MARA

Bitcoin Halving Playbook: 3 Mining Stocks to Buy for Crypto Profits

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Keep an eye on Bitcoin mining stocks, especially with the halving on April 20. Granted, the halving event will halve the Bitcoin (BTC-USD) miners can earn from validating transactions. However, as we’ve seen before and after the halving events in 2012, 2016 and 2020, not only did the price of Bitcoin take off, but in most cases, so did the miners.  

Even better, CEOs are upbeat ahead of the 2024 halving, according to Bernstein analysts. The “CEOs point to miner dollar revenues at all-time highs, providing a solid cushion to miners pre-halving.” They also noted the “relatively low debt on the balance sheet.” According to the CEOs, there’s even talk of potential consolidation of miners.

In addition, “Historically high revenues will provide a ‘solid cushion to miners pre-halving,’ Bernstein said. “Some of that revenue is due to Bitcoin’s network fees. The development of new Bitcoin layer 2 platforms and NFT trading has increased Bitcoin transaction fees over the past year. This revenue stream won’t be affected by the halving. Fees now make up 10% of Bitcoin mining rewards, which has spiked to 40% in the past.”

That being said, investors may want to jump into Bitcoin mining stocks — especially on weakness.

Marathon Digital (MARA)

In this photo illustration, the Marathon Digital Holdings (MARA) logo seen displayed on a smartphone screen

Source: rafapress / Shutterstock.com

Over the last few days, shares of Marathon Digital (NASDAQ:MARA) fell from about $25 to $14.60. All thanks to Bitcoin’s pullback on Middle East tension. 

But you may want to use that weakness as an opportunity.

For one, should tensions hopefully fade, Bitcoin will bounce back and should take mining stocks such as MARA along for the ride. Historically, MARA has done well before and after the Bitcoin halving events. Look at the halving event on May 11, 2020, for example. Around that time, MARA had bottomed out at around $0.52. Heading into the event, MARA ran to $0.72. From there, it would hit $44.35.

With the 2016 halving event on July 9, MARA traded at $30.77 ahead of it. Heading into the halving, it was up to $45. After, it would hit $48.48 a share. With the 2012 event on Nov. 12, MARA traded at about $104 and would drop to a low of about $38.48. It would recover to a high of $116 by late 2014, though.

Riot Platforms (RIOT)

Person holding cellphone with website of U.S. Bitcoin mining company Riot Platforms Inc. on screen with logo. Focus on center of phone display. Unmodified photo.

Source: T. Schneider/ Shutterstock.com

Riot Platforms (NASDAQ:RIOT) hasn’t fared much better with the pullback in Bitcoin.

Over the last few weeks, RIOT fell from about $18 to $8.06 and has become a falling knife.

However, don’t write this one off either. Once tensions die off in the Middle East, hopefully soon, RIOT should come back strong. Two, much like MARA, it also has a strong history of taking off with halving events. Ahead of the 2020 halving, RIOT was just bottoming out at around $0.95. By the halving, it was up to $1.70. It would then run to $52.73.

Ahead of the 2016 halving, it was above $3. By December, it was up to $3.79. By late 2017, it was up to $33.27. With the 2012 halving, RIOT traded at around $19. Shortly after the halving, it slipped to $14.55 before recovering to about $20 by December.

Hut 8 Mining (HUT)

In this photo illustration the Hut 8 Mining logo seen displayed on a smartphone screen

Source: rafapress / Shutterstock.com

Another one of the top Bitcoin mining stocks to buy is Hut 8 Mining (NASDAQ:HUT).

While it didn’t get to participate in the 2012 or 2016 halving events, having gone public on March 8, 2018, as we saw in the 2020 halving, Hut 8 had just bottomed out at around $2.94 ahead of the having on May 5. It would hit $7 on May 8. By the day of the halving on May 11, it traded at $5.55. From there, it would rally to $7.75.

Nowadays, Hut 8 has been struggling with the Bitcoin pullback. However, it appears to have bottomed out at support dating back to March. It’s also over-extended on RSI, MACD, and Williams’ %R. Last trading at $7.24, I’d like to see it retest $12 initially.

Not long ago, analysts at Craig-Hallum raised its price target on Hut 8 to $12 from $10, with a hold rating. The firm says the new management team at HUT is poised to make the “right bets at the right time,” according to TheFly.com.

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.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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