In the past year, the price of Bitcoin has seen a significant increase of 150% to $70,282. The Las Vegas-based crypto miner Marathon Digital also experienced a 158% appreciation in its stock price. However, the company’s stock took a hit on February 27 after reporting mixed fourth quarter financial results for 2023.
Despite the setback, things improved for Marathon Digital as its stock rose on March 29 and became one of the most actively traded shares. The emergence of Bitcoin Exchange Traded Funds in January has contributed to the rise in the price of Bitcoin, which directly impacts Marathon Digital’s stock price.
Marathon Digital makes money by owning cryptocurrency mining machines and a data center with a total of 210,000 mining rigs in 2023. The company generates revenue by mining new Bitcoin, with a revenue increase of 229% in 2023 compared to the previous year.
The upcoming halving event in April will cut the supply of Bitcoin and the reward for mining it, which could potentially impact Marathon Digital’s revenues. Analysts believe that the company’s stock price is likely to move in sync with the cryptocurrency, which they expect to keep rising leading up to the halving.
The halving event could create winners and losers among Bitcoin miners. While the halving might boost Bitcoin’s price, it also reduces the rewards for miners by granting them 50% fewer Bitcoins for verifying transactions. Marathon is likely to benefit from the halving due to the company’s strong balance sheet and preparation with efficient mining machines.
With the anticipation of a post-halving rise in Bitcoin’s price, Marathon Digital’s stock may already reflect investors’ expectations for the company’s growth. Analysts have an average 12-month stock price target of $23.91 for the Bitcoin miner, representing about a 7% upside. Overall, the outlook remains positive for Marathon Digital despite the potential impact of the upcoming halving event on Bitcoin mining rewards.
