Notable absentees of the ongoing crypto market rally have, for the most part, been major Bitcoin (BTC) mining firms.
This, perhaps, isn’t surprising given that the companies not only suffered immense damage during the ‘crypto winter’ but their prospects for the Bitcoin halving might not be as stellar as might appear at first glance.
Indeed, as the mining rewards are set to become smaller, Bitcoin prices will have to increase significantly for the miners to remain profitable and the world’s premier cryptocurrency would have to rise above $120,000 for firms like Marathon Digital (NASDAQ: MARA) to maintain relative parity with the 2021 bull market.
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Still, given the halving is likely to favor bigger firms, and that stocks like MARA have done all except match the crypto market rally, they may constitute value buying opportunities as of late March 2024.
With these troubling yet promising circumstances in mind, Finbold decided to ask and try to answer, how high could the stock of Marathon Digital – the biggest Bitcoin miner by market cap – rise should BTC hit $100,000?
MARA stock price chart
So far, the stock of Marathon Digital has shown some correlation with Bitcoin’s movements, though nowhere near as much as companies such as MicroStrategy (NASDAQ: MSTR).
While Bitcoin’s 52-week surge of 147.67% was accompanied by MARA’s rise of 184.03%, the coin’s year-to-date (YTD) rally of 58.95% wasn’t shadowed by the miner which declined 1.53% in the same time frame.
In fact, the correlation between the two appears to have weakened in recent weeks.
While BTC reached a new all-time high in March. Marathon Digital shares erased most of their earlier 2024 gains.
The miner has, however, been catching up in the last 5 trading days and managed a 7.17% climb to $22.58.
Where will MARA stock stand if BTC hits $100,000?
The recently-observable correlation – or lack thereof – between MARA and Bitcoin makes predicting future movements for the stock difficult. Indeed, the 2024 figures hint that Marathon Digital shares might remain level, or drop toward $20 even should Bitcoin hit the long-awaited high.
Both the longer-term and the most recent performance, however, demonstrate that the miner could match and slightly exceed Bitcoin’s rise and that should the cryptocurrency land at $100,000, MARA could climb to a range between $35 and $40.
Finally, Bitcoin’s movements could have a disproportionate effect on the miner’s shares. There remains a strong possibility that should BTC rally in a fashion akin to its previous halvings – maybe reaching or exceeding Robert Kiyosaki’s 2024 $300,000 price target – MARA could repeat its 2020 and 2021 rally and surge toward $1,400.
While such a 6,000% rally might appear more appropriate for a penny stock Marathon Digital was at the time of Bitcoin’s last halving, it is worth remembering that 2024 is no stranger to already major stocks surging at exceptional rates.
In fact, Super Micro Computer’s (NASDAQ: SMCI) involvement with artificial intelligence (AI) led to a 253.84% YTD rise and MicroStrategy’s own connection to Bitcoin saw it surge 148.79%.
Conversely, should BTC fail to meet post-halving expectations and offer only a middling rally, Marathon Digital is in danger of plummeting back into penny stock territory on fears of evaporating profitability.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
