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3 Blockchain Stocks to Bet on New Highs for Bitcoin
While stocks are off to a mixed start this week, Bitcoin (BTCUSD) is pushing higher once again, bolstered by expectations for the imminent approval of spot Bitcoin exchange-traded funds (ETF) as soon as Wednesday. The widely anticipated move is expected to make the cryptocurrency more appealing to institutional and retail investors alike, potentially bringing waves of fresh capital into Bitcoin.
And that's not the only positive catalyst for the cryptocurrency. Every four years, the amount of BTC in supply is cut by 50%, which increases demand for the largest cryptocurrency. The next “halving” event is scheduled in April 2024, and BTC has already surged around 70% since the end of April 2023.
Historically, Bitcoin has experienced four-year bull-bear cycles. It typically gains momentum six months prior to the halving event, which occurs every four years, and the bull run ends roughly 18 months after the halving event.
As prices of BTC mining companies are tied to Bitcoin, here are three blockchain stocks you can consider buying today.
TeraWulf Stock
Valued at $464.9 million by market cap, TeraWulf (WULF)owns and operates vertically integrated Bitcoin mining facilities in the U.S. It has two BTC mining facilities located in New York and Pennsylvania, generating domestically produced Bitcoin powered by 91% zero-carbon energy resources such as nuclear, hydro and solar.
In December 2023, TeraWulf mined 334 Bitcoin worth $14.17 million. Comparatively, mining costs were much lower at $3.74 million. Due to rising BTC prices, TeraWulf is forecast to increase sales from $15 million in 2022 to $133 million in 2024.
TeraWulf stated it will repay $14 million in debt with the cash generated in Q4, resulting in lower interest payments.
Out of the five analysts covering WULF, four recommend “strong buy,” and one recommends “moderate buy.” The average target price for WULF is $3.40, indicating an upside potential of 70.8%.
Riot Platforms Stock
Valued at $3.06 billion by market cap, Riot Platforms (RIOT) is among the largest Bitcoin mining companies globally. In 2023, Riot Platforms mined 6,626 BTC at an average price of $28,491. It ended the year with 7,362 BTC worth roughly $324 million.
Due to the company’s unique power strategy, it generated $71.6 million in power credits, equivalent to 2,480 Bitcoin, based on its average price during 2023. Moreover, Riot emphasized it will increase its self-mining hash rate to 28 EH/s by the end of 2024.
Out of the 10 analysts covering RIOT, eight recommend “strong buy,” one recommends “moderate buy,” and one recommends “hold.” The average target price for RIOT is $17.91, indicating an upside potential of 20%.
Cipher Mining Stock
The final BTC mining stock on my list is Cipher Mining (CIFR), valued at nearly $1 billion by market cap. The company increased mining production in December, despite continued growth in network hash rate.
Cipher stated it entered into transactions to acquire new mining rigs, fueling its ambitious growth plans. It also ended 2023 with $120 million in liquidity and no debt.
Out of the seven analysts covering Cipher stock, five recommend “strong buy,” one recommends “moderate buy,” and one recommends “hold.” The average target price for CIFR is $5.17, indicating an upside potential of 37.9%.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
