Crypto stocks have been among the most disappointing investments in recent months. In previous crypto bull market rallies, cryptocurrency mining companies have been among the best performing assets, easily delivering multi-bagger returns and continuing to rise in parallel Bitcoin (BTC USD). In many cases, these mining stocks even outperformed Bitcoin. However, many of these mining stocks are currently trading flat or even significantly lower as Bitcoin hits new highs. Why this?
I believe that the current bull market is a little different than the previous ones. Bitcoin has gone parabolic long before the upcoming halving, something that has never happened before. Previous bull runs have occurred many months after the halving, giving miners time to prove they could manage operations with lower returns. However, this time Wall Street seems to be waiting for the halving, fearing that mining companies will not benefit as much from Bitcoin’s price rise due to the halved mining rewards.
I disagree with this view as most Bitcoin mining companies have aggressively expanded their mining fleets. I believe these crypto mining stocks could still rise after the halving and deliver huge returns. The reduction in supply is likely to drive Bitcoin prices significantly higher and increase the Bitcoin-filled balance sheets of mining companies.
Let’s take a closer look at some of these crypto stocks primed for a breakout!
Bitfarms (BITF)
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Bitfarms (NASDAQ:BITF) is a Canadian Bitcoin miner that has performed quite well compared to most other crypto mining companies. The company’s production costs are just under $16,200 for mining each Bitcoin, and Bitfarms currently holds an impressive 806 BTC and mines 9.2 new Bitcoin daily. It is a good time for the company to start selling Bitcoin in the current bull market and finally make a profit. However, much of these profits will be used to aggressively acquire mining hardware for post-halving operations.
Last month, Bitfarms announced plans to significantly increase its Bitcoin mining capacity. The company has exercised an option to purchase 28,000 Bitmain T21 miners. In addition, Bitfarms acquired 19,280 Bitmain T21 miners, 3,888 Bitmain S21 miners and 740 Bitmain S21 Hydro miners. With these hardware purchases, Bitfarms aims to achieve a hash rate of 21 exahashes per second (EH/s) in 2024 at mining facilities.
In addition, Bitfarms introduced a March 2024 operational update This shows that the company has earned 286 Bitcoins from its mining operations as it pushes forward with an ambitious upgrade plan. The company exercised options to purchase over 51,000 new Bitmain miners, including the latest T21 and S21 models, with the goal of tripling its hashrate to 21 EH/s by year-end while increasing power efficiency to 21 watts/terahash to improve. Bitfarms ended March with 6.5 EH/s online after receiving the first 1,650 T21 miners. While the hash rate declined slightly compared to February due to retrenchment programs, the company is well positioned to benefit from rising Bitcoin prices by rapidly expanding its next-generation mining capacity.
Marathon Digital (MARA)
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Marathon Digital (NASDAQ:MARA) is one of the larger crypto mining companies. It has also performed very well compared to most other mining companies and I am confident that Marathon Digital can achieve even more growth in the future if the bull market continues. I believe there are solid catalysts assuming interest rates fall and the halving occurs as expected.
Marathon Digital recently introduced two major new product lines showcasing its vertically integrated technology stack – the MARAFW firmware and the MARA UCB 2100 control board Designed to optimize Bitcoin mining rigs, which Marathon is now offering to external miners after successful internal deployment; and the MARA 2PIC700 two-phase immersion cooling system, which enables two to four times higher power density for data centers, including possible overclocking of Bitcoin mining ASICs by 60 to 100%.
I believe these catalysts, combined with the aggressive acquisition of mining rigs over the past few months, will result in Marathon Digital weathering the impact of the halving. The company appears to be running at full speed operationally while expanding mining capacity at just the right time.
Bit Digital (BTBT)
Bit Digital (NASDAQ:BTBT) is a smaller Bitcoin miner, and this company doesn’t have the prettiest chart. It is one of the crypto stocks that has a relatively flat chart even as the broader market continues to rise. However, improvements are being made and I believe this company is well positioned for the next surge following the upcoming Bitcoin halving.
The companys Over 45,000 miners generate a hash rate of 3.9 EH/s at maximum capacity, with 6,471 Bitcoins earned so far. Bit Digital announced It received a proposal from an existing customer to significantly expand its existing agreement for Bit Digital’s AI business. This proposal calls for an additional 2,048 GPUs, bringing the total under the amended agreement to 4,096 GPUs. Bit Digital intends to accept the customer proposal, but uncertainties remain in this regard.
This expansion would be a key growth catalyst and would help Bit Digital achieve its goal of achieving $100 million in annual revenue for its Bit Digital AI division. This aggressive mining expansion should allow the company to weather the impact of the halving and, in my opinion, makes it a top pick in the sector.
At the time of publication, Omor Ibne Ehsan did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication policies.