Connect with us

Bitcoin

Market Rout Prompts Analyst to Slash Bitcoin Miners’ Price Targets by Average of 65%

Published

on

Market Rout Prompts Analyst to Slash Bitcoin Miners’ Price Targets by Average of 65%

Market BTIG’s analyst remains positive on the longer-term outlook for the miners and is sticking with his buy ratings for the stocks.

By Aoyon Ashraf

Jun 3, 2022, at 11:29 p.m.

Updated Jun 3, 2022, at 11:56 p.m.

CoinDesk - Unknown
BTIG has significantly reduced the price targets on the bitcoin mining stocks it covers. (Eugene Mymrin/Getty Images)

Market Wall Street investment bank BTIG lowered its average 12-month price targets for bitcoin (BTC) miners by 65%, citing the decline in bitcoin prices and concerns about funding.

“While we expect BTC mining stocks to trade with the BTC price (just like most commodity stocks with the commodity), we believe the other driver of the miner’s underperformance to BTC are concerns around funding growth (think a lower BTC price means less capital for growth),” BTIG analyst Greg Lewis wrote in a research report on Friday.

CoinDesk - Unknown
BTIG’s Greg Lewis slashed his 12-month price target for mining stocks under coverage. (BTIG, CoinDesk)

Bitcoin miners have gotten battered this year, their stocks declining by more than 50% on average as bitcoin price slumped following last year’s bull run. The pain has been amplified for the miners as the Bitcoin network hash rate and mining difficulty have risen near all-time highs this year, squeezing miner margins.

Read more: Bear Market Could See Some Crypto Miners Turning to M&A for Survival.

Such market conditions have led to investor concerns that miners won’t be able to raise the funds they need for growth because building a large-scale mining operation is very capital intensive. However, BTIG’s Lewis sees larger miners as better at raising funds even in a bear market.

“In a flattish BTC price market, the ability to access capital has become that much more important (think to finance for rigs, infrastructure, and BTC), and we expect large established miners to continue to have access to capital at the expense of smaller newer miners,” he wrote.

Lewis kept his buy rating on all four mining stocks he covers—Riot Blockchain (RIOT), CleanSpark (CLSK), Core Scientific (CORZ), and Marathon Digital (MARA)—and remains optimistic about the longer-term outlook for the industry. “Not surprisingly, our BTC mining price targets are susceptible to our BTC price estimate; hence, a near-term BTC price of ~$40K points to 30%–40% upside to our price targets, while a BTC price of $50K points to 90%-100% upside to our price targets,” he wrote.

For more news, visit https://cryptomartian.com/.

[ source link ]

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Latest Market Prices

Bitcoin

Bitcoin

$19,267.70

BTC -0.31%

Ethereum

Ethereum

$1,074.94

ETH 0.30%

Tether

Tether

$1.00

USDT 0.01%

Solana

Solana

$33.22

SOL -2.03%

XRP

XRP

$0.32

XRP 1.14%

Polkadot

Polkadot

$6.86

DOT -0.36%

Dogecoin

Dogecoin

$0.07

DOGE -0.03%

USD Coin

USD Coin

$1.00

USDC -0.01%

Binance Coin

Binance Coin

$219.07

BNB 0.03%

Cardano

Cardano

$0.46

ADA -0.70%

Facebook