Bitcoin Mining Stocks Will be Best BTC Proxy Bets If History Repeats

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As a seasoned analyst with over two decades of experience in the financial markets, I have learned to read trends and patterns that often go unnoticed by others. The current performance of Bitcoin mining stocks such as Marathon Digital (NASDAQ: MARA) and Riot Platforms (NASDAQ: RIOT), which are down 30-50% since the beginning of the year, presents an intriguing opportunity. While the BTC price has shown strength this year, the mining stocks have lagged behind due to factors like the halving event and a range-bound Bitcoin price during Q2.

2024 has seen Bitcoin‘s price surge thus far, with the majority of its gains occurring during the first quarter post the launch of the spot Bitcoin ETF. On the other hand, Bitcoin mining stocks have underperformed compared to their peers, struggling particularly during the BTC halving event which impacted their revenue significantly.

Bitcoin Mining Stocks Show Undervaluation

As a researcher, I’ve noticed that some of the leading Bitcoin mining stocks, including Marathon Digital Holdings Inc. (NASDAQ: MARA) and Riot Blockchain, Inc. (NASDAQ: RIOT), have seen a significant drop in value this year, with declines ranging between 30% to 50% since the start of 2021.

2024 saw a rocky beginning for Bitcoin miner stocks, according to ecoinometrics, with a disappointing start to the year. In Q1, there was a missed opportunity following the launch of the spot Bitcoin ETF, and during the second quarter, the price of Bitcoin predominantly stayed within a narrow range, making it difficult for mining stocks to pick up speed.

If history follows a similar pattern, Bitcoin mining stocks could surpass Bitcoin itself during the upcoming market surge. Unlike prior cycles, some Bitcoin mining stocks are currently underpriced.

The Bitcoin miners’ stocks have suffered a lot this year.

2021 began with a dismal start for us, which was further compounded by failing to seize the chance during the surge of Bitcoin Exchange-Traded Funds (ETFs) in February and March. Since that time, Bitcoin has found itself in a price plateau.

This is disappointing, considering that during…

— ecoinometrics (@ecoinometrics) August 18, 2024

According to ecoinometrics, if you think Bitcoin miners will act in a similar way during the next major increase in Bitcoin’s price, it could be assumed that many of these miners are currently being underestimated in value.

Leading Bitcoin miners are streamlining their activities post the halving in April, primarily by acquiring fresh mining gear and preparing for upcoming tasks. Recently, Marathon Digital has procured 4,144 Bitcoins using its $300 million worth of convertible bonds.

Historically, various investors have used MicroStrategy stock as a stand-in or substitute for owning Bitcoin. This trend culminated in the introduction of a MicroStrategy Leverage ETF (MSTX) just recently, which has witnessed high trading activity since its launch a week ago.

BTC Consolidation Ending Soon?

Over the course of the weekend, Bitcoin’s price made an effort to surge past the $60,000 mark but was unable to surmount the significant barrier of resistance. At this moment, Bitcoin is currently experiencing a 1.36% decrease and is being traded at $58,549, with a market capitalization of $1.115 trillion.

According to well-known analyst Rekt Capital, we’re looking at approximately 125 days until the Bitcoin halving event takes place. Traditionally, Bitcoin experiences a significant surge, or what’s known as a parabolic rally, around 160 days post-halving. This suggests that the price increase for Bitcoin might occur slightly later, possibly towards the end of September.

#BTC
Bitcoin is ~125 days after the Halving
Bitcoin tends to breakout into the Parabolic Phase of the cycle some ~160 days after the Halving
If history repeats, Bitcoin could be just over a month away from breakout
That’s late September$BTC #Crypto #Bitcoin
— Rekt Capital (@rektcapital) August 18, 2024

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2024-08-19 08:10