With the upcoming Bitcoin halving event fast approaching, JP Morgan is betting on vertically integrated Bitcoin mining company Riot Blockchain Inc. (NASDAQ: RIOT). This is good news for the Bitcoin infrastructure innovator as the platform and other companies in the segment such as Marathon Digital Holdings have trended downward for the past month.
JPMorgan’s highly bullish sentiment on Riot Platforms’ stocks is a good sign of its growth prospects.
Bitcoin halving is an event where the cryptocurrency’s mining reward is cut in half. As per Bitcoin’s creators’ wishes, it takes the blockchain network around four years to open 210,000 additional blocks to consistently reduce the rate at which Blockchain is introduced.
The first Bitcoin mining reward was 50 Bitcoins, but after three halving events in November 2012, July 2016 and May 2020, the current reward is 6.25 Bitcoins. Once the upcoming halving event arrives, the block reward for mining bitcoin will fall by half to 3.125 Bitcoin.
As there were around 19.65 million Bitcoins in circulation as of March 2024, around 1.35 million BTC is set to be released as mining rewards.
JPMorgan is just one of several Wall Street institutions maintaining a bullish sentiment toward Riot Platform’s stock as the April 2024 halving event approaches. The financial institution issued a $15 price target for RIOT stock, pointing to a potential upside of nearly 30%, and causing Riot shares to surge by 7%.
JPMorgan analyst Reginald Smith also upgraded the Bitcoin infrastructure innovator’s rating from neutral to overweight and praised the company’s scale, liquidity and robust power contracts. These factors position Riot favorably against other cryptocurrency miners listed in the United States
According to Investing.com, the rating upgrade is due to expectations of Riot Platforms increasing its hash rate significantly. Riot is expected to increase its hash rate by 9 EH/s over the next few months and another 10 EH/s in the second half of the year, Investing.com reports, raising its total hash rate to 31.5 EH/s by the end of 2024.
InvestorPlace contributor Stavros Tousios says that Riot is also attracting optimistic investors because it has the segment’s lowest production costs, a metric that could potentially set it up for further growth in the future as the cryptocurrency market matures.
Riot Platform’s average one-year price target is projected to range between $11.11 to $27.30 and its annual revenue is projected to increase by 77.77% to $461.4 million.
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