Bitcoin Miner Stocks Surge Beyond Bitcoin Price in 2025: What the Upcoming Halving Means for Investors

Essential Insights

• Bitcoin miner stocks are currently delivering higher returns than Bitcoin’s price increase.
• The April 2024 Bitcoin halving will reduce mining rewards by 50%, potentially driving Bitcoin prices upward due to limited new supply.
• Only the most efficient mining operations are expected to thrive post-halving, while others may struggle with profitability.

In 2024, Bitcoin miner stocks have outpaced Bitcoin’s price growth, which recently reached its highest levels since 2021, fueled by mainstream adoption and the approval of multiple Bitcoin Exchange-Traded Funds (ETFs).

However, the upcoming Bitcoin halving event in April will cut miners’ rewards in half, reducing the creation of new coins by 50%. This scarcity could push Bitcoin’s price higher, but it will also challenge miners, especially those with less efficient equipment or higher operational costs.

According to Ethan Vera, COO of Luxor Technology, miners with high electricity expenses or outdated machinery will face significant profitability challenges after the halving. Many companies locked into power contracts may continue mining despite losses, but their ability to sustain operations depends on their financial reserves.

The halving coincides with renewed investor interest following the SEC’s January 2024 approval of 11 Bitcoin ETFs, making Bitcoin more accessible to a broader range of investors.

Who Will Win and Who Might Struggle?

Research from Cantor Fitzgerald in January shows that at $40,000 Bitcoin price, only two miners, CleanSpark (CLSK) and Bitdeer (BTDR), were profitable. Now, with Bitcoin above $50,000, more miners can operate profitably. However, Hut 8 (HUT) and Argo Blockchain (ARBK) face the highest costs, mining each coin at $60,360 and $62,276 respectively.

Neither Hut 8 nor Argo Blockchain responded to requests for comment. On the other hand, Riot Platforms (RIOT) claims to be among the "lowest cost miners" with mining costs near $44,000 per coin, positioning itself well ahead of the halving.

Riot has also announced plans to retain a larger portion of its Bitcoin production to acquire Bitcoin at a discount, leveraging strong liquidity to become one of the largest Bitcoin holders.

Marathon Digital (MARA) is preparing for the halving with substantial cash reserves. CEO Fred Thiel emphasized the need for resilience, highlighting that if Bitcoin’s price dips to $30,000, many miners may not sustain profitable operations. Marathon’s cost per coin stands at $50,559, making it marginally profitable at current prices.

CleanSpark, with mining costs around $37,000 per coin, anticipates that about 30% of current mining machines will be shut down post-halving, presenting potential acquisition and growth opportunities. Executive Chair Matthew Schultz revealed the company’s aggressive pursuit of mergers and acquisitions to expand its infrastructure.

Correction – February 20, 2024: This article was updated to clarify the exact number of Bitcoin ETFs approved.

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