Last week, Bitcoin was trading at $72,500 before its price settled at $68,000 later in the week. Companies such as Marathon Digital and Riot Platforms Inc. (NASDAQ: RIOT) are currently prepping for the halving event, which is slated to occur on April 20, 2024.
The event will reduce the number of tokens mined daily to 450 from 900. This is primarily because Bitcoin supply is capped at 21 million tokens, so until this figure is achieved, a specific amount of Bitcoin is awarded to validators and miners.
Marathon Digital is a digital asset technology company that mines cryptocurrencies with a focus on the generation of digital assets and the blockchain ecosystem. On the other hand, Riot Platforms is a bitcoin mining company that operates through its data center hosting engineering and Bitcoin mining segments.
The companies’ CEOs recently shared insights on their strategies, with Jason Les of Riot stating that the halving would reduce revenues by one-half while doubling costs incurred by mining companies. Les explained that some miners would probably be forced to close down operations, depending on their machine efficiency and power costs, as halving would reduce the network hash rate by 5% or more, depending on Bitcoin price.
He also noted that during the previous downturn, Riot continued to build infrastructure, which positioned the company to grow its self-mining hash rate by more than 150% in 2024. As such, Les highlighted, Riot Platforms was one of the few public miners that would finish this year mining more Bitcoin daily than it was before the halving.
Fred Thiel, CEO of Marathon Digital, stated that miners would need to increase their energy efficiency after halving in order to remain profitable. He revealed that his company’s fleet had an average energy efficiency of about 24J/TH, which was expected to drop as more efficient miners were added.
On stock predictions, Marathon’s revenue has grown at an average annual rate of 937.9% over the last five years. The average one-year price target from analysts stands at $28.92, which represents an expected upside of almost 64% by 2025.
Investors are advised to examine the historical performance of a stock in comparison to a company’s peers and a benchmark index to project future results.
Marathon Digital’s shares have recorded a return of -28.9% annually, underperforming the S&P 500 index by almost 37%. This is in comparison to the 21% growth recorded overall in the Information Technology sector. The digital asset technology company has a beta of 2.14.
As of Wednesday last week, shares of Riot Platforms were up 0.5% to reach $10.05 while Marathon’s shares were trading at $17.98.
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