and cons.
The price of Bitcoin (BTC) is a topic of much discussion among financial experts, with many predicting that it could reach heights of $100,000 by the end of 2024. For publicly-listed Bitcoin miners, in particular, this may be more of a necessity than a forecast if their business models are to remain profitable. Bitcoin mining stocks have been on a tear this year, outperforming BTC by a wide margin in recent months. While BTC has seen reduced volatility and a period of consolidation, Bitcoin mining companies’ stocks have risen by nearly 100% in a matter of months.
One popular miner, Riot Platforms, is expected to triple its mining capacity in 2024, but the company and Bitcoin miners, in general, could face serious headwinds from the halving. A 50% decrease in BTC block rewards cuts miners’ main source of revenue in half. Additionally, miners like Riot can issue new equity shares to fund their operations. This dilutes existing shares, meaning that even if the company’s underlying fundamentals are sustained, the share price may not keep up.
The question is, how high does the BTC price need to go for miners to maintain their current valuations? The answer lies in the current hash rate levels. It is estimated that for miners to remain profitable at today’s hash rate levels, a big increase in Bitcoin’s price will be required.
The prospect of a BTC price of $100,000 by the end of 2024 is exciting, but there are both pros and cons to consider. On the positive side, the increased price could provide a greater incentive for miners to invest in their operations, leading to improved efficiency and cost savings. This could be beneficial for the industry as a whole, as miners become more competitive and are able to provide more services to the market. On the flip side, a higher price could also lead to a decrease in demand for mining services, as miners may not be able to compete with other forms of cryptocurrency mining.
Ultimately, only time will tell if BTC will reach the $100,000 mark in 2024. However, it is clear that publicly-listed Bitcoin miners need higher prices to remain profitable in the long-term. While the market may be volatile in the short-term, the long-term trend of increasing prices could benefit miners significantly. As such, miners should continue to monitor the market and make strategic investments that will make them more competitive and profitable in the future.