Bitcoin’s price has soared over the last year, increasing by 150% to reach $70,282. This rise is slightly below the 158% appreciation of Las Vegas-based crypto miner Marathon Digital’s stock. However, Marathon Digital faced a setback on February 27 when it reported mixed fourth-quarter financial results, causing its stock to tumble. Despite this, the company’s stock rose a month later on March 29, becoming one of the most actively traded shares.
The emergence of Bitcoin Exchange Traded Funds in January has contributed to the increase in the price of bitcoin. Marathon Digital, which owns cryptocurrency mining machines and a data center, generated revenue of $387.5 million in 2023 — a 229% increase from the previous year. This revenue increase was driven by a rise in bitcoin production and an increase in bitcoin’s price.
In March 2024, the reward for mining new bitcoin equaled 6.25 bitcoin plus transaction fees. The reward for mining bitcoin halves roughly every four years, with the next halving expected to occur around April 19. While the impact of the halving on Marathon’s revenues is unclear, historical data suggests that it could lead to an increase in bitcoin’s price.
Marathon Digital’s stock fell by 12% after reporting mixed fourth-quarter results, with revenue of $156.8 million and adjusted losses per share of 2 cents. Despite this, analysts expect Marathon Digital to benefit from the upcoming halving event, with the company’s CEO noting that larger companies with strong balance sheets tend to fare better during halvings.
Bitcoin’s price is expected to continue rising, with predictions of breaking previous records. Adam Back, the CEO of bitcoin infrastructure firm Blockstream, suggested that bitcoin’s price could surpass $73,790 during the Easter weekend. With recent inflows of capital to bitcoin exchange-traded funds reaching $58 billion, it is clear that investors are increasingly interested in cryptocurrencies.
The halving event creates winners and losers among bitcoin miners, with the most efficient miners expected to benefit from reduced rewards. Marathon Digital is positioning itself to be a winner, with the company making efforts to ensure it has the most efficient machines. While the company’s stock price may already reflect expectations for its growth, analysts believe there is still potential for upside in the stock, with an average 12-month target price of $23.91.
