Predictions that Bitcoin (BTC) will reach a six-figure price by the end of 2024 continue to surface, although the BTC price recently lost the $30,000 mark.
For listed bitcoin miners in particular, a price above $100,000 could be more of a necessity than a forecast if their business models are to remain profitable.
Bitcoin Halving: Bad News for Public Miners?
Bitcoin mining stocks have soared this year, significantly outperforming BTC in recent months. While BTC has experienced lower volatility and a period of consolidation, Bitcoin mining company stocks have surged nearly 100% in just a few months.
Recent performance of popular BTC mining stocks. Source: Seeking Alpha
A recent report from Seeking Alpha examines BTC mining by examining one popular miner in particular: Riot Platforms.
It notes that while Riot is expected to triple its mining capacity in 2024, the company and Bitcoin miners in general could face serious headwinds from the halving. A 50% reduction in BTC block rewards halves miners’ main source of income.
Miners like Riot can also issue new shares to fund their operations. This dilutes existing shares, meaning the share price may not be able to keep up even if the company’s underlying fundamentals are maintained.
Related: $160,000 At The Next Halving? Model counts down to the new bitcoin all-time high
Combine that with the fact that many miners may already be overbought at current valuations and things aren’t looking too rosy for listed bitcoin mining stocks. Although public mining stocks have outperformed Bitcoin in 2023, an increase in BTC sent to exchanges could indicate a slowdown in momentum.
Therefore, a sharp increase in the price of bitcoin is required for miners to remain profitable at today’s hash rate levels.
Bitcoin miners have had a crazy year.
RIOT is up 457%
MARA is up 421%
BITF is up 337%
CLSK is up 246%
Both Bitcoin and Nvidia are up less than public miners this year — 80% and 222%, respectively.
The best way to get leveraged/high beta exposure to BTC.
h/t @zackvoell pic.twitter.com/xTsJqikh0L
— Joe Consorti ⚡ (@JoeConsorti) July 18, 2023
Miners could need six figures in bitcoin to stay afloat
How high does the BTC price have to go for miners to maintain their current valuations? The aforementioned report concludes that nearly $100,000 may be required for miners to continue as usual:
“Until bitcoin surpasses our bitcoin thesis, we see no way the bitcoin sector can get away with it. Even with RIOT’s ambitious 35 EH/s, our model suggests that Bitcoin needs to trade above $98,000 to justify RIOT’s current valuation (post-halving).”
Based on this, the report warns that “hodling” BTC mining stocks is “extremely risky” as the underlying fundamentals may not keep up with current valuations, which may not yet predict next year’s Bitcoin halving price in.
BTC price to hit $125,000 in 2024?
Meanwhile, a recent report by Matrixport, titled “Matrix on Target: Prepare for the Soaring 2024 Year-End Bitcoin Target of $125,000,” outlines how BTC could reach $45,000 by year-end and $125,000 by the end of 2024 .
The authors stress the importance of bitcoin price hitting a yearly high for the first time in a year.
This signal has always marked the beginning of a new bull market in the past:
“On June 22, 2023, Bitcoin hit a new one-year high for the first time in a year. This signal has historically indicated the end of bear markets and the start of new crypto bull markets. Previous events occurred in August 2012, December 2015, May 2019 and August 2020, with actual bull markets occurring in 2013, 2017 and 2021.”
It goes on:
“This signal was triggered four times and in all four cases the bull market fully unfolded within 12 to 18 months. If history is anything to go by, there is now a 100% chance Bitcoin will experience another massive bull market by the end of 2024 with a price target of $125,000 (+310%) based on the previous three signals.”
This six-digit bitcoin price prediction mirrors numerous others. For example, Standard Chartered predicts a Bitcoin price of $120,000 by the end of 2024. Interestingly, this is largely based on BTC miners not selling Bitcoin before the halving.
Standard Chartered predicts that Bitcoin could reach $120,000 by the end of 2024 as an expected improvement in crypto miners’ fortunes will allow them to retain more tokens https://t.co/Z9z0BbKCqS
— Bloomberg Crypto (@crypto) July 11, 2023
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risk and readers should do their own research in making their decision.
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