Ethereum Could Overtake Bitcoin, Messari Analyst Says

Ethereum Could Overtake Bitcoin, Messari Analyst Says

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Crypto mining stocks have become fashionable lately, especially since they are generally seen as a substitute for owning cryptocurrency. So, instead of buying Bitcoin (CCC:BTC-USD) or Ethereum (CCC-ETH-USD), you can buy a crypto mining stock in the same way people buy gold mining stocks. They see those as an alternative to owning gold. One reason for this is the companies make revenue and have the ability to generate profits. Owning a cryptocurrency does not guarantee you any kind of revenue. Another reason is that a number of these crypto mining stocks have begun holding as well as buying their underlying cryptos. In the case of Marathon Digital Holdings (NASDAQ:MARA), the company does not convert its mined cryptos into dollars. It simply holds them on their balance sheet. A third reason is that a number of these companies now have very high gross margins. These windfall profits are due to a wide gulf between the costs of mining, even with heavy electricity costs and high hash rates, and the much higher price of Bitcoin and other cryptos. For example, some of these crypto miners have secured very favorable long-term electricity contracts with their local energy providers.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 7 Retail Stocks That Are Far Too Close to Failing Therefore, the following four crypto mining stocks are worth considering. Here is the list: Riot Blockchain (NASDAQ:RIOT) Hive Blockchain Technologies (OTCMTKS:HVBTF) Hut 8 Mining Corp (OTCMKTS:HUTMF) Bit Digital (NASDAQ:BTBT) Let’s dive into these stocks. Crypto Mining Stocks To Buy Now: Riot Blockchain (RIOT) Source: Shutterstock Market Capitalization: $4.25 billion Riot Blockchain is a digital currency mining company based in Castle Rock, CO, but its mining operations are in upstate New York. It also buys and sells digital currencies, and provides accounting, audit, and verification services for blockchain-based assets. Riot recently jacked up its mining capacity so that it can achieve an estimated hash rate capacity of 1.06 Exahash per second (EH/s). That is equal to one quintillion hashes per second, a number with 18 zeros behind the 1, or 1 billion billion hashes per second. In addition, with additional application-specific (ASIC) mining rigs, made specifically for Bitcoin mining, the company expects to reach 3.8 EH/s by October 2021. This should make it the largest or close to the largest Bitcoin miners in the world. Riot Blockchain just released its earnings update for 2020 on March 15. It produced 1,005 Bitcoin in 2020, and by February had produced 179 Bitcoins, 43% higher than Jan. 2021. This puts it on a run-rate, which is likely higher now, of 2,148 Bitcoins, or 113.7% higher than 2020. Let’s assume a price of $58,000 per Bitcoin. That equates to a run-rate revenue of $124.58 million. Therefore, assuming it reaches a run rate of 250 BTC per month by October 2021, its revenue rate will be $14.50 million per month, or $174 million annually. As the company claims it will reach 4 EH/s by the end of the year, this could mean a substantially higher level. The earnings update did not release profit numbers, but we can assume that by the end of the first quarter of 2021, the company will be making significant profits. My estimate is that that it will make 90% gross margins. I suspect that the stock has the ability to at least double from here, as long as Bitcoin continues to provide huge windfall profits to Riot. HIVE Blockchain Technologies (HVBTF) Source: Shutterstock Market Cap: $1.3 billion Hive Blockchain is a Vancouver-based crypto mining company with operations in Canada, Sweden, and Iceland. The company produced earnings for its latest quarter ending Dec. 31 on March 2, showing that it generated $13.7 million. It mines both Ethereum (in Sweden and Iceland) and Bitcoin and has gross margins of 77%. Hive Blockchain makes about 20,000 Ether coins per quarter, which at today’s rate of about $1,800 per Ether, equals $36 million. That puts it on an annualized run rate of $144 million in revenue. At its $1.3 billion market cap, that puts Hive stock at about 9 times revenue. 7 Stocks to Buy No Matter What the Treasury Yield Does Hive also announced a $100 million At-the-Market (ATM) equity capital raise, which it will use to repay debt and for corporate purposes. Look for the stock, which is also listed in Canada, to continue to move higher, as it is up about 100% year-to-date, especially as Ethereum rises. Hut 8 Mining Corp (HUTMF) Source: Shutterstock Market Cap: $962 million Hut 8 Mining stock is up about 173% year-to-date, not only because it is a profitable Bitcoin miner but also because it has a big Bitcoin portfolio. The company will announce its earnings results on Mar. 25 for the year ending Dec. 31. Hut 8 says it has one of the highest installed mining capacities in its class. It also says on its website that it has one of the highest installed capacity rates in the industry. It claims to be among the “top 5 largest holders of self-mined Bitcoin of publicly-traded companies in the world.” A recent research report in Seeking Alpha on Hut 8 says it had, as of January 2021, 3,000 Bitcoins in its treasury. At $58,000 per BTC that equals $174 million. The company also says that it has raised $100 million in equity capital. The report in January said that Hut 8 stock was undervalued at the time. A new CEO and two new directors joined the company in November. The report said that the company had operations capable of producing 3.73 Bitcoin per day or 1,358 per year. At $58,000 per Bitcoin, that works out to revenue of about $78 million annually. It’s too early to determine what the company’s profitability really is, on an ongoing basis, without further information. Investors should read its March 25 earnings release carefully to see what its future value could become. However, I expect this to be an extremely positive report, so be prepared to see the stock move higher. Bit Digital (BTBT) Source: biggunsband / Shutterstock.com Market Cap: $822.6 million This is a relatively unknown U.S. and Chinese digital currency miner, but some analysts like this Bitcoin miner the most. For example, a recent Seeking Alpha report on March 10, indicates that it trades at a huge discount on a price-to-sales ratio compared to other miners. In addition, the company was producing 424.7 Bitcoins per month as of January. At $58,000 per BTC, that works out to $24.59 million, or $295.1 million annually. Given its $822.6 million market cap, this puts it roughly at a 3 times run-rate sales. The company has not yet produced its earnings for 2020, so look for more information from the company in order to determine its long-term value. But right now, with this information about its January operations, look for the stock to at least double, if not triple once the market realizes what its comp value is worth. But do be aware that the company recently released a press statement which it said it was providing in response to false allegations about the company’s operations. This may be referring to a Seeking Alpha report in April 2020 (back when the company was known as Golden Bull Limited) citing questionable practices at the company. As always, buyer beware. These crypto mining stocks provide good exposure to digital currencies without having to buy the cryptos themselves. As Bitcoin and Ethereum hit peak prices, these companies are now making superior windfall gross margins, especially compared to their history. 7 Cheap Stocks Under $10 Several of them have raised enough cash to be able to fund their operations with their cash assets, which allows them to keep the Bitcoin they have mined as long-term marketable securities on their balance sheet. This provides an additional upside leveraged exposure into digital currencies for investors. On the date of publication, Mark R. Hake held a long position in Marathon Digital Holdings (MARA). Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post 4 Crypto Mining Stocks To Buy Now To Gain Exposure to Cryptocurrencies appeared first on InvestorPlace.

Ethereum Mining Difficulty Registers a New As ETH Price Targets New ATH of $2500

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Ethereum network’s mining difficulty peaked to a new all-time-high 5,950,622,727,915,080, breaking the previous ATH of 5,946,888,973,277,870. The rising mining difficulty comes at a time when there is a lot of discussion around Ethereum’s rising gas fee and traders shifting to other platforms.

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📈 #Ethereum $ETH Mining Difficulty just reached an ATH of 5,950,622,727,915,080 Previous ATH of 5,946,888,973,277,870 was observed on 16 March 2021 View metric:https://t.co/s9t4z9o8ba pic.twitter.com/WmUnPbib7y — glassnode alerts (@glassnodealerts) March 20, 2021

The on-chain metrics for Ethereum look quite strong as the demand for ETH around $1,800 price has been quite significant. ETH price has also seen a trend reversal with price narrowly missing the head and shoulder pattern formation followed by a bullish breakout which might help the second-largest cryptocurrency retest its previous ATH of $2,036. One analyst predicted that ETH could be well on its way towards $2,500.

Apart from growing demand, the increasing volume of ETH locked in ETH 2.0 mainnet could also lead to a supply crisis, and at a time when its institutional offering has just begun, the supply crunch could help its price further.

Altcoin Market Cap Nears ATH

Bitcoin’s massive growth this bull season has overshadowed most of the other developments as the top cryptocurrency more than tripled its 2017 high and its market cap reached the $1 trillion mark for the first time. Along with Bitcoin, the altcoin market has also grown to new highs and registered a new ATH of $684 billion.

The Altcoin market’s new ATH has propelled it to the same levels as 2017 and if it mimics the previous market movements, the market cap could grow exponentially. The fact that Ethereum and many other altcoins have already registered new ATHs, the next bull cycle could see these altcoins rise further as talks of Bitcoin being in a supercycle grow stronger.

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Rekt Capital, a crypto analyst pointed out the recent altcoin market cap ATH and how it is at the same level as the 2016 post which the altcoin market cap registered a new ATH of $473 Billion. The 2017 high was first breached in early February and retested towards the end of the month. The month of March saw the altcoin market cap add another $200 billion to its 2017 high.

Altcoin Market Cap launched into new All Time Highs from the very same level that launched Altcoin Market Cap into new December 2017 All Time Highs A perfect example of market cyclicality if there ever was one#BTC $ETH #Bitcoin https://t.co/h1kkiZ4SLj pic.twitter.com/5sMEbkS4BD — Rekt Capital (@rektcapital) March 20, 2021

To keep track of DeFi updates in real time, check out our DeFi news feed Here.

Crypto Analyst Explains Why He Expects Ethereum ($ETH) to go to $10,000

On Thursday (March 18), popular New Zealand-based crypto analyst and influencer Lark Davis (@TheCryptoLark on Twitter) talked about the reasons for his bullishness on Ethereum (ETH).

Davis started by talking about the supply of Ethereum:

“First, let’s start off by talking about the supply of Ethereum right now. This week, we had the second biggest Ethereum outflow from centralized exchanges with 235,000 Ethereum withdrawn in a single hour. When the price went down, buyers stepped up big time. That’s just the second biggest of this year, of course, but still it shows that right now interest is very high in Ethereum… This is bullish as it shows that the demand still red-hot for Ethereum. In fact, on-exchange balances for Ethereum just reached a new low. Ethereum is in accumulation mode; whales are still buying heavily.“

He then went on to explain that the reason for so much demand for Ethereum for investors is that a lot of them expect the Ethereum price to go to $10,000 and possibly “much higher than that.”

Here are the main reasons for Davis’ bullishness on Ethereum:

NFT Mania

“Seems everyone, of course, is talking about NFTs these days, and this is really important because an entire new audience of people are being exposed to an exciting use case for cryptocurrency and, of course, to Ethereum…

“Every major NFT market is an Ethereum market… other chains are going to do NFTs… but as so often happens, all the liquidity and all the most valuable stuff is on Ethereum.“

Huge Potential of DeFi

“We still only have 1.6 million unique addresses which have used DeFi protocols. That means that only around 3.5% of all active Ethereum wallets have used DeFi. The biggest thing happening in cryptocurrencies is still only a tiny fraction of users have actually used it. That’s insane. This says one thing to me: we’re so early for DeFi and there’s still so much room to grow… other chains are doing DeFi… but again the biggest and the best protocols with the deepest liquidity are building on Ethereum.“

100X Scaling Coming Soon

“Ethereum is working very hard on scaling right now. In fact, a major upgrade is underway that will likely be shipped to the Ethereum mainnet within the next few weeks, a couple of months at the latest that’s going to totally change the way we do fees Etheruem to bring fees down massively. It is called Optimism, a layer 2 scaling solution that will essentially allow for 100X scalability for Ethereum. This is going to scale both simple transactions and most importantly smart contracts.“

Featured Image by “elifxlite” via Pixabay.com

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.