What will be the price impact of Bitcoin’s fourth halving on Bitcoin mining stocks?

At 8:10 pm ET last Friday in New York, Bitcoin experienced its fourth halving event. The block height reached 840,000, and rewards per block were halved from 6.25 BTC to 3.125 BTC.

Despite the reduction in block rewards, miners at block 840,000 enjoyed substantial transaction fees, collecting over 37 BTC, which equated to more than $2.4 million.

On this significant day, Bitcoin's market behaviour was surprisingly stable. The price was just above $63,000, peaking at $64,120 during the halving before experiencing a slight dip.

Source: Crypto.com

Currently, Bitcoin's value is approximately $63,700, having risen by around 6% in the past day. The total value of the crypto market is now beyond $2.4 trillion, reflecting a 4% increase.

Other cryptocurrencies also showed resilience and growth. Ethereum and Binance Coin both rose by 5.5% over the same period. Solana, in particular, increased by 10%, trading at about $142.

In contrast, Toncoin saw a minor downturn, decreasing by about 3% and trading at $6.

Looking ahead, Bitcoin is set to undergo further halvings approximately every four years, with the next one anticipated around April 2028. This cycle will persist until all 21 million Bitcoins are mined, which is expected around the year 2140. After this, miners will depend entirely on transaction fees for rewards.

Historically, halvings tend to lead to price increases due to the ensuing scarcity of new Bitcoin. However, the latest peak price of $73,700 in March, coupled with the introduction of spot Bitcoin ETFs in the US and rising institutional interest, might have preempted the traditional post-halving surge.

Bitcoin Halving Catalysts Nasdaq Miners' Stock Surge

Several Bitcoin mining companies listed on the Nasdaq concluded the trading week on a high note, each showcasing a distinct surge in share prices. This uptick occurred just before Bitcoin's fourth halving event, a pivotal moment known to significantly impact mining operations by slashing the rewards for mining activities.

On the eve of this event, Bitcoin miners were notably active. Riot Platforms, a leading figure, saw its shares climb by over 10% as it revealed plans for a new mining site in Texas. Not to be outdone, Marathon Digital and Clean Spark also posted substantial gains, underscoring the industry's heated anticipation of the halving.

Miners Adapt Strategies as Bitcoin Halving Cuts Rewards

The halving itself reduced the reward from 6 BTC to 3.125 BTC per block, compelling miners to reconsider their operational tactics. With the potential for dwindling profits using the same resources, companies face a stark choice: expand their operations to sustain revenue or scale down.

In preparation, significant investments were made. Marathon Digital moved to acquire a new facility, enhancing its capacity, while Riot Platforms invested in a substantial number of mining rigs, marking one of its most significant expansions to date.

Despite the focus on Bitcoin, the broader S&P 500 index fell slightly, highlighting a contrasting sentiment in the wider financial market.