Bitcoin and crypto stocks saw mixed results in first half of 2024
From Nasdaq.
July 14, 2024 09:37:00 AM:
In the first half of 2024, Bitcoin saw a 44.2% gain thanks to the introduction of spot Bitcoin ETFs and a halving of mining rewards on April 19. MicroStrategy’s stock surged 118.1%, while other miners like Marathon and Riot Platforms saw market value drops due to the rewards halving impact. CleanSpark bucked the trend with a 44.6% return by acquiring new mining facilities and achieving profitability in Q1 and Q2.
CleanSpark’s success in the crypto market was driven by acquiring new mining facilities across the US and consistently beating Wall Street’s earnings estimates. The company holds a significant amount of cash reserves and Bitcoin, positioning it well to weather the lower production rates caused by the rewards halving cycle.
Marathon followed a similar path as CleanSpark by acquiring new mining facilities and diversifying into mining the Kaspa cryptocurrency. Despite a larger machine park and international expansion efforts, Marathon uses more cash than it generates and holds a significant amount of Bitcoin, making its stock more vulnerable to market challenges.
Riot Platforms, a smaller Bitcoin miner, is aiming to increase its production capacity to 31 EH/s by the end of 2024. The company supplements its Bitcoin revenues with energy credits and is in the midst of a stock-swapping buyout of Bitfarms, which has led to uncertainty among investors and lackluster stock performance.
MicroStrategy, which holds a significant amount of Bitcoin on its balance sheet, saw its stock benefit from the rising crypto trend in 2024. The company has financed Bitcoin purchases through its software business profits and additional sources, hedging its bets on Bitcoin’s long-term success. This strategy amplifies gains during bullish periods but exposes investors to more risk in downturns.
The halving of Bitcoin’s mining rewards makes it harder for miners to run profitable operations, leading to a cycle of rising prices and increased demand for Bitcoin. This cyclical trend drives strategic moves in the industry, highlighting the importance of understanding key players who thrive under pressure. Institutional investments in spot Bitcoin ETFs are expected to further support and boost the current cycle.
Investors looking to capitalize on the Bitcoin trend can benefit from understanding the cyclical nature of the cryptocurrency and key players in the industry. While MicroStrategy has seen stock gains from its Bitcoin holdings, other miners face challenges due to the rewards halving impact. Keeping an eye on companies thriving under pressure will be key to navigating the market as it rebounds, with spot Bitcoin ETFs potentially driving further growth.
Read more at Nasdaq: Why Bitcoin and Crypto Stocks Soared or Slumped in the First Half of 2024