Disclaimer:

I own MARA based on my prediction and MSTR based on it’s institutional support. What I have listed below is for the purpose of discussion and not financial advice. Ideally I get to hear some solid opinions on the matter, which is the reason for this post.

Introduction:

The much anticipated Bitcoin „Uptober“ has arguably been less explosive than expected. Maybe it was already priced in due to Bitcoins performance in September (usually a red month but not this year). Maybe Bitcoin just needs to warm up after its heavy consolidation period. Maybe there are other stakes at play for the delayed boom… Nevertheless, Bitcoin seems to finally be gaining some momentum, and Bitcoin related stocks like MSTR are starting to move ( 70% in in the last 30 days), showing a growing market interest in the sector.

Bitcoin and Mining stocks:

I don’t think a lot needs to be said about MSTR. Michael Saylors vision of MSTR is clear as he keeps buying and promoting Bitcoin. I believe MSTR will be a standard play for a lot of institutions this cycle, as seen with its current move to the upside.

On to the more controversial topic of crypto miners like MARA and RIOT:

These stocks have been friends of mine in the past. For one, their market caps are relatively low, making them quite volatile during hype periods. On top of that, they are shorted against, creating massive opportunities for short squeezes (I don’t think I need to explain to y’all the possible upsides of that…).

However, one point that keeps getting brought up is that many of these companies will dilute their shares (sell extra shares) to raise more cash, which in turn decreases the underlying share value of shareholders. Although I agree that this isn’t ideal, I think it is important to mention that this is mainly done to buy more Bitcoin before possible major Bitcoin moves (as MARA and MSTR do). So whether this makes you a fan or a hater of the stock is up to you really. But I believe that if someone is going to buy into a Bitcoin stocks purely for the boom, then this should be seen as bullish because in my opinion, a company holding more Bitcoin will be more attractive to other investors.

So yea, Bitcoin miners are a rollercoaster. But can’t that be advantageous?

Possibly relevant timestamps:

I know I know… past crypto cycles are not recipes for future cycles. But the cycles have retreated several times of bitcoins lifetime, hence my short summary below.

1. October 2024:

As explained, October generally is the best performing month (historically speaking) for Bitcoin throughout the whole year. November and December are also very profitable months, and the rally tends to extend past this. During this time, larger Bitcoin related stocks MSTR also perform very well.

In the last cycle 4 years ago, MSTR grew 166% from October 1st to December 31st. Its rally topped out early February the following year with a return of over 800%…

Bitcoin miner MARA grew 450% from October 1st to December 31st. Its rally topped out mid Feb the following year with a return of over 2500%. RIOT performed similarly.

1. December 2024

This upcoming December, the implementation phase of MiCAR (Markets in Crypto-Assets Regulation) is set to end. It will be followed by an 18 month transitional period, in which all entities providing crypto asset services much be compliant with international regulations. This will improve the image Bitcoin and crypto in terms of regulatory safety, and the effects can already be seen with major institutional involvement. Whether it becomes a short term catalyst is to be seen, but for Bitcoin HODLers, this is essential.

1. 2025 and onward

Obviously, it is very likely that the Bitcoin hypetrain will be followed by another crypto winter. In the last cycle, stocks like MSTR saw this winter following its peak early Feb. RIOT faced a similar trend. MARA, on the other hand, settled at a new ATH in early April 2021 ( 5000% from October 2020), and topped out even further the following November 2021 ( 7500% from October 2020). Based on historical data, it can be argued that Bitcoin and Bitcoin related stocks will see further and major upside in 2025.

Prediction:

So what is my non-professional and totally degenerate expectation of Bitcoin related stocks?

First off, I think that all stocks with major holdings in Bitcoin will do well in the early stages of the cycle. So this would be the likes of MSTR. I also believe that miners will continue to lag behind at first, but will eventually catch up and even outperform Bitcoin and larger Bitcoin stocks, simply because of their lower market caps. In terms of when I expect the top to occur, it is hard to say… I will definitely be eyeing December as a first milestone. If it feels like the MiCAR regulations were a catalyst for Bitcoin, it could be that Bitcoin slows in Jan and Feb. Next I will be watching end of January and early Feb, as this clearly was a major timestamp in last years cycle. Following February I expect some cooling and a bit of selling. In the beginning and throughout next summer, I will pay attention to how momentum is moving Bitcoin stocks and potentially swing trade. I will be looking for Bitcoin stocks which implement a HODL strategy.

Sadly, I don’t think we will reach the percentage gains that we did in the last cycle. Another gain of 7500% for MARA would but it at over $1100 per share. Although I would be ecstatic about this, I just don’t see it as realistic…

Closing words

Let me know what you think. This isn’t some ChatGPT summary to pump the stock. This one was ✨handwritten with love✨. I’m open for discussion on the matter and would appreciate any solid input.