Throughout 2023, Bitcoin has seen a significant increase in value, attracting investors who see the cryptocurrency as a haven against a backdrop of banking collapses, macroeconomic instability, and geopolitical problems. This growing acceptance marks a change in attitude towards Bitcoin, which was previously seen as an extremely volatile and risky asset.
Analyst Gautam Chhugani notes that factors such as the possible approval of Bitcoin ETFs by large asset managers and the upcoming Bitcoin “halving” scheduled for April 24 could be catalysts for a new bull cycle. According to their projections, by mid-2025, Bitcoin could reach $150,000, which is a significant increase from current levels.
In addition to buying Bitcoin directly, Chhugani suggests that investors consider investing in Bitcoin mining companies, which have the infrastructure to validate transactions and earn Bitcoin rewards for doing so. The analyst sees opportunities in some of these mining companies. It also highlights that the analyst consensus views these companies as “Strong Buys,” indicating a positive outlook for their performance going forward.
CleanSpark Inc
CleanSpark, a company previously specialized in microgrid solutions, has redirected its focus to Bitcoin mining in recent years. Since the end of 2020, the company has focused its strategy on cryptocurrency mining.
Unlike its previous approach of selling most of the Bitcoins it mined to fund its expansion, the company now prefers to hold its digital assets for the long term, especially in anticipation of the upcoming halving event, which has historically driven the Bitcoin market higher.
The company has faced particular challenges recently, such as falling cryptocurrency prices due to tension in the Israel-Hamas conflict. Although previously, in March 2022, it saw a 16% increase in cryptocurrency prices during the Ukraine-Russia conflict.
In addition, the potential approval of the spot Bitcoin ETF, iShares Bitcoin Trust, by BlackRock has generated investor interest. The listing of this ETF by the Depository Trust & Clearing Corporation (DTCC) after a brief withdrawal may suggest an imminent launch, weighing on market volatility.
As for CleanSpark’s current situation, the RSI indicates slightly overbought, and the stock price is above its 10-day and 50-day moving averages, albeit below the 50-day, which could result in price fluctuations. However, for those with a long-term perspective, CleanSpark stands out due to its track record of sound decision-making and its ability to adapt.
The company has been increasing its mining capacity rapidly and has recently surpassed a total hash rate of 10 EH/s, with plans to reach over 20 EH/s with the addition of new miners. CleanSpark stands out for its focus on self-mining Bitcoin, and its strategy is centered in Georgia, where it has extremely low energy costs compared to its competitors.
According to Chhugani, CleanSpark is an attractive option for investors and deserves a “Buy” rating with a target price of $5.3 per share, which would represent a 14% upside in one year. However, this assessment is considered conservative compared to the average target price estimate of $9.16, which could generate a 97% gain over the same period. All analysts agree that CleanSpark stock is a strong buy, backed by 5 unanimous buy recommendations.
Riot Platforms Inc
Riot Platforms is a Bitcoin mining and digital infrastructure company focused on a vertically integrated strategy. The company has experienced an impressive 238% increase in value this year, far outperforming bitcoin. Investors are attracted to this well-capitalized miner, which boasts a strong cash balance of $289 million, minimal debt, and a comparatively healthy balance sheet compared to its competitors.
Riot operates two Bitcoin mining facilities in Texas and engages in electrical switchgear engineering and manufacturing in Denver, Colorado. The company has remained focused on growth and plans to increase its mining capacity with the acquisition of 33,280 MicroBT miners, which will make it one of the top miners in the industry in terms of hash power.
In addition, Riot sells electricity to the grid, generating additional revenue through energy credits.
Analysts see Riot as one of the best options in the Bitcoin mining market because of its focus on planned growth and its resistance to following fashionable trends, such as AI computing or performance. Instead, Riot invests in expanding its mining capacity, locking in advantageous contracts with mining equipment manufacturers and increasing its projected capacity from 10.7 EH/s to 35 EH/s by 2025.
The company has maintained a countercyclical strategy, taking advantage of low market prices to strengthen its position. It posted 0% earnings growth in the latest quarterly report, while sales growth was 5%. The company is expected to report its latest results around November 13.
Analysts support this outlook, with a Buy rating and a $15.60 price target, suggesting a 33% upside in the stock over the next year and a strong buy consensus in the market, with a median target of $16.40 and estimated growth of 40%.
In conclusion
Both CleaSpark and Riot Platforms represent solid opportunities in the world of Bitcoin mining and cryptocurrencies. Both companies have demonstrated their ability to adapt to changing market dynamics and take advantage of emerging opportunities.
CleanSpark has demonstrated a strategy of sound decision-making and has rapidly grown its mining capacity, while Riot Platforms stands out for its focus on planned growth and resilience to fad trends.
Both companies have analyst approval and present promising prospects, backed by share price growth projections. With Bitcoin’s potential steady growth, do you look favorably on investing in these companies?
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(Information in this post is for general informational purposes only. It cannot and should not be considered as suggestions or recommendations regarding investing or financial decisions.)
