The Bitcoin halving is expected to take place in the coming days, cutting the main source of income for miners in half. As scary as it may sound, analysts say the largest publicly traded mining companies are well prepared to survive the halving and thrive, and given the recent weakness in mining stocks, investors could be dealing with a big opportunity. “We believe a bitcoin price above $60,000-$65,000 means the halving is risk-free for almost all public miners,” Needham analyst John Todaro wrote in a note Tuesday to to its customers. It currently costs miners between $36,000 and $52,700 to mine a single bitcoin, Todaro said. Meanwhile, even after bitcoin’s plunge last weekend, the cryptocurrency is still trading above $61,000. “With bitcoin hovering around all-time highs, miners are seeing attractive margins,” the analyst added. “For margins to compress significantly, we would need either Bitcoin prices to drop below $50,000 or the hash rate to increase significantly by $800. [to] EH+.” The hash rate, measured in exahash and currently around 623, is used to determine the mining difficulty of the Bitcoin network. The higher the rate, the greater the expense for miners. Mining stocks fell This year, with investors trailing profits by half after a meteoric rise last year, Marathon Digital, CleanSpark, Iris Energy and Cipher Mining all fell into the red amid the volatility. bitcoin after soaring 300% to 600% in 2023. Miners offer amplified exposure to bitcoin’s price The stock, which has been more volatile since the launch of Bitcoin exchange-traded funds, introduced more leverage to the. market Nevertheless, the price of Bitcoin has more than doubled in the last year, climbing 110%, which has helped the investment efforts of miners “Large public mining companies are currently in a much better situation. than in previous cycles,” said Mike Colonnese, an analyst at HC Wainwright. “They have much stronger cash balances, they’re increasing their bitcoin reserves. There’s a lot more liquidity in that halving. Plus, a lot of bigger players have placed these big buy orders with Bitmain. [and] MicroBT to truly improve the efficiency of its fleet to reduce operating costs. Colonnese’s top picks for halving are CleanSpark and Iris Energy, citing high efficiency levels. According to JPMorgan, CleanSpark mined the most bitcoins per exahash in March. Todaro highlighted Riot, Cipher and Bitdeer, because it “prefers low-cost bitcoin producers.” The halving occurs every 210,000 blocks mined, or approximately every four years. Typically, it starts a new cycle for bitcoin and sets the stage for. a new bull This year, however, bitcoin is already well into the current cycle as it approaches the halving and reached new all-time highs in March – something it had never before. made before the halving “This propelled bitcoin to a threshold where. miners really generate a healthy economy,” Colonnese said. — CNBC’s Michael Bloom contributed reporting.
