In 2023, Bitcoin (BTC -0.08%) mining stocks have thus far been stellar performers, thanks primarily to the rapid appreciation in the price of the cryptocurrency. Riot Platforms (RIOT), for example, is up 332% for the year. And CleanSpark (CLSK -1.10%), a smaller Bitcoin miner, is up 221%. 

If you were only taking into account the events of this year, then Riot Platforms would be the obvious winner. Right now, the only thing that seems to matter in terms of valuation is the scale and scope of current Bitcoin mining operations. The rush is on to mine as much of the digital currency as possible.

But there are two looming events that could have a huge impact on how investors value these Bitcoin mining stocks.

1. The Bitcoin halving

In April 2024, Bitcoin will undergo its next halving. This event, which takes place only once every four years, will slash the reward paid out to miners in half.

As might be expected, this could have a tremendous impact on the valuation of Bitcoin miners. All things being equal, they will be mining one-half the amount of the crypto with the same number of mining rigs.

That might sound disastrous, until you consider that the value of each token they are mining could soar in value. To some extent, the effects could offset each other, as long as Bitcoin prices jump substantially.

Bitcoin split in half by lightning.

Image source: Getty Images.

But the overall dynamic in the Bitcoin mining industry is set to change. In 2023, the narrative was all about expansion, and getting as many mining rigs into action as possible. In 2024, this narrative is going to shift to one about efficiency and being the lowest-cost miner possible. 

That's primarily attributable to the halving, which is going to put a premium on efficiency and being able to squeeze out as much Bitcoin as possible from every single mining rig. 

Indeed, in its recent second-quarter earnings report, Riot Platforms warned of upcoming consolidation in the industry. Some analysts are already warning of a massive shakeout ahead. 

Simply stated, if you aren't running a lean, hyperefficient mining operation in 2024, then you're asking for trouble. This is one area where I'd give Riot Platforms the edge over CleanSpark. Riot is known for being a low-cost producer, and for constantly looking for ways to reduce the costs of its mining activities.

2. The industry shift to cleaner crypto mining

There is one other trend that could be more problematic for Riot Platforms, and that is the overall industry push to cleaner energy. The energy-intensive nature of miners has attracted a lot of attention, and some states are trying to ban Bitcoin mining entirely. In some cases, they have been forced to seek out locales such as Texas that are friendly to Bitcoin miners.

And last September, the White House published a report on the climate and energy effects of Bitcoin mining. This is a topic that seems to pop up whenever there is broader debate going on in society about climate change.

Thus, from this perspective, it's understandable that Bitcoin miners that are primarily using clean sources of energy (such as wind and solar) would have an edge over Bitcoin miners relying on traditional carbon-based sources.

While CleanSpark may be smaller than Riot Platforms, it does appear to have an edge in this regard, simply due to its support and adoption of renewable energy. At some point in time, investors might decide to give a premium to miners such as CleanSpark, even if they lack the size and raw production capacity of larger miners.

The long-term case for Riot Platforms

That being said, it's hard to argue with Riot Platforms as a low-cost, highly efficient Bitcoin miner that is rapidly scaling up operations. While the latest second-quarter earnings report was mixed at best, there are some positive signs. 

For example, Riot Platforms showed signs of diversifying its operations beyond just Bitcoin mining, to include more revenue from data center hosting and engineering services. From a long-term perspective, this diversification is key to smoothing out the natural ebb and flow of mining revenue.

Thus, for now, Riot Platforms is my Bitcoin miner of choice. But keep an eye out for the impact of the halving, and for changes in the national debate over clean energy. Both of these factors could change the way investors view Bitcoin mining stocks in 2024 and beyond.