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The introduction of a spot BTC exchange-traded fund (ETF) might have significant effects on the Bitcoin (BTC) mining business, according to JPMorgan. This decision may act as a trigger for a BTC rally, especially in light of the industry’s revenue and profitability problems posed by record hashrates and the upcoming block reward halving.
In a recent research paper, JPMorgan examined the Bitcoin mining market. The mining operations that provide the best relative value are identified by experts Reginald Smith and Charles Pearce in this research. They take into account things like the current hashrate, efficiency of operations, power contracts, financed expansion plans, and liquidity.
The article states that JPMorgan has begun to cover a number of mining firms with various ratings and price objectives. CleanSpark (CLSK) gets an overweight rating and a $5.50 price objective from the bank. Riot Blockchain (RIOT) and Marathon Digital (MARA) both earned underweight ratings with $5 target prices and $6.50 target prices, respectively. The rating for Cipher Mining (CIFR) was neutral. In addition, the bank upgraded Iris Energy (IREN) from neutral to overweight.
The U.S. Securities and Exchange Commission’s (SEC) forthcoming decision on whether to approve a spot Bitcoin ETF is one of the most important variables currently impacting the Bitcoin mining sector. The SEC postponed making its choice until this month. The adoption of such an ETF, in the opinion of many in the cryptocurrency market, would encourage a wave of mainstream investment in the space.
JPMorgan’s top selection among the examined mining businesses is CleanSpark, which stands out. CleanSpark, in the bank’s opinion, has the finest combination of size, future development possibilities, power costs, and relative value. Despite being the biggest mining company, Marathon Digital has the greatest energy expenses and the lowest profit margins. On the other hand, Riot Blockchain is thought to be the most expensive stock among those reviewed in the research despite having relatively low power expenses and liquidity.
According to the research, Cipher Mining, which has the lowest electricity costs, has expansion restrictions.