Bitcoin miners pivot to AI, but may be overvalued: JPMorgan
JPMorgan upgraded Cipher and CleanSpark, and cut targets for MARA, RIOT due to the increased risk of shareholder dilution.
- JPMorgan cut targets for MARA and RIOT due to dilution of shares.
- Mining firms have up to 33% more shares than accounted for.
- Cipher and CleanSpark are in a strong position on disciplined issuance.
Bitcoin miners are increasingly diversifying their operations from hashrate to high-performance computing. This targeting of AI compute demand did not go unnoticed on Wall Street. In a report published on Monday, November 24, JPMorgan noted this pivot to AI , but also highlighted risks for several firms in the industry.
The investment bank also announced that it was upgrading its ratings for Cipher Mining and CleanSpark from “Neutral” to “Overweight”. The investment giant also raised the price target for Cipher from $12 to $18, while maintaining CleanSpark at $14.
The change in outlook was mainly due to Bitcoin (BTC) miners pivoting to AI use cases. Notably, Cipher Mining plans to expand its infrastructure to 1.7 GW by 2026, largely to support high-performance computing for AI services. In addition, CleanSpark recently expanded its Texas datacenter with 200 MW, largely dedicated to AI.
Bitcoin miners face risks, despite AI demand
Still, JPMorgan highlighted risks faced by some miners, especially regarding shareholder dilution. Notably, increased capital needs push these firms to raise funds through at-the-market offerings, which dilutes investors.
The markets are also currently underreporting dilution, the report argues.
“On average, our diluted share count figures that underpin our price targets are 20%-33% higher than the share count reflected in Bloomberg,” the report wrote, adding that this could mean that these firms are overvalued.
Due to concerns over shareholder dilution, JPMorgan has cut its estimates for Marathon Digital (MARA) from $20 to $13, and Riot Platforms, from $19 to $17.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
"Berachain's Unique Refund Conditions Raise MFN Issues in Cryptocurrency Agreement"
- Berachain co-founder Smokey dismissed a $25M refund clause for Nova Digital as "inaccurate," citing compliance needs for Brevan Howard's Abu Dhabi fund. - The clause allows Nova to reclaim its investment until Feb 2026 if $5M is deposited post-TGE, but activation remains unconfirmed. - Four crypto attorneys called the refund mechanism "highly unusual," raising concerns about potential violations of "Most Favored Nation" investor clauses. - Smokey denied MFN breaches, noting no other Series B investors re
Paxos Purchases Fordefi to Drive a New Era of Secure Institutional Crypto Custody
- Paxos acquires Fordefi for over $100 million to strengthen institutional crypto custody. - The deal integrates Fordefi's MPC wallet tech and DeFi tools into Paxos's regulated infrastructure. - This marks Paxos's second 2025 acquisition, reflecting growing demand for secure digital asset solutions. - Fordefi's $28M prior funding and institutional client base (300+) enhance Paxos's market position. - The move aligns with industry trends as firms prioritize secure, scalable crypto infrastructure amid regula
Across Connects 21 Blockchains: One-Click Bridging Integrates DeFi into a Unified Ecosystem
- Across Protocol introduces a single-click cross-chain swap feature, bridging 21+ blockchains in one seamless transaction. - The "intents architecture" automates routing and execution, reducing transaction failure rates to 2.3% and cutting transfer times to 8–15 seconds. - By unifying bridge and swap functions, it addresses DeFi inefficiencies, enabling users to access liquidity across chains without manual juggling. - Positioned among mid-tier cross-chain solutions, Across supports 28 chains, competing w
Security Assessments Propel Mutuum’s $18.9M Presale Surge
- Mutuum Finance (MUTM) raised $18.9M in Phase 6, with 90% of tokens sold ahead of a 20% price hike in Phase 7. - Token price surged 600% since Phase 1, driven by structured pricing, community rewards, and expanded payment options. - Halborn and CertiK audits validate smart contracts, a key step before Q4 2025 testnet launch supporting ETH/USDT. - The dual-model protocol combines pooled liquidity with P2P lending, using mtTokens for staking and liquidity management. - Analysts highlight security validation
Trending news
MoreCrypto prices
More
