Following the Bitcoin halving event in early 2024, it appears that crypto mining stocks have outperformed BTC, with Hut 8 and Bitfarms leading the way in terms of returns. According to analysts at CCData, the halving has caused significant changes in the crypto mining industry, particularly impacting smaller mining firms. This is mainly due to their inadequate infrastructure and lack of economies of scale. As a result, private equity firms have stepped in to consolidate these smaller firms and integrate their infrastructure. Despite recent challenges faced by Bitcoin itself, this strategic interest has resulted in impressive performance in mining stocks. Hut 8 and Bitfarms, in particular, have achieved returns of 86% and 34% respectively, while Bitcoin has experienced a 3.62% decrease post-halving.
The analysts also highlighted in their report that Bitcoin’s price has remained within a range of $59,000 to $72,000 in the three months following the halving. In contrast, major U.S. equity indices have reached new record highs. This, coupled with reduced trading activity on centralized exchanges, has led to speculation that the market may have reached its peak for this cycle.
However, historical trends indicate that the halving event has always been followed by a period of price expansion. In previous instances, this expansion lasted anywhere from 366 days (in 2014) to 548 days (in 2021) before reaching a cycle top. CCData suggests that the data and historical patterns are strong enough to suggest that any sideways price movement is only temporary. They believe that the market is likely to surpass its previous all-time highs once again before the end of the year.
In related news, Riot has called for a special meeting of Bitfarms and has withdrawn its $950 million acquisition proposal.