The original cryptocurrency has surged over 60% since the beginning of the year, driven by optimism surrounding record demand for US exchange-traded funds that directly hold the tokens. Historically, Bitcoin prices have tended to increase in the months following its triennial halving event.
"I think the ETF approval, which has been a huge success, has attracted capital into the market and essentially brought forward what could have been the price appreciation we typically would have seen three to six months post-halving," said Marathon Digital Holdings Inc. CEO Fred Thiel in an interview with Bloomberg TV on Tuesday. "So I think we are seeing part of that now already, and that has accelerated some of the demand."
Marathon, headquartered in Fort Lauderdale, Florida, operates several mining facilities across the US, including in Texas. Bitcoin mining involves an energy-intensive process where specialized computers validate transactions on the original blockchain and earn rewards in the form of tokens. The upcoming halving event, scheduled for late April, will halve this reward, which is the primary revenue source for miners.
"The halving event will reduce the supply of Bitcoin by about 450 a day, which would probably have some small impact on prices," Thiel noted. "But as miners, we are very excited to go into a halving, where for once, prices have not declined prior to the halving; rather, prices have gone up, so everybody is obviously maximizing that."
Bitcoin experienced its first decline in four trading sessions on Tuesday, falling about 4% to $68,773. It has since dropped around 7% from its record high of $73,797 on March 14.
Thiel estimated that after the halving, Marathon's break-even rate would be approximately $46,000 per Bitcoin to remain profitable.
As of 3:32 p.m. in New York, Marathon's shares were up less than 1% to $18.08. The stock has declined by about 23% this year.
