Despite recent fluctuations in Bitcoin’s price, predictions of the cryptocurrency reaching six figures by the end of 2024 persist.
For publicly-listed Bitcoin miners, achieving a price above $100,000 may be imperative for their business profitability rather than just a hopeful forecast.
Bitcoin mining stocks have seen remarkable growth this year, outperforming Bitcoin itself in recent months.
While Bitcoin’s volatility has decreased and it has undergone a period of consolidation, mining companies’ stocks have surged by nearly 100% within a short span.
A report analyzing the mining industry, particularly Riot Platforms, reveals that even though Riot is expected to triple its mining capacity by 2024, it and other miners could face significant challenges due to the halving event.
The halving reduces BTC block rewards by 50%, effectively cutting miners’ revenue in half. To overcome this, some miners may resort to issuing new equity shares to finance their operations.
However, this can dilute existing shares and impede share price growth, even if the company’s fundamentals remain intact.
Furthermore, some mining stocks might already be overvalued at current levels, potentially indicating a decline in momentum if more BTC is sent to exchanges.
As a result, a considerable increase in Bitcoin’s price would be necessary for miners to stay profitable at the current hash rate levels.
The report suggests that Bitcoin would need to trade above $98,000 to justify Riot’s current valuation post-halving.
Hence, holding BTC mining stocks is deemed extremely risky, as the underlying fundamentals may not align with the current valuations that might not account for the upcoming Bitcoin halving.
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Another report from Matrixport forecasts Bitcoin reaching $45,000 by year-end and $125,000 by the end of 2024.
The report emphasizes the significance of Bitcoin’s one-year high, historically marking the beginning of new crypto bull markets.
Previous occurrences of this signal were followed by bull markets materializing within 12-18 months.
This six-figure Bitcoin price prediction aligns with other projections, including Standard Chartered’s forecast of a $120,000 Bitcoin price by the end of 2024.
Interestingly, the latter prediction is based on the assumption that BTC miners will hold onto their Bitcoin instead of selling it before the halving.
In conclusion, despite recent price fluctuations, many experts still believe in the possibility of Bitcoin reaching six figures by the end of 2024.
For publicly-listed Bitcoin miners to remain profitable, a significant increase in Bitcoin’s price seems necessary, especially considering the effects of the halving event on mining revenues.
However, as with any financial prediction, there are inherent risks and uncertainties to be considered.
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