While most public crypto miners are poised to weather the supply shock of the Bitcoin halving, JPMorgan has named its top picks. “With Bitcoin's halving looming, expect increased volatility and trading volume for both Bitcoin and mining stocks,” JPMorgan analyst Reginald Smith said in a note this week. Stated. “That said, we believe recent weakness provides an attractive entry point and are particularly bullish on RIOT and IREN, which we believe offer attractive relative valuations.”Bit The coin halving is estimated to occur within a few days, and mining companies are bracing for a reduction in reward income after the event. Many listed miners are preparing for this by placing bulk purchase orders for new mining equipment and increasing their hashrate by increasing their power capacity. Nevertheless, uncertainty ahead of the halving has weighed on mining stocks, most of which are down double digits since the start of the year. Smith noted that Riot Platforms was the worst-performing stock in JPMorgan's mining coverage space, but the company, along with CleanSpark, has seen a significant increase in hashrate thanks to newly built and acquired facilities. He pointed out that it is ready to show maximum growth. JPMorgan rates Riot and Iris Energy as Overweight. CleanSpark has a neutral rating. Hash rate is a measure of the computational power used to process transactions on the Bitcoin network. The higher the miner's hashrate, the greater the earning opportunity. JPMorgan estimates Riot's hash rate in the fourth quarter was 12.2 EH/s (or exahashes per second) and could end the year at 28.4 EH/s. Iris Energy started with 5.6 EH/s in the fourth quarter, and by the end of this year he is aiming for 16.4 EH/s. Smith also highlighted Riot's low power costs, noting that electricity is the mining company's largest operating expense. “RIOT had the lowest power cost per coin mined in 2023 (about $7,500) due to its attractive power purchase agreement, while MARA had the lowest power cost per coin mined due to third-party hosting fees. was the most expensive (approximately $17,400),” he said. He said. “After the halving, we expect CLSK and RIOT to be the two lowest-cost companies given their size and attractive power contracts.” Smith, who received a neutral rating from JPMorgan, said: He gave CleanSpark an honorable mention, calling it an “excellent halving” based on “a relatively efficient fleet, low all-in mining costs, and favorable hashrate comparisons that should deliver record returns.” And the profit after the halving. ” Unlike other mining stocks, CleanSpark stock has risen more than 50%. Shares were up about 13% in Thursday trading. The halving, as mandated by the Bitcoin blockchain code, will incentivize Bitcoin miners to reduce the amount of newly created Bitcoin from 6.25 Bitcoin to 3.125 Bitcoin (approximately $20,000 at Thursday morning prices). ) occurs when shrinking to. It is scheduled to run every 210,000 blocks, or approximately every four years. —CNBC's Michael Bloom contributed reporting.
