As I write this it is expected that the next Bitcoin (BTC-USD) halving will occur in 51 days. Predicting the exact date is difficult given that it occurs after each additional 210,000 blocks are mined. Regardless, that threshold is expected to occur in April, which will increase its scarcity and the price of Bitcoin stocks, leading to stocks that will benefit from Bitcoin halving.
Historically, Bitcoin halvings have been associated with increases in BTC price as the supply becomes more limited. Miners currently receive 6.25 BTC per block mined. After the 840,000 block threshold is passed, each block then yields 3.125 BTC. It will become more difficult to secure Bitcoin and thus, the next halving should result in higher prices.
Investors can place their capital directly into Bitcoin as one method of attempting to secure such gains. Bitcoin stocks are another method to pursue so let’s discuss them.
MicroStrategy (MSTR)
MicroStrategy (NASDAQ:MSTR) is the largest corporate owner of Bitcoin today. The company provides enterprise analytics software, but it’s hardly the reason investors are interested in the company and its stock.
Investors are actually keen on the stock because of the 193,000 BTC it holds. It’s a simple investment that has been popular lately.
MicroStrategy purchased its $193,000 Bitcoin at an average price of $31,544. Prices are currently approaching $63,000 per coin. That has pushed the value of its investment past $10 billion, resulting in massive unrealized profits.
It has also caused investors to rush to MSTR shares as the value of its treasury strategy becomes more apparent. Those shares are likely to continue rising in price as April approaches. It is highly likely that Bitcoin will soon set a new price record. MicroStrategy will continue to rise as soon as that happens.
CleanSpark (CLSK)
CleanSpark (NASDAQ:CLSK) Is one of the other two Bitcoin stocks that make the most sense as the Bitcoin halving approaches. A study by Cantor Fitzgerald found that CleanSpark and one other Bitcoin miner are the only two firms that can reach profitability at a $40,000 BTC price.
BTC prices have risen above $62,000 as I write this. That means 10 other BTC mining stocks are now profitable according to that study.
However, why choose those firms over CleanSpark? Its margin is much higher than any of the other firms, which should translate to more success.
The answer is that CleanSpark stock is more expensive than some of its less profitable competitors. Choose it anyway for the simple reason that profitability has to matter to investors at some point. Profitability correlates to longevity. CleanSpark has a much higher chance than its competition of sticking around long term. Keep it simple.
Bitdeer Technologies (BTDR)
Bitdeer Technologies (NASDAQ:BTDR) has the lowest breakeven price of any of the firms in the study. Its break-even price of roughly $17,500 is just about half of that of CleanSpark. It’s also one of the less expensive shares of Bitcoin stocks, with a price just above $7.
One of the reasons the company receives less attention than others is simple proximity. Bitdeer Technologies is headquartered in Singapore, while many of the better-known BTC stocks are stateside.
That shouldn’t be a reason to discount BTDR stock. The company mined 330 Bitcoins in January. That was an increase of $123%. Prices during that month averaged roughly $42,000 per bitcoin. Again, that is well above the firm’s breakeven price of $17,500 per Bitcoin mined. All signs indicate the company heading in the right direction. It’s also diversifying its geographic footprint to include data centers in the United States and Norway.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
