Key Points
- Bitcoin enthusiasts await the April 19 halving event, renowned for its impact on cryptocurrency markets.
- Leading up to the halving, the cryptocurrency market has experienced a significant pullback, with Bitcoin's price dropping 10% over five days and 3.5% in the last month.
- The YTD performance of five major Bitcoin-related stocks - iShares Bitcoin Trust, MicroStrategy, Riot Platforms, Marathon Digital and CleanSpark - has been mixed.
Bitcoin enthusiasts eagerly anticipate the upcoming halving event, scheduled for April 19, as it marks a pivotal moment in the cryptocurrency ecosystem. Since its inception, this event, ingrained into Bitcoin's protocol, has historically triggered significant market movements. Past halvings in 2012, 2016 and 2020 have been accompanied by significant price fluctuations, shaping Bitcoin's trajectory.
As anticipation builds for the impending halving, the cryptocurrency market is experiencing a notable pullback. Over the past five days, Bitcoin's price has plummeted by over 10%, and within the last month, it has dipped by nearly 3.5%, namely due to risk-off circumstances as tensions in the Middle East rise. However, despite this short-term decline, Bitcoin maintains a YTD performance of up over 42%.
The halving is poised to diminish mining rewards from 6.25 to 3.125 Bitcoin per block, adhering to the predetermined algorithm outlined in Satoshi Nakamoto's 2008 white paper. With Bitcoin's mining rate operating steadily, these halving events occur approximately every four years, fostering an environment of scarcity and upward price pressure. As the countdown to the April halving intensifies, attention shifts towards assessing the performance of prominent Bitcoin-related stocks amidst this backdrop of anticipation and volatility.
5 Bitcoin-Related Stocks Ahead of the Halving
1. iShares Bitcoin Trust
iShares Bitcoin Trust NASDAQ: IBIT is arguably the most popular Bitcoin spot ETF. The ETF is provided by Blackrock, the world's largest ETF provider, and offers investors access to Bitcoin through a traditional brokerage account. After a brief decline following its listing, the ETF, along with its underlying, surged to record heights and broke several ETF records, especially regarding volume traded. Due to the risk-off environment and geopolitical landscape, the ETF has decreased over 12% over the last five days and almost 11% over the month. Like Bitcoin, however, the ETF remains up close to 42% on the year.
2. MicroStrategy Inc.
MicroStrategy Inc. NASDAQ: MSTR, a corporate enterprise software maker whose overall strategy also includes purchasing large amounts of Bitcoin, held just over 214,000 Bitcoin as of March 18. The company has a market capitalization of over $21 billion and a P/E of 44.53. Its stock has been particularly volatile in recent years, with a 52-week high of almost $2000 and a low of $266. More recently, the stock is down nearly 30% over the last month.
3. Riot Platforms Inc.
Riot Platforms NASDAQ: RIOT is a U.S.-based Bitcoin mining company. Although the company is related to Bitcoin, its stock has lagged severely behind the digital asset, falling almost 50% YTD. Many industry experts have voiced concern for Bitcoin mining companies ahead of the halving event, as the reward for Bitcoin produced is set to diminish. Despite the bearish sentiment and severe underperformance, analysts remain bullish on the stock. RIOT has a Buy rating based on nine analyst ratings and an impressive consensus price target forecasting over 130% upside.
4. Marathon Digital Holdings Inc.
Marathon Digital Holdings NASDAQ: MARA, headquartered in Las Vegas, focuses its efforts on Bitcoin mining operations. Despite its direct association with Bitcoin, the company's stock has encountered significant challenges in the market, witnessing a notable downturn YTD, with a decline of over 37%. This decline reflects the broader volatility experienced within the cryptocurrency sector. Notably, MARA maintains a healthy short interest of 16%, suggesting varying sentiments among investors regarding its future trajectory. Analysts maintain a cautious outlook on Marathon Digital Holdings, with a consensus Hold rating.
5. CleanSpark Inc.
CleanSpark NASDAQ: CLSK is another Bitcoin mining company focusing on the Americas. Like several of the names mentioned above, CLSK has an above-average short interest of 13% and has fallen considerably from its 52-week high, now down over 41%. Despite the dramatic fall, the stock remained up over 20% during the year; however, it is trading below a critical support area of $15.
With average gains of 150% since the start of 2023, now is the time to give these stocks a look and pump up your 2024 portfolio.
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