Bitcoin mining stocks will be in the spotlight this week as investors focus on last Friday’s Bitcoin halving event that slashed the rewards offered to miners. BTC price reacted mildly to the event since it was already priced in by market participants. It was trading at $65,000 on Monday morning, where it has been in the past few days.
Bitcoin mining companies will go through a challenging period as the number of coins they mine is expected to drop after halving. As a result, these companies need three things to happen. First, they need the price of BTC to continue rallying to compensate for the mined volume.
History is in their side since Bitcoin price tends to rally in between the halving event. If the trend continues, there is a likelihood that the price will be above $100k ahead of the next halving.
Second, these companies need to reduce their mining power. In most cases, companies that control their power sources and those that are in low-cost jurisdictions will be better positioned to grow their profits.
Third, BTC mining firms will need to have access to newer machines since that will lead to more mined coins. So, here are the best Bitcoin mining stocks to buy after the halving.
Bitdeer Technologies
Bitdeer Technologies (BTDR) stock price has collapsed by over 38% this year as investors waited for the next halving event. The main benefit for the company is that it has boosted its machines in anticipation of the halving event and that it has lower costs than other firms.
Bitdeer, which is a Bitmain spin-off, has increased the number of mining machines under management to over 226k up from 189k in January last year. As a result, the number of self-mined Bitcoins rose to 294 in March, up from 229k in March last year.
Further, the company has some of the lowest average power cost of about $0.04 per hour. Also, it has diversified its revenue sources to data centers and AI. The company’s total revenue rose to $368 million in 2023 while its net loss reduced to $56.7 million.
Riot Platforms
Riot Platforms (RIOT) is one of the best Bitcoin mining companies in the market with a market cap of over $1.7 billion. Its stock has crashed by over 40% this year as concerns about the impact of mining continues.
Investors are aware that the average cost of Bitcoin produced per day has not been growing. The company mined 425 coins in March this year, up from 695 in March 2023. The average BTC produced per day stood at 13.7, down from 22.4 in March last year.
Still, Riot Platforms has room to grow its mining operations, helped by its strong balance sheet that is made of cash and BTC. It is also lower costs of mining than other companies like Marathon Digital.
Marathon Digital
Marathon Digital stock price has retreated by 29% this year. Still, I believe that it has room to recover if the price of Bitcoin recovers. Unlike most other companies, it has boosted its production in the past few months. It mined 894 coins in March this year, up from 825 in the same month in 2023. The average coin mined per day rose to 28.8, helping it boost the number of blocks won.
Marathon Digital has a strong balance sheet with over $357 million in cash. It also has room to boost its cash reserves in the coming months. The challenge, however, is that the cost to mine a Bitcoin is higher than companies like Riot and CleanSpark.
There are other Bitcoin mining companies to consider. In addition to RIOT, MARA, and Bitdeer, other firms to consider are the likes of Bitfarms and CleanSpark.
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