Crypto Miners Literally Print Money, Says Wall Street Firm DA Davidson

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DA Davidson, the Wall Street investment bank and research firm, launched research coverage on bitcoin mining companies Core Scientific, Marathon Digital, Riot Blockchain and Hut 8 Mining with buy ratings for all actions.

DA Davidson analyst Christopher Brendler sees huge opportunity for domestic miners, following the sustained bitcoin rally and crypto bans in China. Brendler was previously at Seaport Global and Stifel Nicolaus.

Combined with better access to capital that keeps their lead (and HODL), we expected these stocks to revalue much higher as earnings estimates crush short-term estimates, even as bitcoin consolidates, has writes Brendler.

With US miners gaining market share after China’s bans and with bitcoin over $ 55,000, companies are literally printing money.

Miners’ actions, which are strongly correlated with the price of bitcoin, have seen a relentless rally this year as the price of the largest cryptocurrency more than doubled. Meanwhile, the Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF, or RIGZ, which has high exposure to miners and was launched in July, gained 47%.

Bitcoin mining stocks are highly (~ 70%) correlated with bitcoin prices with good reason since BTC not only directly generates reported income, but the four are also trying to hold as much newly created bitcoin as possible on their balance sheets, wrote the analyst.

Brendler’s top pick among miners is Hut 8, and he expects massive gains on the upside across the mining industry.

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