JPMorgan updates Bitcoin miner models and price targets By — JPMorgan is updating its bitcoin miner models and price targets to reflect first-quarter 2024 results, increased 2024 hashrate targets, and modest changes in spot bitcoin prices. 

The bank is taking a less constructive view on a post-halving bitcoin rally, generally leading to lower December 2024 price targets and estimates. JPMorgan remains overweight on Iris Energy (NASDAQ:) and Riot Blockchain (NASDAQ:), underweight on Marathon Digital Holdings (NASDAQ:), and neutral on Cipher Mining (NASDAQ:) and CleanSpark (NASDAQ:).

“We previously modeled a 30% stair-step increase in bitcoin in the months following the halving. We now see a 15% stair-step increase in bitcoin price in the third quarter of 2024, as we believe a portion of the rally may have been pulled forward this cycle,” JPMorgan stated. The report highlighted that is already up 56% year-to-date.

At current prices, JPMorgan estimates the notional value of the remaining 1.3 million bitcoin is around $91 billion, down 4% from April 10 and up 109% year-over-year. The four-year block reward revenue opportunity is sized at $47 billion, down 4% from April 10 and up 108% year-over-year. The aggregate market cap of the 14 U.S.-listed miners closed on June 3 trading at 20% and 41% of the nominal value of the proved and four-year block reward opportunity, respectively, ahead of historical averages of 16% and 33%, respectively.

IREN announced plans to reach 30 EH/s by the end of 2024, considerably ahead of previous guidance of 20 EH/s. The company expects to have a blended fleet efficiency of 16 J/TH, down from 25 J/TH currently. 

As such, JPMorgan is increasing its December 2024 price target for IREN to $11 from $10, assuming the company funds 50% of its expansion via their ATM, which would increase the share count by approximately 25%. “IREN has a demonstrated track record of delivering infrastructure and hashrate on time, and operating at industry-leading uptime,” the report noted.

JPMorgan summarized its BTC and network hashrate assumptions that drive miner valuations. There have not been any dramatic changes in the price of bitcoin or the network hashrate since the last update on April 10, 2024. The spot BTC price assumption moves to $69,000 (from $68,000, a 1% increase) and the baseline network hashrate assumption remains at 600 EH/s.

Meanwhile, JPMorgan is decreasing target gross profit per EH/s estimates, primarily on less constructive near-term bitcoin price assumptions. IREN’s target gross profit per EH/s declined the least because of its improving fleet efficiency. The report sees 38% and 24% upside at IREN and RIOT, respectively.

The report also summarized each miner’s hashrate trajectory over the next 18 months. Growth beyond 2024 for most miners is contingent upon executing large purchase orders and/or acquisitions of existing or greenfield facilities.

IREN has outperformed peers (and Bitcoin) over the last three months, while RIOT shares have lagged over that time.

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