Over the last few weeks, Bitcoin (BTC-USD) rallied from about $40,000 to a high of $71,410. All thanks to an upcoming Bitcoin halving on April 20. Better, each previous halving has been followed by a BTC price increase before and after the events in 2012, 2016 and 2020. Plus, we’re seeing far more investors jump into Bitcoin out of fear of missing out. We’re also seeing growing interest in Bitcoin mining stocks.
As noted by Investing.com, “Bitcoin’s best days are yet to happen as the ETF-driven market fuels fears of missing out, Bernstein analysts said in a note. In this context, they believe BTC is well-placed to soar to new record highs.”
Granted, the halving event will reduce the reward Bitcoin miners receive, which can decrease profitability. However, if the price of Bitcoin increases enough, it can offset the cut reward.
In addition, according to Holland & Knight, “Mining firms are focusing on efficiency and lean operations to remain profitable in the harsher economic landscape post-halving. They are gearing up for the halving event by upgrading to more efficient equipment (i.e., low energy costs) and buying up more mining facilities.”
That being said, investors may want to consider BTC mining stocks.
Marathon Digital (MARA)
The last Bitcoin halving event was on May 11, 2020. Around that time, Marathon Digital Holdings (NASDAQ:MARA) was just starting to bottom out at around 52 cents. Heading into the May halving event, MARA was up to about 72 cents. From there, it rocketed to a high of $44.35.
Before that event, the 2016 BTC halving event was on Jul 9. Beforehand, MARA traded at around $30.77. Heading into the halving, MARA was up to $45. Following the event, MARA jumped to a high of $48.48 though it subsequently fell to about $2.50 per share.
The 2012 halving even occurred on Nov. 28. Around that time, MARA traded at about $104 and would rally to a high of $143.84 by 2015.
Nowadays, as we near the halving on April 20, MARA is oversold at double bottom support around $19.41. It’s also over-extended on RSI, MACD, and Williams’ %R indicators. From its current price of $19.41, I’d like to see it rally back to $32.87 prior to the halving date.
Riot Platforms (RIOT)
Ahead of the May 2020 BTC halving, another top BTC mining stock Riot Platforms (NASDAQ:RIOT) was just bottoming out at around 95 cents. By the halving date, it was up to about $1.70. Then it soared to a high of $52.73. Ahead of the 2016 halving, RIOT traded around $2.84. By the halving date, it was above $3. By the end of 2017, it was up to $24. In 2012, RIOT fell much like MARA did.
Ahead of next month’s halving, RIOT is also oversold, and over-extended on RSI, MACD, and Williams’ %R indicators. From its last price of $11.43, I’d like to see it again challenge $18 per share.
Helping, “Riot mined a total of 418 Bitcoin in February,” said Jason Les, CEO of Riot. “During the month, we also announced a new purchase order with MicroBT for 31,500 miners to be installed at our Rockdale Facility. The installation of these miners will increase our mining efficiency and uptime, and will further expand the hash rate capacity at our Rockdale Facility to 15.1 EH/s. Approximately 17,000 of the miners in this order will be used to replace miners that are not performing to our expectations.”
Hut 8 Mining (HUT)
Much like we saw with Marathon and Riot ahead of and after Bitcoin halving events, Hut 8 Mining (NASDAQ:HUT) saw similar stock activity in 2020. In fact, around the 2020 halving, HUT traded at around $4.78. By May 11, it was up to $5.50. By 2021, it was up to $65.
And again, much like MARA and RIOT, it’s oversold at $7 at the moment. It’s also starting to pivot from over-extensions on RSI, MACD, and Williams’ %R. And from its current price of $7.79, I’d like to see it initially challenge $11 again shortly.
Moving forward, we’ll get a better idea of what’s happening with earning on Mar. 28. In addition, analysts at Needham just initiated coverage of HUT with a buy rating.
The company’s diversification strategy “bodes well into the Halving when self-mining revenues decline industry-wide,” Needham said, as quoted by Seeking Alpha. Another factor stoking its investment bull case includes “near-term fleet efficiency gains, which it expects to lower HUT’s production costs.”
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
