Following last month's SEC approval of spot Bitcoin (BTCUSD) exchange-traded funds (ETFs) - and the accompanying sell-the-news reaction in related assets - investors may wonder if they've missed the chance to invest in cryptocurrencies and blockchain-related stocks. But in light of the recent pullback in many crypto stocks, it's worth remembering there's another potential upside catalyst on the horizon for Bitcoin - the upcoming “halving” event.

Notably, Bitcoin miners currently receive 6.25 BTC for adding a block to the system. However, after the upcoming Bitcoin halving (anticipated in April or May of this year), the miner's reward will halve to 3.125 BTC. This anti-inflationary measure is typically a bullish catalyst for Bitcoin prices, and could be again in 2024. 

As we stand on the brink of another Bitcoin halving, let's assess whether the recent dip in mining stock Marathon Digital (MARA) could present a compelling buying opportunity for investors. 

Marathon Digital Stock More Than Doubles

Marathon Digital is a crypto mining company that focuses on its blockchain ecosystem. Valued at $3.94 billion by market cap, it is one of the largest Bitcoin mining companies in North America. 

MARA stock has massively outperformed over the last year, up 146% - even after pulling back 20% in the past month.

In its Q3 results, Marathon reported revenue of $97.8 million, missing analysts' estimate of $99.6 million. However, the adjusted loss of $0.07 per share was narrower than expected. 

The miner produced 3,490 bitcoins, up nearly 20% from the previous quarter’s 2,926, while selling 66% of the prior quarter’s production for operating costs. 

What Do Analysts Expect for MARA?

Even though the stock has already more than doubled in value over the past year, analysts have grown more optimistic on MARA over the past month - including BTIG’s Gregory Lewis, who recently set a “Buy” rating for the stock with a $27 price target, reflecting a 45% upside potential to current levels. 

Gregory notes the launch of Bitcoin ETFs has redirected some funds away from mining stocks, but sees Marathon gaining from transaction fees - a revenue source that can be volatile, “but has historically increased with the BTC price,” he wrote.

Lewis was also optimistic regarding the MARA's acquisition of two Bitcoin mining sites, which effectively bolsters its operational capacity and offers more control over its power costs in the long term. 

The consensus rating for Marathon Digital stock is now a “Moderate Buy," up from “Hold” a month ago, with the mean price target of $16.35 still signifying a slight discount to current levels. Among the 9 analysts covering the shares, 3 have a “Strong Buy” rating, 5 have a “Hold” rating, and 1 has a “Strong Sell” rating for MARA stock.