Has MARA #1 Bitcoin miner peaked ? Read & decide.
US stocks retreated on the first trading day of 2024.
Actually, the stocks rally already stalled on Fri, 29 Dec 2023, after 2 months of gains that helped the major gauges end 2023 with strong yearly gains.
On Tue, 02 Jan 2023, Wall Street continued with a downbeat start. Boo hoo hoo!
By the time market closed on first trading day:
DJIA: +0.07% (+25.50 to 37,715.04).
S&P 500: -0.57% (-27.00 to 4,742.83).
Nasdaq: -1.63% (-245.41 to 14,765.94).
Looking at the Composite indexes’ moving average, they are still “healthy”: (see below)
Catalysts for first week.
This week, official Jobs Reports will be the catalyst affecting US market performance.
Below will be the expected labour reports:
03 Jan 2024 - Wed.
ADP Employment Report (private sector employment change)
Jobs Opening and Labour Turnover survey (JOLTs).
04 Jan 2024 - Thu.
US weekly jobless claims.
05 Jan 2024 - Fri.**
US Non-Farm Payrolls Report (official unemployment rate and job creation data)
Coupled with the core Consumer Price Index (CPI) and core Personal Consumption Expenditure (PCE) reports out respectively on 10 Jan 2024 and 26 Jan 2024, they will be setting the stage for FOMC’s first meeting in January 2024 - 30 & 31.
Fed’s minutes of meeting in December 2023.
In December 2024, the Fed maintained its funds rate unchanged for the 3rd time.
On Wed, 03 Jan 2024, the Fed will release the minutes of its 12 &13 Dec 2023 meeting.
Market remains keen to glean any clues about the “exact” timing of the first interest rate cut of -0.25%.
Bitcoin - 2nd coming?
It has been a while since I talked about the topic of Bitcoin.
After a long absence, I feel it’s time for a revisit.
Above is Bitcoin’s 3 years chart - Jan 2021 to Jan 2024.
It first peaked on 15 Apr 2021 at $63,063. It next peaked on 21 Oct 2021 at $64,688.
Finally, it last peak on 11 Nov 2021 at $65,019 before its rapid descend.
On 31 Mar 2022, there was a pseudo-peak at $46,702 before falling into the abyss where it remained for the whole of 2022, fluctuating between $18,000 and $20,000.
Since the beginning of 2023, there have been steady gains made by Bitcoin.
This could be closely linked to Wall Street interest and growing momentum to get SEC to approval respective funds houses Bitcoin Spot ETF application.
In August 2023, when the US court ruled in favour of Grayscale lawsuit against SEC’s rejection of their Bitcoin ETF application, the tide has turned against SEC.
By not appealing against the court’s verdict, SEC has “indirectly” conceded “defeat” of sort, setting in motion the timing of approvals on Bitcoin Spot ETF filed by respective funds houses.
By the time reality set in around late Sep 2023, Bitcoin price started its steady ascend.
With market speculating that SEC will approve the first batch of Bitcoin Spot ETF application by January 2024, the “buy the rumour” began pushing Bitcoin price higher by the day.
On 25 Nov 2023, Bitcoin reached its highest peak in months touching $48,238 before scaling back, due to profit taking ?
It is January 2024 and everyone is waiting impatiently for SEC’s announcement.
When it comes to SEC and its enigmatic chairman Gary Gensler, it is still anyone’s guess whether the approval will come by January 2024.
The rise in Bitcoin prices have a spillover effect on Bitcoin mining companies’ stocks.
The top 3 bitcoin mining companies (by market cap) are :
Marathon Digital stock price has “skyrocket” in recent months, almost in tandem with Bitcoin price movement. (see below)
For better part of 2023, Mara average price was around $10 to $12 range.
Things turned for the “better” from 15 Nov 2023 onwards where the ascend was steep.
Mara peaked on 27 Dec 2023 at $31.07 per share; it has consolidated in tandem with Bitcoin prices.
Its past 1-year performance of +574% eclipsed chip leader $NVIDIA Corp(NVDA)$ past 1 year performance of +236.49%.
Why Marathon Digital?
Marathon consistently expanded over the past 3 years; emerging as the world's largest Bitcoin mining company.
As of 01 Dec 2023, it has a fleet of about 184,400 active miners.
Compare to $Riot Blockchain, Inc.(RIOT)$ (#2 Bitcoin miner) that has reportedly a fleet of 112,944 active miners as at end November 2023.
Mara's Future Potential:
Whether Mara has more room to grow depends on several factors:
Bitcoin's price: Mara's fortunes are heavily linked to Bitcoin's price. Continued upward momentum in Bitcoin could fuel further gains for Mara.
Mining profitability: Increasing mining difficulty and rising energy costs could squeeze Mara's profit margins.
Regulatory environment: Stricter regulations on cryptocurrency mining could pose challenges for Mara.
Given that US stocks anticipate future performance, could Mara's current price already reflect its peak potential? This is how I see it !
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Do you think that Bitcoin prices will continue to rise in January 2024?
Do you think that Mara’s current stock price has already factored in SEC’s approval of Bitcoin Spot ETF application and its eventual roll out?
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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