Bitcoin Mining Stocks Soar Ahead of Halving

Although the broader market has felt some shocks, Bitcoin mining stocks continue to thrive, drawing significant interest from all sides.

Cipher Mining (CIFR) has witnessed stellar growth in 2023, CIFR clocking almost 400% in gains since the start of the year. In fact, many of the stocks pegged to Bitcoin mining endeavors, including Riot Blockchain (RIOT), Bitfarms (BITF), Iris Energy (IREN) and CleanSpark (CLSK) have performed better than the underlying BTC throughout ‘23.

Price Change of Popular Bitcoin Mining Stocks: June 1 - July 15, 2023

Source: Seeking Alpha

Institutions eyeing mining stocks

Institutional players are weighing the benefits of holding mining stocks, by comparing the yields to their traditional investment vehicles. Even though they are starting to see Bitcoin mining stocks as an enticing alternative to direct Bitcoin investment, BTC’s inherent volatility continues, or at least should, be cause for more caution.

Despite a recent 10% dip in Bitcoin’s value, its annual gains still stand at 50%. With Bitcoin’s dropping price, however, miners everywhere may find themselves in hot water. To avoid being in the red, publicly-traded Bitcoin mining stocks will need the BTC price to grow considerably before the highly-anticipated BTC halving event in 2024.

A simple fact is that a 50% decrease in BTC block rewards cuts miners’ main source of revenue in half. This may create serious obstacles to Bitcoin mining companies, and the firms would need to act quicker than ever to avoid deep losses.

Sources:

https://www.coindesk.com/markets/2023/07/26/public-mining-companies-offer-better-than-bitcoin-price-exposure-in-2023/

https://seekingalpha.com/article/4619872-riot-platforms-ambitious-expansion-to-be-overshadowed-by-2024-bitcoin-halving

https://cointelegraph.com/news/bitcoin-miners-btc-price-98k-halving