Necessary Boom: Bitcoin Miners Require $98K Price Pre-Halving to Break Even

• Bitcoin miners require the BTC price to surpass $98,000 before the 2024 halving to remain profitable, according to a recent analysis.
• Despite a potential tripling of mining capacity in 2024, public miners face challenges due to the halving and current high valuations.

In the face of fluctuating fortunes, Bitcoin miners may need the BTC price to exceed $98,000 by the 2024 halving to keep their operations in the black. A six-figure price for Bitcoin is more than a hopeful forecast for these miners—it’s an essential for their bottom lines to stay positive.

Bitcoin may reach $120,000 by the end of 2024, Standard Chartered forecasts, as an expected improvement in crypto miners' fortunes allows them to hold on to more of the tokens https://t.co/Z9z0BbKCqS

— Bloomberg Crypto (@crypto) July 11, 2023

Publicly Listed Miners and the Halving Hurdle

Publicly listed Bitcoin miners have had an impressive run this year, with their stocks outperforming BTC and escalating by almost 100% in just a few months. A focus has fallen on one such popular miner, Riot Platforms, which is projected to triple its mining capacity in 2024. However, the forthcoming Bitcoin halving, a mechanism that slashes block rewards by 50%, presents a formidable obstacle to Riot and its peers.

Bitcoin miners have had a banger of a year.

RIOT is up 457%
MARA is up 421%
BITF is up 337%
CLSK is up 246%

Both Bitcoin and Nvidia rose by less than public miners this year — 80% and 222% respectively.

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The halving cuts miners’ chief income source by half, causing consternation among the mining community. Moreover, strategies like issuing new equity shares to fund operations may dilute existing shares. Even with robust company fundamentals, share prices may fail to follow the upward trend.

While public mining stocks have eclipsed Bitcoin’s performance in 2023, a surge in BTC sent to exchanges might herald a decline in momentum. Therefore, a considerable rise in Bitcoin’s price is imperative for miners to remain profitable, given today’s hash rate levels.

Survival Stakes: Six-Figure Bitcoin Price

How far must the BTC price climb for miners to preserve their current valuations? The aforementioned analysis posits a nearly $100,000 price point as a requirement for miners to operate in a business-as-usual manner.

“Even with Riot’s ambitious 35 EH/s, our model suggests that Bitcoin needs to trade above $98,000 to justify Riot’s current valuation (post-halving),”

the report states. The study further cautions that holding onto BTC mining stocks is “extremely risky,” as underlying fundamentals might not keep up with current valuations that may not factor in next year’s Bitcoin halving.

Meanwhile, a report from Matrixport projects a potential BTC price of $125,000 by the end of 2024. Such speculation brings hope to miners, as a higher Bitcoin price will undoubtedly boost their profitability, especially in the face of the impending halving.