After Friday’s “halving” event, which cut Bitcoin (BTC-USD) block rewards from 6.25 bitcoins to 3.125 bitcoins, miners are even more important to the cryptocurrency ecosystem.
The three miners we’ll explore are looking to improve their efficiency by updating their all-in sustaining costs (AISCs) and optimizing their firmware; they also come with upside potential going up to 127%. Under the new reward system, raising the hash rate per unit of energy can increase your profits.
Due to the lower profit margin, bigger mining companies may buy smaller ones that are having trouble. Adam Sullivan, CEO of Core Scientific (NASDAQ:CORZ), believes that capital is very important after halving.
So, the fact that a NASDAQ-listed company bought over 166,400 high-efficiency miners shows that it is growing quickly and has substantial capital to expand further is worth noting.
Other big players were able to triple Bitcoin production year over year thanks to their operations and capacity. One miner boosted cash 138% in the runup to the fourth Bitcoin halving.
A third NASDAQ-listed company puts money into data centers and mining that use artificial intelligence (AI). This plan looked ahead to tech trends and got the company ready for changes in the Bitcoin mining economy.
Let’s dive in!
Riot Platforms (RIOT)
Riot Platforms (NASDAQ:RIOT) is making major progress in growing its Bitcoin mining capacity. With the halving in the books, as JPMorgan Chase (NYSE:JPM) suggests, it’s one of the best Bitcoin miners for any portfolio. With potential upside of 115%, who can disagree?
In order to improve its mining operations, Riot has placed many orders with MicroBT. 33,280 immersion miners and an extra 66,560 miners have just been acquired, and a further 66,560 machines may be purchased in the future. By 2025, these acquisitions are expected to significantly increase Riot’s overall mining hash rate capacity.
One of Riot’s main tenets is to bring the production of these miners domestically to a MicroBT factory in Pennsylvania.
Riot’s hash rate capability is anticipated to increase to around 41 exahashes per second (EH/s) by the end of 2025 after the recently acquired miners are deployed.
In terms of building new infrastructure, Riot is currently working on the Corsicana facility in Texas. When it’s done, it will be able to mine 1 gigawatt (GW). About 400 megawatts (MW) of the first part should come online slowly by the end of 2024.
Finally, Riot has about $1.3 billion in cash and unencumbered Bitcoin as of March 2024, enough to aggressively expand post the halving.
Marathon Digital Holdings (MARA)
Marathon Digital Holdings (NASDAQ:MARA) mined 12,852 Bitcoins in 2023 versus 4,144 in 2022, showing its efficiency and readiness for the fourth Bitcoin halving. Operational capacity and mining efficiency increased production by 210% yearly.
The average daily Bitcoin output of miners rose from 11.4 in 2022 to 35.2 in 2023. Marathon’s cash rose 138% to $318.9 million in January 2024 from $133.8 million in 2023, boosting strategic reserves for future operations and expansions.
Effective mining and treasury management increased the company’s unconstrained Bitcoin holdings 95% to 15,741 in January 2024 from 8,091 in 2023.
Marathon invested $87.3 million in a 200-MW Bitcoin data center. The purchase reduces coin mining costs by 20% and increases site capacity to 200 MW, and operating capacity to 1.1 gigawatts across several sites.
Marathon’s installed hash rate rose from 23.8 to 24.7 EH/s between December 2022 and 2023. Since activating more miners, including over 9,000 in Texas, their fleet efficiency and production have increased. McCamey, TX had 90% operating hash in November 2023 and 92% in December 2023. This helped the fleet average 19.4 EH/s operational hash annually.
Marathon relies on Bitcoin pricing, so market gains boost revenue. In early 2024, Bitcoin prices increased Marathon’s operational margins and earnings. MARA should benefit greatly from Bitcoin price increases post-halving, hence a projected upside of 36%.
HIVE Digital Technologies (HIVE)
Hive Blockchain Technologies, rebranded as HIVE Digital Technologies (NASDAQ:HIVE), will give investors a degree of diversification since the company is now also focusing on AI-focused high-performance computing data centers as well.
It comes at a good time. Bernstein believes companies with nimble financial management will do well post-halving but diversifying into AI will also remain key.
Keeping an eye on Bitcoin, HIVE produced 200 and possessed 2,131 Bitcoins in February 2024. Meanwhile, HIVE bought 1,000 more Bitmain S21 Antminers to boost mining productivity. These new machines are part of an ongoing effort to increase their energy efficiency and hash rate, reducing the overall cost of producing Bitcoin and increasing gross mining margins.
Additionally, the business is growing its Icelandic, Swedish and Canadian green data center locations.
Analysts rate HIVE as a “Moderate Buy” based on three analyst ratings. The upside potential is substantial at over 127%.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
