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Bitcoin Mining Stocks Will be Best BTC Proxy Bets If History Repeats

Bitcoin mining stocks flash signs of clear undervaluation amid strong selling pressure following BTC halving event. Watch out for recovery.
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Bitcoin Mining Stocks Will be Best BTC Proxy Bets If History Repeats

Highlights

  • Per the historical trends, Bitcoin mining stocks are quite undervalued amid strong selloff in 2024.
  • Bitcoin parabolic rally can begin by September end, triggering similar move in mining stocks.
  • Top miners like Marathon Digital have already started buying Bitcoins in big numbers.

So far in 2024, the Bitcoin price has shown strength with most of the gains coming in the first quarter following the spot Bitcoin ETF launch. However, the Bitcoin mining stocks have given a laggard performance amid the BTC halving event putting significant pressure on the company’s revenues.

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Bitcoin Mining Stocks Show Undervaluation

This year, some of the top BTC mining stocks such as Marathon Digital (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT), etc have been down 30-50% since the beginning of the year.

Crypto analytics platform ecoinometrics said that Bitcoin miner stocks had a terrible start to the year 2024, followed by a missed opportunity in Q1 following the spot Bitcoin ETF launch. During the second quarter, the BTC price has largely remained range-bound leaving the mining stocks struggling to gain momentum.

However, if history repeats, Bitcoin mining stocks can outperform BTC during the next bull run. In comparison to the previous cycles, several BTC mining stocks remain undervalued as of now.

“If you believe Bitcoin miners are likely to behave similarly during Bitcoin’s next parabolic phase, it’s reasonable to conclude that most of them are clearly undervalued,” noted ecoinometrics.

Top Bitcoin mining players have been consolidating their operations following the halving event in April, by buying new equipment and gearing up for future operations. Last week Marathon Digital purchased 4,144 Bitcoins through its $300 million in convertible notes.

In the past, several players have been betting on MicroStrategy stock as a proxy for Bitcoin. This also led to the launch of a leverage MicroStrategy ETF MSTX last week which saw strong trading volumes.

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BTC Consolidation Ending Soon?

Over the weekend, the Bitcoin price attempted a breakout above $60,000 but failed to breach the crucial resistance. At press time, Bitcoin is trading 1.36% down at $58,549 with a market cap of $1.115 trillion.

Popular analyst Rekt Capital stated that Bitcoin is just 125 days from the halving event. Historically, the Bitcoin parabolic rally begins after 160 days from BTC halving. Thus, the BTC price breakout might come a month later by September end.

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Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

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