are at or exceeding the block reward.”

CleanSpark’s Expansion Amidst Challenges

CleanSpark has recently shown remarkable growth, with its stock surpassing the $16 mark. This performance is its best since late 2021, when Bitcoin was cooling off from its all-time high of $69,000.

CleanSpark is aggressively expanding its operations. This includes acquiring three Bitcoin mining facilities in Mississippi for $19.8 million, boosting its hashing capacity.

CEO Zach Bradford emphasizes the company’s commitment to geographic diversity and operational success. Bradford stated:

“With the addition of Mississippi to our portfolio, we are gradually increasing our geographic diversity and expect to apply our proven track record of success in this new and exciting operating environment.”

However, CleanSpark’s ambitious growth comes amid growing political scrutiny of Bitcoin mining in the US, with the Energy and Information Administration focusing on crypto miners’ electricity usage.

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