As per the recent analysis, Bitcoin miners might need the BTC price to climb to over $98,000 by the time of the next halving to stay profitable. Despite fluctuations and recent dips below the $30,000 mark, there is a continuous shimmer of hope that BTC will see a six-figure price by the end of next year.
For publicly-listed Bitcoin miners, such a price leap may be more of a necessity than a lofty prediction. Despite the steady rally of Bitcoin mining stocks which have managed to outperform BTC in recent months, a sharp decrease in BTC block rewards due to the halving potentially imperils miners’ revenue sources.
Consider the case of Riot Platforms, Inc. Despite the expectation that the company will triple its mining capacity by 2024, Riot and other Bitcoin mining entities may face stiff winds from the anticipated halving. Additional pressures to their business models include the issuing of new equity shares to fund operations. It dilutes existing shares, so, even if the companies’ fundamentals remain positive, share prices may suffer.
Digital miners find themselves teetering on a slim line of sustainability as their valuations compound the potential impact of the coming Bitcoin halving. While mining stocks have outperformed Bitcoin in 2023, a surge in BTC being sent to exchanges could result in a decline in momentum, necessitating a substantial price increase for miners to remain profitable.
So, merely how high does the BTC price need to go for miners to maintain their current valuations? The report concludes that a figure close to $100,000 may be required for them to maintain business as usual. But holding onto Bitcoin mining stocks is fraught with risk, as current valuations may not factor in the effect of the halving.
On the brighter side, Matrixport’s recent report titled “Prepare for the soaring 2024 year-end Bitcoin target of $125,000” predicts a potentially significant increase in Bitcoin price. The report draws attention to the magnitude of Bitcoin’s price reaching a one-year high for the first time in a year, often a precursor to new bull markets.
Standard Chartered is another financial institution forecasting a $120,000 Bitcoin price by the end of 2024, based largely on the premise of Bitcoin miners holding onto Bitcoin until the halving.
In conclusion, the landscape for Bitcoin miners could potentially be challenging, given the approaching halving and the need for a significant increase in Bitcoin prices to prevent business sustainability concerns. Conversely, there is a shimmer of optimism with predictions pointing towards a bull run and a potential six-figure valuation of Bitcoin.
Source: Cointelegraph
