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3 Bitcoin Mining Stocks to Watch on Impending April Halving
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There is a major Bitcoin (BTC) event on the horizon, with the scheduled April 2024 halving around the corner. The halving is a planned reduction of Bitcoin emissions in each block and takes place every four years.
Firstly, it is important to understand what Bitcoin halving actually means. When Bitcoin “miners” validate and record Bitcoin transactions, they receive both a block reward from the Bitcoin network and transaction fees from the retail consumer making the transaction. Bitcoin halving reduces the former by half, with a target to restrict the entire global circulation of Bitcoins at 21 million.
To get a perspective, per CoinMarket data, as of date, the total circulation of Bitcoin is 19.7 million, which leaves space for a maximum of 1.3 million Bitcoins to be offered as block rewards to miners. In the business, on day zero, miners received 50 Bitcoins as a reward. In the ensuing years, with the actual supply of the digital currency going up and the quantum remaining fixed at 21 million, these rewards have gone down with each halving. In 2012, they came down to 25 coins, in 2016 to 12.5 coins and in 2020 to 6.25 coins. It is thus expected that the upcoming halving would bring the block rewards down to 3.13 coins.
Because a halving event brings down the number of new coins introduced, demand for new Bitcoins generally increases, thereby pulling the price up. While this holds true on most occasions, a halving event also weighs on Bitcoin miners for obvious reasons.
However, because of its non-sudden nature, Bitcoin miners have had a chance to prepare for the event. They have resorted to selling to improve their cashflows and sending large amounts of BTC to exchanges as a part of the de-risking strategy.
So, with Bitcoin miners already preparing their strategies for next month’s halving, it would be prudent to watch a few prominent Bitcoin mining stocks.
Riot Platforms, Inc. (RIOT - Free Report) : This Bitcoin mining company from North America also provides data center housing and engineering services.
RIOT’s expected earnings growth rate for the next year is 77.7%. The Zacks Consensus Estimate for its current-year earnings has improved 11.4% over the past 60 days. RIOT currently carries a Zacks Rank #3 (Hold).
Stronghold Digital Mining, Inc. (SDIG - Free Report) : This is a crypto asset mining company that focuses on mining Bitcoin in the United States.
SDIG’s expected earnings growth rate for the current year is 34.3%. The Zacks Consensus Estimate for its current-year earnings has improved 5.1% over the past 60 days. SDIG currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HIVE Digital Technologies Ltd. (HIVE - Free Report) : This cryptocurrency mining company operates in Canada, Sweden and Iceland. It engages in the mining and sale of digital currencies.
HIVE’s expected earnings growth rate for the current year is 66.5%. The Zacks Consensus Estimate for its current-year earnings has improved 22.4% over the past 60 days. HIVE currently carries a Zacks Rank #2 (Buy).
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3 Bitcoin Mining Stocks to Watch on Impending April Halving
There is a major Bitcoin (BTC) event on the horizon, with the scheduled April 2024 halving around the corner. The halving is a planned reduction of Bitcoin emissions in each block and takes place every four years.
Firstly, it is important to understand what Bitcoin halving actually means. When Bitcoin “miners” validate and record Bitcoin transactions, they receive both a block reward from the Bitcoin network and transaction fees from the retail consumer making the transaction. Bitcoin halving reduces the former by half, with a target to restrict the entire global circulation of Bitcoins at 21 million.
To get a perspective, per CoinMarket data, as of date, the total circulation of Bitcoin is 19.7 million, which leaves space for a maximum of 1.3 million Bitcoins to be offered as block rewards to miners. In the business, on day zero, miners received 50 Bitcoins as a reward. In the ensuing years, with the actual supply of the digital currency going up and the quantum remaining fixed at 21 million, these rewards have gone down with each halving. In 2012, they came down to 25 coins, in 2016 to 12.5 coins and in 2020 to 6.25 coins. It is thus expected that the upcoming halving would bring the block rewards down to 3.13 coins.
Because a halving event brings down the number of new coins introduced, demand for new Bitcoins generally increases, thereby pulling the price up. While this holds true on most occasions, a halving event also weighs on Bitcoin miners for obvious reasons.
However, because of its non-sudden nature, Bitcoin miners have had a chance to prepare for the event. They have resorted to selling to improve their cashflows and sending large amounts of BTC to exchanges as a part of the de-risking strategy.
So, with Bitcoin miners already preparing their strategies for next month’s halving, it would be prudent to watch a few prominent Bitcoin mining stocks.
Riot Platforms, Inc. (RIOT - Free Report) : This Bitcoin mining company from North America also provides data center housing and engineering services.
RIOT’s expected earnings growth rate for the next year is 77.7%. The Zacks Consensus Estimate for its current-year earnings has improved 11.4% over the past 60 days. RIOT currently carries a Zacks Rank #3 (Hold).
Stronghold Digital Mining, Inc. (SDIG - Free Report) : This is a crypto asset mining company that focuses on mining Bitcoin in the United States.
SDIG’s expected earnings growth rate for the current year is 34.3%. The Zacks Consensus Estimate for its current-year earnings has improved 5.1% over the past 60 days. SDIG currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HIVE Digital Technologies Ltd. (HIVE - Free Report) : This cryptocurrency mining company operates in Canada, Sweden and Iceland. It engages in the mining and sale of digital currencies.
HIVE’s expected earnings growth rate for the current year is 66.5%. The Zacks Consensus Estimate for its current-year earnings has improved 22.4% over the past 60 days. HIVE currently carries a Zacks Rank #2 (Buy).