From Nasdaq.: 2024-04-01 12:33:16

The upcoming Bitcoin halving in April 2024 is expected to impact the crypto market significantly, affecting price dynamics and mining operations. Two crypto mining stocks may see decreased revenue post-halving due to fewer bitcoins earned with the same computing power, along with shareholder dilution and decreasing Bitcoin production. MicroStrategy, known for holding Bitcoin aggressively, recently dropped in stock price after launching a $500 million convertible note offering.

MicroStrategy currently holds around 1% of all Bitcoins, leading to concerns of overvaluation by short seller Kerrisdale Capital. The company’s stock price is considered inflated due to its valuation of Bitcoin assets at $177,000 per token, higher than current market prices. Kerrisdale suggests MicroStrategy’s stock deserves a lower valuation than its current price.

Argo Blockchain, another crypto miner, experienced a 20% decrease in daily Bitcoin output in January, leading to a drop in mining income. Factors like reduced transaction fees and network difficulty contribute to a challenging operating environment for miners. Shareholder dilution is also a concern, with a significant increase in issued shares since 2018.

Iris Energy, facing a slowdown in Bitcoin production, mined fewer bitcoins in February despite higher revenue due to a higher hash rate and increased Bitcoin price. The company also relies on share issuances for growth, with a significant increase in outstanding shares compared to June 2019. Companies like Riot Blockchain and Marathon Digital Holdings, with significant Bitcoin holdings, may be more appealing investments than Iris Energy due to their exposure to a potential rise in Bitcoin post-halving.

Read more at Nasdaq: 3 Stocks to Ditch Following the April Bitcoin Halving