Immediate-term news, like the Bitcoin (BTC-USD) halving or the SEC’s approval of spot ETFs, is important, but that’s not the only think to consider before investing in Marathon Digital (NASDAQ:MARA). Instead, think about the long term and prepare to hold Marathon Digital stock throughout the ups and downs of the crypto market.
Yes, we will discuss the Bitcoin halving event as it’s top-of-mind in the cryptocurrency sphere right now. It’s important to understand the implications of future Bitcoin halvings. Understand Bitcoin’s benefits before deciding to own Marathon Digital shares.
Will Marathon Survive the Post-Halving?
Just to recap, the Bitcoin halving is an event that happens approximately once every four years, in which the reward for mining Bitcoins gets cut in half. This is done to reduce and control the circulating supply of Bitcoins.
The most recent Bitcoin halving event just occurred this past weekend or thereabouts. This time, the reward for mining Bitcoin is being reduced from 6.25 tokens to 3.125 tokens.
On the face of it, this sounds like a fatal blow to a Bitcoin-mining business like Marathon Digital. Don’t be surprised if you see some alarming financial-press headlines. Even The Wall Street Journal got into the act, hinting that cryptocurrency miners are scrambling for new ways to make money.
Marathon Digital isn’t scrambling. The data shows that Marathon Digital is increasing its Bitcoin-mining pace, both in terms of Bitcoins produced and energized hash rate.
Clearly, Marathon Digital’s management isn’t losing sleep over the current and future Bitcoin halving events. The company recently acquired a 200-megawatt Bitcoin-mining data center next to a wind farm. That sounds like confidence, not fear or worry about halving events.
If You Like Bitcoin, You Should Also Like Marathon Digital
In case you didn’t get the gist of all this: Yes, Marathon Digital, will survive the post-halving weeks and months. We’ve told you that there will be ups and downs with Marathon Digital stock. That’s par for the course in the ever-changing world of crypto-related assets.
Of course, Marathon Digital’s management understands the implications of this year’s Bitcoin halving event. However, they also expect the Bitcoin price to rise over the coming years. You should have the same expectation if you plan to buy and hold Marathon Digital shares.
Consider what a CNBC report observed about what has historically occurred after Bitcoin halvings. Reportedly, “After the 2012, 2016 and 2020 halvings, the bitcoin price ran up about 93x, 30x and 8x, respectively, from its halving day price to its cycle top.”
We’re not suggesting that you should try to predict what will happen to the Bitcoin price in the coming months. Rather, the point is that Bitcoin halving events shouldn’t cause you to lose sleep at night. If the Bitcoin price rises substantially over the long term, Marathon Digital should do well even if the mining reward is reduced.
Marathon Digital: Give Yourself Time to Be Right
If you have a bullish Bitcoin thesis, you don’t have to be right in the immediate term. The Bitcoin price will fluctuate due to headline-driven greed and fear. Consequently, you should expect that the Marathon Digital share price will make big moves in both directions.
Over the years, there will be more Bitcoin halvings and other notable events, both known and unforeseeable. Yet, throughout it all, there will only be 21 million Bitcoins.
So, if you’re a Bitcoin believer, give yourself time to be right with Marathon Digital stock. Holding for a long time will hopefully allow your bullish crypto thesis to play out in your favor. Hence, while an investment in Marathon Digital might not be right for everyone, it may be appropriate for you if you have the right mind-set and time frame.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.