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JPMorgan Analyzes Bitcoin Mining Landscape and Price Targets for Cryptocurrency Miners
Explore JPMorgan’s in-depth analysis of the Bitcoin mining landscape, uncovering insights on market trends and price targets for cryptocurrency miners. Stay informed on key factors influencing the industry’s future and profitability.
JPMorgan Analyzes Bitcoin Mining Landscape
As of the current valuation of Bitcoin (BTC), the remaining 1.3 million tokens yet to be mined hold an estimated worth of approximately $74 billion, according to a recent research report from JPMorgan Chase & Co. released on Friday. This analysis comes amidst adjustments in the price targets for various cryptocurrency mining companies in response to second-quarter earnings, fluctuations in Bitcoin prices, and changes in the network’s hashrate.
The hashrate represents the total computational power dedicated to mining and processing transactions within a proof-of-work blockchain. In light of these factors, JPMorgan has revised its price targets for several miners:
- CleanSpark (CLSK): Price target reduced from $12.50 to $10.50, maintaining a neutral rating.
- Iren (IREN): Price target lowered from $11 to $9.50, with an overweight rating retained.
- Marathon Digital (MARA): Underweight rating, with the price objective decreased from $14 to $12.
- Riot Platforms (RIOT): Overweight rating sustained, with the price objective trimmed from $12 to $9.50.
Over the next four years, the projected revenue opportunity from block rewards is estimated to be around $37 billion, reflecting a 19% decline since early June, but showing an impressive 85% increase year-on-year, as noted in the report.
JPMorgan has expressed a preference for Iren and Riot, indicating that the recent underperformance of these stocks could represent an attractive buying opportunity for investors. Although Riot has lagged behind the sector year-to-date due to various operational challenges, there is optimism surrounding potential improvements in sentiment and share price in the upcoming months, driven by enhanced uptime and production metrics.
On the other hand, the report highlighted that Iren’s stock has seen a decline in recent weeks following a significant surge in power costs reported in July, linked to hedging losses. However, JPMorgan believes these issues are manageable and can be rectified, reinforcing the notion that they present a compelling buying opportunity for savvy investors.