watch
now
The
Bitcoin
network
on
Friday
evening
completed
its
fourth
“halving,”
reducing
the
rewards
earned
by
miners
to
3.125
bitcoins
from
6.25.
The
price
of
bitcoin
has
been
volatile
ahead
of
the
event,
and
fell
about
4%
this
week
to
trade
around
$64,100,
according
to
Coin
Metrics.
Mechanically,
the
halving
itself
shouldn’t
affect
the
price
of
bitcoin
in
the
short
term,
but
many
investors
are
expecting
big
gains
in
the
months
ahead,
based
on
the
cryptocurrency’s
performance
after
previous
halvings.
After
the
2012,
2016
and
2020
halvings,
the
bitcoin
price
ran
up
about
93x,
30x
and
8x,
respectively,
from
its
halving
day
price
to
its
cycle
top.
The
event
is
a
big
test
for
mining
companies,
however.
“All
else
equal,
the
halving
will
cut
industry
revenues
in
half,
triggering
a
wave
of
consolidation
and
business
closures,
while
(hopefully)
rationalizing
the
network
hashrate
and
industry
capex,
which
is
ultimately
good
for
the
remaining
operators,”
JPMorgan
analyst
Reginald
Smith
said
in
a
recent
note
to
investors.
Hash
rates
are
a
measure
of
the
computational
power
used
to
process
transactions
on
the
bitcoin
network.
The
larger
a
miner’s
hash
rate,
the
greater
of
a
revenue
opportunity
it
has.
Mining
stocks
have
been
volatile
in
the
days
leading
up
to
the
event.
Many
are
down
by
double
digits
for
the
year,
after
rallying
between
about
300%
and
600%
in
2023.
Riot
Platforms,
for
instance,
is
down
about
41%
in
2024
through
Friday’s
close,
but
it
surged
356%
in
2023.
“The
market
so
far
has
seen
bitcoin
mining
stocks
as
mere
BTC
proxies,
in
absence
of
bitcoin
ETFs,”
said
Bernstein
analyst
Gautam
Chhugani.
“[The]
halving
would
further
differentiate
the
low
cost,
high-scale
consolidating
winners
vs.
rest
of
smaller
miners
which
may
be
disadvantaged
post-halving.”
Mining
stocks
in
2023
and
2024
|
2024 YTD |
2023 return |
|
|---|---|---|
|
MARATHON DIGITAL (MARA) |
-30.2% | 586.84% |
|
RIOT PLATFORMS (RIOT) |
-41.08% | 356.34% |
|
CLEANSPARK (CLSK) |
54.4% | 440.69% |
|
IRIS ENERGY (IREN) |
-31.68% | 472% |
|
CIPHER MINING (CIFR) |
-7.63% | 637.50% |
Still,
speculators
may
still
trade
on
the
event.
Another
JPMorgan
analyst,
Nikolaos
Panigirtzoglou,
said
Thursday
that
he
expects
the
near-term
bitcoin
price
to
fall
after
the
halving,
citing
overbought
conditions
and
prices
that
are
still
above
the
cryptocurrency’s
comparison
to
gold
when
adjusted
for
volatility.
He
also
pointed
to
subdued
venture
capital
funding
of
crypto
projects.
Analysts
at
Deutsche
Bank
have
a
similar
view.
“[The]
Bitcoin
halving
is
already
partially
priced
in
by
the
market
and
we
do
not
expect
prices
to
increase
significantly
following
the
halving
event,”
the
firm’s
Marion
Laboure
said
in
a
note
Thursday,
adding
that
it
“has
been
widely
anticipated
in
advance
due
to
the
nature
of
the
Bitcoin
algorithm.”
“Looking
ahead,
we
continue
to
expect
prices
to
stay
high,”
she
added,
citing
expectations
of
future
spot
Ethereum
ETF
approvals,
future
central
bank
rate
cuts
and
regulatory
developments.
Bitcoin
is
currently
trading
at
just
under
$64,000,
roughly
13%
off
its
March
14
all-time
high
of
$73,797.68.
