2023 has been a fairly good year for Bitcoin, but it’s been a stellar one for publicly listed crypto mining firms such as Riot, Core Scientific and HIVE Digital.
As the 2024 halving nears, all eyes are turning to Bitcoin (BTC) – the first and largest cryptocurrency by market cap.
At the time of writing, BTC is trading at $26,474 and is approximately 61.68% down from its all-time high of $69,044.
Investors and financial institutions are confident that the legacy crypto will soar to new highs in 2024 as the halving takes place, with Standard Chartered predicting an ambitious high of $120,000.
The halving: The Bitcoin halving is when miner rewards are cut in half, reducing the rate at which new bitcoins are created and impacting the overall supply and inflation of the cryptocurrency. Historical price data shows that the price of Bitcoin tends to increase following a halving cycle.
A new report by cryptocurrency financial services company Matrixport however claims that investors may see greater returns by investing in listed Bitcoin mining companies, rather than Bitcoin itself.
Listed mining companies v. Bitcoin
The report outlines that if Bitcoin reaches a new all-time high of $70,000, investors will still only see a return of 167% by holding Bitcoin directly. Investing in a diverse range of publicly listed Bitcoin mining firms however may offer bigger yields.
Some of the largest publicly traded crypto mining firms include Riot Blockchain (RIOT), which holds a market cap of $2.15bn, as well as HIVE Digital (HIVE), Bitfarms (BITF), and Iris Energy (IREN).
While Bitcoin has had a positive year so far, gaining 60% since January, mining companies have had a better year by a large margin.
At the close of June 2023, mining firms Core Scientific (CORZ), Riot Blockchain (RIOT) and Bitfarms (BITF) saw impressive gains of 947%, 442% and 300% respectively. Iris Energy (IREN) and CleanSpark (CLSK) similarly traded up 458% and 212%.
At the time of writing, RIOT is 174.16% up from January, and CORZ by a massive 981.25%, jumping from $0.064 per share to $0.692.
Matrixport outlined that mining company stocks are currently trading at a 33% discount relative to Bitcoin’s current price. This discount, combined with the potential for Bitcoin to reach higher price levels, positions these stocks for a 52% upside, according to the report.
Markus Thielen, head of research at Matrixport, stated, “In our regression analysis, the 10 stocks included could be valued 97% higher if Bitcoin returns to $30,000 or an impressive 572% higher if Bitcoin reaches a new all-time high and trades at $70,000.”
He added, “For the sake of diversification, opting to invest in a selection of discounted bitcoin mining stocks or tokens with substantial growth potential could possibly represent the ultimate bet for 2024,”
Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.