The executive chairman and co-founder of CleanSpark Inc (NASDAQ: CLSK) uncovered JPMorgan’s most recent research on Bitcoin (BTC) mining companies stocks, distributed on October 11. This report is called “Bitcoin Mining: Expanding Coverage”, and initiates an analysis of CLSK, CIFR, RIOT, and MARA fundamentals.
JPMorgan’s North America equity research team addresses the challenges being faced in the Bitcoin mining industry, related to the growing hashrate, and the risks imposed by the upcoming block subsidy halving to BTC:
“The bitcoin mining industry is at a crucible moment as management teams (and investors) weigh the prospects of a Bitcoin ETF, which may catalyze a rally, against record hashrate increases and the looming block reward halving that threaten industry revenues and profitability.”
— JPMorgan
In this context, the report explains that the market cap of the 14 largest U.S. listed Bitcoin mining companies is 36% larger than what JPMorgan’s research team expects the whole industry can generate in revenues for the next four four-year cycle, which is $20 billion.
Interestingly, the investment giant also signalizes for the hashrate centralization of these 14 largest Bitcoin mining companies, responsible for 25% of the global hashrate — according to the report. Finbold had already reported on the growing centralization observed within the Bitcoin network.
Moreover, JPMorgan also affirms that 20% of the current hashrate is at risk after 2024’s halving. This justifies the importance of picking the right companies to invest in.
JPMorgan top picks: ‘Not all miners created equal’
JP Morgan’s investment coverage on Bitcoin mining companies is, as follows:
- CleanSpark Inc (NASDAQ: CLSK)
- Riot Platforms Inc (NASDAQ: RIOT)
- Cipher Mining Inc (NASDAQ: CIFR)
- Marathon Digital Holdings Inc (NASDAQ: MARA)
“Not all miners are created equal. (…) We believe CLSK, our top pick, offers the best balance of scale, growth potential, power costs, and relative value. MARA is the largest operator but has the highest energy costs and lowest margins. RIOT has relatively low power costs and liquidity and is nearing completion of a large facility, but is by far the most expensive name in our coverage universe. CIFR has the lowest power costs but is growth constrained.”
— JP Morgan
Notably, this list is aligned with BlackRock’s acquisitions of Bitcoin mining companies’ shares. BlackRock also owns 5.89 million shares (3.8% out of the total) of CleanSpark, JPMorgan’s top pick.
