Cipher

Bitcoin

<div class="sg-post-des">
 Bitcoin mining analyst Jaran Mellerud said there are “better-priced opportunities” that could even out the valuation discrepancies between the mining stocks.
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<div class="cointelegraph">
 Bitcoin (BTC) <a rel="noopener noreferrer nofollow" title="mining" href="https://thebittimes.com/tag/mining.html">mining</a> heavyweights Marathon Digital and Riot Platforms are among the most <a rel="noopener noreferrer nofollow" title="overvalued" href="https://thebittimes.com/tag/overvalued.html">overvalued</a> crypto <a rel="noopener noreferrer nofollow" title="mining" href="https://thebittimes.com/tag/mining.html">mining</a> companies relative to their competitors, says MinerMetrics founder and analyst Jaran Mellerud.
 The key metric backing Mellerud's claim is enterprise value-to-sales ratio — measuring a company's value to its sales revenue. The higher the ratio, the more overvalued a company is.
 The miners with the highest EV/S ratios are Cipher at 7.8, Marathon and Iris Energy each at 5.6 and Riot at 5.5, according to a Nov. 3 report by Mellerud.
 <figure><img src="https://cdn.thebittimes.com/images/2023/11/08/155347c184f71910b80278bbf860effc.webp">
 <figcaption style="text-align: center;">Mining stocks valuation in terms of EV-to-Sales ratio. Source: MinerMetrics
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 Mellerud attributed the heavyweight’s high EV/S ratios to receiving more institutional attention from the likes of BlackRock.
 <blockquote>
 “These companies have historically been favored among institutional investors like Blackrock and Vanguard, giving them superior access to capital and higher valuations like the rest of the industry.”
 </blockquote>
 Mellerud told Cointelegraph in the coming months he expects investors to start allocating to other players "which could even out the valuation discrepancies between these <a rel="noopener noreferrer nofollow" title="stocks" href="https://thebittimes.com/tag/stocks.html">stocks</a>,” he said.
 He suggested there are better-priced opportunities with lower EV/S ratios that could be capitalized on.
 <blockquote>
 “There exist immense valuation discrepancies in the Bitcoin mining sector that value investors can take advantage of."
 </blockquote>
 Riot’s high EV-to-Hashrate ratio at 156 is another indicator pointing toward its overvaluation, says Mellerud.
 <figure><img src="https://cdn.thebittimes.com/images/2023/11/08/493602f0c2840570a5177bbb290dac1d.webp">
 <figcaption style="text-align: center;">Mining stocks valuation in terms of EV-to-Hashrate ratio. Source: MinerMetrics
 </figcaption>
 </figure>
 Mellerud, previously an analyst at Bitcoin miner Luxor Technology, noted Riot has “massive growth” priced in as it’s constructing its a gigawatt site and awaits the delivery of 33,000 MicroBT machines in early 2024.
 “In addition, Riot has several business lines that are not reflected in its self-<a rel="noopener noreferrer nofollow" title="mining" href="https://thebittimes.com/tag/mining.html">mining</a> hashrate, meaning we should be careful in drawing any valuation conclusions from its high EV-to-Hashrate ratio,” Mellerud added.
 The Bitcoin <a rel="noopener noreferrer nofollow" title="mining" href="https://thebittimes.com/tag/mining.html">mining</a> sector has rebounded strongly in 2023, led by Marathon (MARA) and Riot (RIOT), whose share prices have respectively increased 170% and 228%, according to Google Finance.
 The mining stocks have outperformed Bitcoin over the same time, which has gained 113% year-to-date according to Cointelegraph Markets Pro data.
 Related: Bitcoin mining can help reduce up to 8% of global emissions: Report 
 Not every mining analyst believes Bitcoin mining stocks will continue to rise.
 Cubic Analytics founder Caleb Franzen noted Bitcoin already reached its year-to-date peak price, while the top mining stocks are still over 75% off year-to-date price highs.
 Franzen considered whether Bitcoin mining firms will soon need to become twice as productive in light of the upcoming Bitcoin halving event.
 <blockquote>
 “If block rewards are cut in half, the price of BTC would need to double post-halving in order for their business to be just as sustainable as it was pre-halving.”
 </blockquote>
 Marathon has the largest Bitcoin holdings among mining companies with 13,726 BTC, worth $486.1 million. Hut 8, Riot and CleanSpark follow with respective holdings of 9,366 BTC, 7,309 BTC and 2,240 BTC.
 Magazine: How to protect your crypto in a volatile market: Bitcoin OGs and experts weigh 
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Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/marathon-riot-among-most-overvalued-bitcoin-mining-stocks-report-tbt69435.html">https://thebittimes.com/marathon-riot-among-most-overvalued-bitcoin-mining-stocks-report-tbt69435.html</a>

Marathon, Riot among most overvalued Bitcoin mining stocks: Report

TheBitTimes

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