Crypto Stocks Poised For More Gains? Here’s 2

Following a turbulent 2022 marked by a series of bad occurrences culminating in the FTX disaster, which drove crypto stocks into deeper catastrophe, 2023 has begun with a bang for the industry.

As is customary, bitcoin has led the charge, up 38% since the beginning of the year. As a result, other tokens have followed BTC’s lead and raced ahead as well.

The rise has spilled over into the stock market, with crypto-focused stocks profiting from the shift in attitude.

Indeed, Cantor’s crypto specialist Josh Siegler predicts that the shares of a couple of BTC miners will rise by 60% or more in the next months.

We ran these tickers through the TipRanks database to see what the rest of Wall Street thinks of Siegler’s decisions.

As it turns out, Siegler is not the only one who believes in this stock; both have Strong Buy consensus ratings from the rest of the Street. Let us investigate more.

The Riot Platforms, Inc. (RIOT)

Riot Platforms, one of North America’s top bitcoin mining firms, is Cantor’s first crypto choice.

The company plans to expand its operations by boosting its bitcoin mining hash rate and infrastructural capacity.

Riot had only 3.1 EH/s self-mining capacity at the end of 2021, but that has significantly increased in recent months, and the firm ended 2022 with 9.7 EH/s, helped by the deployment of recent miner purchases, bringing its total deployed fleet to 88,556 miners.

With the future expansion plans, the business expects to reach a hash rate of 12.5 EH/s by the end of Q1 as the Rockdale, Texas, operation adds a new building and more miners are installed. Riot is also putting together 200 MW of immersion-cooling infrastructure.

Furthermore, the company hosts around 200 MW of institutional Bitcoin mining clients. Riot has undergone a rebranding, switching from Riot Blockchain to Riot Platforms.

Mining Data and Stock Recovery

Aside from quarterly results, the corporation gives monthly operational updates.

The most recent for December, saw Riot mining 659 BTC, a 55% increase over December 2021.

The corporation made a profit of approximately $10.2 million by selling 600 BTC.

Riot shares were annihilated last year, but have recovered 88% since the December lows.

However, Cantor’s Josh Siegler believes they have more room to grow.

Siegler makes RIOT his “Crypto Top Pick” laying out the bull argument. “With scale being key in this business, we are optimistic about RIOT’s potential to mine more Bitcoin than competitors and reinvest the proceeds to further build scale,” he adds.

Gross margin remained best-in-class at 65%, owing partly to the company’s unique energy agreements… Unlike other miners, RIOT does not require more debt or equity to meet its targets.

Siegler’s bullish outlook is backed up with an Overweight rating on RIOT shares, and a $12 price target, implying a 61% one-year upside potential from present levels.

CleanSpark Inc. (CLSK)

CleanSpark, another bitcoin miner, is the next Cantor-endorsed crypto stock.

However, this was not always the case with this company. CleanSpark began as a provider of microgrid solutions and will begin mining operations by the end of 2020.

However, mining has become the company’s primary focus since then, with the company now a full-fledged bitcoin miner.

The company owns bitcoin mining facilities in Atlanta, Georgia, and co-locates miners in Massena, New York. Although bitcoin mining is notoriously energy-intensive, CleanSpark bills itself as a sustainable mining company that mines primarily with renewable or low-carbon energy sources.

The company’s capital management philosophy entails selling a large portion of the BTC mined, with the earnings used to fund future expansion.

Despite the industry’s limitations, CleanSpark was able to increase its hash rate from 2.1 EH/s in January 2022 to 6.2 EH/s in December.

Mining Figures for CLSK

According to the company’s most recent report, its fleet of 63,700 latest-generation bitcoin miners mined 464 bitcoin in December, culminating in annual production of 4,621 – a more than 200% increase.

The corporation sold 517 bitcoins in December at an average price of $17,000 per bitcoin, producing $8.7 million in revenue.

At the same time, the business said that its CY23E hash rate forecast has been reduced from 22.4 EH/s to 16.0 EH/s due to delays in infrastructure expansion at Lancium, where CleanSpark has inked an agreement to deploy some of its mining equipment.

While the hash rate will be lower by the end of the year, Siegler sees the change as a “clearing event” for this crypto stock.

A 16.0 EH/s target would still cement CLSK as one of the industry’s largest vertically-integrated self-miners,” the analyst noted. “However, we feel the corporation has greater foresight and control over the development of its self-mining locations than the co-location infrastructure. Furthermore, the business revealed that its new hash rate projection required only 95,000 rigs and $70MM in CapEx. Assuming rigs can be purchased for $15/TH, the revised cost for meeting its desired hash rate is $212.5MM. This compares favorably to our current conservative estimate of $350MM and will almost certainly result in reduced stock dilution.

CleanSpark shares have risen 48% from their low in December, but Siegler believes they still have plenty of room to grow.

The analyst assigns the company an Overweight rating, and a $5 price target. The amount allows for 89% one-year returns.

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