The upcoming Bitcoin halving in April 2024 is highly anticipated and holds great importance due to its projected potential for increased gains in the overall market. Among those expected to benefit the most from this event are the Bitcoin bulls, including MicroStrategy led by Michael Saylor. It is likely that the value of MicroStrategy’s Bitcoin holdings will rise, and there is anticipation of an upward trend in the company’s stock (MSTR).
Berenberg Capital Markets, an investment firm based in New York, has issued a positive forecast for MicroStrategy, setting a price target of $430 for the firm. Currently, MicroStrategy shares are trading at $408, showing a growth of approximately 180% since the beginning of 2023.
MicroStrategy’s value is derived from its substantial Bitcoin holdings, totaling around 152,333 BTC. Berenberg suggests that a rally resulting from the Bitcoin halving could lead to an increase in the price of MicroStrategy shares. The investment firm expresses the expectation that Bitcoin’s price will follow its historical pattern of rallying before and after each halving.
While the majority of predictions regarding Bitcoin after the halving indicate a positive trajectory, there is a specific group in the market that may face challenges.
Concerns Rise: Bitcoin Miners Face Economic Challenges.
Significant concerns have emerged regarding the economics of BTC mining leading up to the upcoming halving. Jaran Mellerud, a crypto-mining analyst at Hashrate Index, foresees notable effects on the majority of miners due to increased costs associated with the mining process. Mellerud states that nearly half of the miners will suffer because they operate less efficient mining operations with higher costs.
Mellerud explains that the break-even electricity price for a typical mining machine is projected to decrease from $0.12 per kilowatt-hour (kWh) to $0.06/kWh after the halving. However, he notes that about 40% of BTC miners operate at a higher cost per kWh than $0.06/kWh.
As a result, miners with operating costs exceeding $0.08/kWh, as well as those who do not own their mining rigs, are expected to face significant consequences. Wolfie Zhao, head of research at TheMinerMag, also supports this notion, stating that the total cost for certain miners is well above Bitcoin’s current price. Consequently, many miners with less efficient operations will experience negative net profits.